CS(COMM) 531/2017

10th January 2019

Petitioner Counsel: Mr. Vineet Tayal
Respondent Counsel: Mr. Saurabh Seth

Cases Cited :
Paras 3, 11: Telefonaktiebolaget L.M. Ericsson Vs. Lava International Limited, 226(2016) DLT 342
Para 4: Delhi Transco Limited Vs. Hythro Engineers Pvt. Ltd., 2012 (3) ARBLR 349 (Delhi)
Para 5: Northern Railway Vs. M/s.Pioneer Publicity Corp.Pvt. Ltd. Civil Appeal No.10340/2016
Paras 6, 7: Indian Statistical Institute Vs. M/s. Associated Builders and others AIR 1978 S C 335
Para 7: S.R. Kulkarni Vs. Birla VXL Ltd., 1998 (3)RCR (Civil) 436
Para 10: Vikram Bakshi & Ors. Vs. Sonia Khosla (Dead) By LRs., (2014) 15 SCC 80
Para 11: Dr. Sukhdev Singh Gambhir Vs. Amrit Pal Singh & Ors., ILR (2003) I Delhi 577

JUDGEMENT

JAYANT NATH, J.

OA No.3/2019 in CS(Comm.)531/2017

1. This appeal is filed seeking to impugn the order of Joint Registrar dated 20.11.2018 whereby the application for condonation of delay in re-filing the written statement was dismissed and the written statement filed by the defendant/appellant was not taken on record.

2. Learned counsel for the appellant has pointed out that the appellant/defendant was served on 31.8.2017 and the written statement has admittedly been filed on 23.12.2017 i.e. within 82 days. Hence, there was a delay and an application for condonation of delay has been filed. He also states that the parties were appearing before the Delhi High Court Mediation and Conciliation Centre on 27.9.2017 to 20.7.2018 and this fact would itself be a ground for condonation of delay in filing the written statement.

3. I have heard learned counsel for the parties. Learned counsel appearing for the appellant has relied upon the judgment of this court in Telefonaktiebolaget L.M. Ericsson vs. Lava International Limited, 226(2016) DLT 342 to contend that where the parties were in Mediation from 27.9.2017 to 20.7.2018 and the period spent in mediation would have to be excluded for the purpose of computing the period for filing the written statement.

4. Learned counsel appearing for the plaintiff/respondent has opposed the present appeal and has pointed out that though the written statement was filed on 23.12.2017 but objections were not removed by the appellant and the written statement kept lying in objections. He submits that this is also evident from the orders of the Joint Registrar dated 4.1.2018, 22.2.2018 etc. He submits that the written statement was finally brought on record when the appellant filed IA No.15813/2018 on 20.11.2018 seeking condonation of delay in filing and re-filing the written statement. He relies upon judgment of a Division Bench of this court in Delhi Transco Limited vs. Hythro Engineers Pvt. Ltd., 2012 (3) ARBLR 349 (Delhi) to contend that in a case of refilling like this case the same would be considered as the actual date of filing. He also relies upon appropriate rules of Original Side of this court to the said effect.

5. It is settled legal position that delay in re-filing has to be considered on a different footing. The Supreme Court in Civil Appeal No.10340/2016 Northern Railway vs. M/s.Pioneer Publicity Corp.Pvt. Ltd. while dealing with the re-filing of objections under section 34 of the Arbitration Act noted as follows:-

“Mr. Amarjeet Singh Chandiok, learned senior counsel appearing for the respondent submitted that Section 34(3) of the Act bars re-filing beyond the period stipulated therein. The said sub-Section reads as follows:
“34.(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal.
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.”
We find that said section has no application in re-filing the petition but only applies to the initial filing of the objections under Section 34 of the Act. It was submitted on behalf of the respondent that Rule 5(3) of the Delhi High Court Rules states that if the memorandum of appeal is filed and particular time is granted by the Deputy Registrar, it shall be considered as fresh institution. If this Rule is strictly applied in this case, it would mean that any re-filing beyond 7 days would be a fresh institution. However, it is a matter of record that 5 extensions were given beyond 7 days. Undoubtedly, at the end of the extensions, it would amount to re-filing. We are not inclined to accept this contention particularly since the petitioner has offered an explanation for the delay for the period after the extensions.”

6. Similarly, the Supreme Court in Indian Statistical Institute vs. Associate Builders and Ors., AIR 1978 SC 335 held as follows:-

“10. The High Court was in error in holding that there was any delay in filing the objections for setting aside the award. The time prescribed by the Limitation Act for filing of the objections is one month from the date of the service of the notice. It is common ground that the objections were filed within the period prescribed by the Limitation Act though defectively. The delay, if any, was in representation of the objection petition after rectifying the defects. Section 5 of the Limitation Act provides for extension of the prescribed period of limitation. If the petitioner satisfies the court that he had sufficient cause for not preferring the objections within that period. When there is no delay in presenting the objection petition Section 5 of the Limitation Act has no application and the delay in representation is not subject to the rigorous tests which are usually applied in excusing the delay in a petition under Section 5 of the Limitation Act. The application filed before the High Court for condonation of the delay in preferring the objections and the order of the court declining to condone the delay are all due to misunderstanding of the provisions of the Civil Procedure Code. As we have already pointed out in the return the Registrar did not even specify the time within which the petition will have to be re-presented.”

