Order to transfer suit to undefended status overruled

Order to transfer suit to undefended status overruled

The Bombay High Court recently held that the order of its prothonotary and senior master for setting a timeline for the filing of written statement was without jurisdiction, as it was for a regular suit that was converted to a commercial suit.

In Remedial Resolutions Advisors Private Limited v One Square Investments Limited, a regular suit was filed by Remedial Resolutions Advisors (the plaintiffs) in 2012 against One Square Capital Investments (the defendants) on the original side of the Bombay High Court for enforcement of certain obligations under a commitment agreement.

The defendants were contesting the suit, but they had not filed a written statement. The suit was converted to a commercial suit pursuant to the order passed by the prothonotary (chief clerk) and senior master, Bombay High Court on 20 February 2017, and the defendants were not present or represented when the said order was passed.

The prothonotary and senior master also directed the defendants to file their written statement within a period of 30 days, failing which it was ordered that the suit would be transferred to the list of undefended suits. Subsequently no written statement was filed and an ex parte decree was passed against the defendants by the court.

The defendants filed an application before the Bombay High Court for setting aside of the ex-parte decree, and to recall the order by which the suit was transferred to the list of undefended suits. The plaintiffs challenged the maintainability of the application on the contention that the defendants ought to have filed an appeal challenging the decree, rather than an application for setting aside the ex-parte decree.

The Bombay High Court, while taking a view that the application was maintainable, held that, as the suit had been converted from a regular suit to a commercial suit, new timelines for filing of written statement could be prescribed only by the Commercial Court under section 15(4) of the Commercial Courts Act, 2015, as the provisions of this act prevail over the Rules of Chartered High Courts. Accordingly, the order of the prothonotary and senior master transferring the matter to the list of undefended suits was without jurisdiction.

The dispute digest is compiled by Numen Law Offices, a multi-disciplinary law firm based in New Delhi & Mumbai. The authors can be contacted at support@numenlaw.com. Readers should not act on the basis of this information without seeking professional legal advice.