7. Reference in this context may also be had to the judgment of the Division Bench of this court in S.R. Kulkarni vs. Birla VXL Ltd., 1998 (3)RCR (Civil) 436 where the court held as follows:-

“8. Notwithstanding which of the aforesaid Rules are applicable, the question of condensation of delay in refiling of an application has to be considered from a different angle and viewpoint as compared to consideration of condensation of delay in initial filing. The delay in refiling is not subject to the rigorous tests which are usually applied in excusing the delay in a petition filed under Section 5 of the Limitation Act (See Indian Statistical Institute Vs. M/s. Associated Builders and others AIR 1978 S C 335. In the present case, the initial delay of 7 days in filing the application for leave to defend stood condoned and that has not been challenged by any of the parties. It is no doubt true that the counsel for the appellant had not been very diligent after filing of application for leave to defend on 19th August, 1995 as counsel did not check whether the application was lying in the Registry with any objection or not. Considering however, the nature of the objections, it was a matter of removal of the objections by the counsel and on the facts of the present case, it is difficult in this case to attribute any negligence to the party. On the facts of the case, the effect of negligence or 'casual approach', which would be appropriate term to be used here, of the counsel on his client, does not deserve to be so rigorous so as to deny condensation of delay in refiling the application. The casual approach of the counsel is evident as no timely efforts were made firstly to find out after filing application on 19th August, 1995 as to whether the Registry had raised any objection or not. Secondly, despite order of the Joint Registrar dated 9th January, 1996, the objection was removed only on 4th March, 1996 i.e. after the date which the Joint Registrar had fixed for the application being posted for hearing before the Court. When the application was refiled on 4th March, 1996, one would expect the person filing to be more careful thereby not giving an opportunity to the Registry to raise any other objection. But that was no so. The result was that the second objection was raised which, as noticed above, was removed on 21st March, 1996 but application was refiled only on 27th March, 1996. Apart from this casual approach, we do not find any mala fide intention on the part of the appellant to delay the proceedings. When there is negligence or causal approach in a matter like this in refiling of an application, though the court may not be powerless to reject an application seeking condensation and may decline to condone the delay but at the same time, passing of any other appropriate order including imposition of cost can be considered by the court to compensate the other party from delay which may occur on account of refiling of the application.”

8. Clearly, keeping in view the above legal position, the fact that there had been delay in re-filing of the written statement due to the casual approach of the appellant would normally not be a ground to debar the filing of the written statement. The delay on account of negligent acts on the part of the defendant can be cured by imposition of cost on the defendant.

9. Even otherwise, in my opinion, the fact that the parties were before the Mediation Centre, when the delay in re-filing unfolded would be a sufficient ground to condone the delay in re-filing the written statement.

10. One cannot forget the object of mediation. The Supreme Court in Vikram Bakshi & Ors. v. Sonia Khosla (Dead) By LRs., (2014) 15 SCC 80 held as follows:

“15. According to us it would have been more appropriate for the parties to at least agree to resort to mediation as provided Under Section 89 if Code of Civil Procedure and make an endeavour to find amicable solution of the dispute, agreeable to both the parties. One of the aims of mediation is to find an early resolution of the dispute. The sooner dispute is resolved the better for all the parties concerned, in particular, and the society, in general. For parties, dispute not only strains the relationship but also destroy it. And, so far as society is concerned it affects its peace. So what is required is resolution of dispute at the earliest possible opportunity and via such a mechanism where the relationship between individual goes on in a healthy manner. Warren Burger, once said:
The obligation of the legal profession is... to serve as healers of human conflict... (we) should provide mechanisms that can produce an acceptable result in shortest possible time, with the least possible expense and with a minimum of stress on the participants. That is what justice is all about.
MEDIATION is one such mechanism which has been statutorily brought into place in our Justice System. It is one of the methods of Alternative Dispute Resolution and resolves the dispute in a way that is private, fast and economical. It is a process in which a neutral intervener assists two or more negotiating parties to identify matters of concern, develop a better understanding of their situation, and based upon that improved understanding, develop mutually acceptable proposals to resolve those concerns. It embraces the philosophy of democratic decision-making [Alfin, et al., Mediation theory & Practice, (2nd Ed. 2006) Lexis Nexis.
16. Thus, mediation being a form of Alternative Dispute Resolution is a shift from adversarial litigation. When the parties desire an on-going relationship, mediation can build and improve their relationships. To preserve, develop and improve communication, build bridges of understanding, find out options for settlement for mutual gains, search unobvious from obvious, dive underneath a problem and dig out underlying interests of the disputing parties, preserve and maintain relationships and collaborative problem solving are some of the fundamental advantages of mediation. Even in those cases where relationships have turned bitter, mediation has been able to produce positive outcomes, restoring the peace and amity between the parties.
17. There is always a difference between winning a case and seeking a solution. Via mediation, the parties will become partners in the solution rather than partners in problems. The beauty of settlement through mediation is that it may bring about a solution which may not only be to the satisfaction of the parties and, therefore, create a win situation, the outcome which cannot be achieved by means of judicial adjudication. Thus, life as well as relationship goes on with Mediation for all the parties concerned and thus resulting into peace and harmony in the society. While providing satisfaction to the litigants, it also solves the problem of delay in our system and further contributes towards economic, commercial and financial growth and development of the country.
18. This Bench is of firm opinion that mediation is new dimension of access to justice. As it is one of the best forms, if not the best, of conflict resolution. The concept of Justice in mediation is advanced in the oeuvres of Professors Stulberg, Love, Hyman, and Menkel-Meadow (Self-Determination Theorists). Their definition of justice is drawn primarily from the exercise of party self-determination. They are hopeful about the magic that can occur when people open up honestly and empathetically about their needs and fears in uninhibited private discussion. And, as thinkers, these jurists are optimistic that the magnanimity of the human spirit can conquer structural imbalances and resource constraints.
Professor Stulberg, in his masterful comment on the drafting of the Uniform Model Mediation Act, Fairness and Mediation, begins with the understated predicate that "the meaning of fairness is not exhausted by the concept of legal justice." In truth, the more pointed argument advanced in the article is that legal norms often diverge quite dramatically from our notion of fairness and the notion of fairness of many disputants. Legal rules, in Stulberg's vision, are ill-equipped to do justice because of their rigidity and inflexibility. Professors Lela Love and Jonathan M. Hyman argue that mediation is successful because it provides a model for future collaboration. The authors state that the process of mediation entails the lesson that when people are put together in the same room and made to understand each other's goals, they will together reach a fair resolution. They cite Abraham Lincoln's inaugural address which proposed that in a democracy, '''a patient confidence in the ultimate justice of the people' to do justice among themselves... is a pillar of our social order." Professor Carrie Menkel-Meadow presents a related point of view in making the case that settlement has a political and ethical economy of its own and writes:
Justice, it is often claimed, emerges only when lawyers and their clients argue over its meaning, and, in turn, some authoritative figure or body pronounces on its meaning, such as in the canonical cases of the late-twentieth century... For many years now, I have suggested that there are other components to the achievement of justice. Most notably, I refer to the process by which we seek justice (party participation and empowerment, consensus rather than compromise or command) and the particular types of outcomes that might help to achieve it (not binary win-lose solutions, but creative, pie-expanding or even shared solutions).
Justice in mediation also encompasses external developments, beliefs about human nature and legal Regulation. Various jurists are drawn to mediation in the belief that litigation and adversarial warring are not the only, or the best ways to approach conflict. And how optimistically and skeptically mediators assess the capabilities of individual parties and institutional actors to construct fair outcomes from the raw material of human conduct.
Mediation ensures a just solution acceptable to all the parties to dispute thereby achieving 'win-win' situation. It is only mediation that puts the parties in control of both their disputes and its resolution. It is mediation through which the parties can communicate in a real sense with each other, which they have not been able to do since the dispute started. It is mediation which makes the process voluntary and does not bind the parties against their wish. It is mediation that saves precious time, energy as well as cost which can result in lesser burden on exchequer when poor litigants are to be provided legal aid. It is mediation which focuses on long term interest and helps the parties in creating numerous options for settlement. It is mediation that restores broken relationship and focuses on improving the future not of dissecting past. It is based on an alternative set of values in which formalism is replaced by informality of procedure, fair trial procedures by direct participation of parties, consistent norm enforcement by norm creation, judicial independence by the involvement of trusted peers, and so on. This presents an alternative conceptualization of justice.”

11. Reference may also be had to the judgment of a Coordinate Bench of this court in Telefonaktiebolaget L.M. Ericsson vs. Lava International Limited(supra). The learned Single Judge noted as follows:-

“18. It is evident that from 31st August, 2015 till 29th October, 2015 undisputedly parties were trying to settle their dispute. Time of 59 days was spent on settlement talks which at the end of the day could not be materialized. Interim application is at the stage of conclusion of the arguments on behalf of the defendant. The advantage, if any, has gone in favour of the defendant as there is no ex-parte interim injunction in the present case. After having heard learned counsel for the parties, I am of the view that since the parties were trying to resolve their dispute amicably and that process has taken 59 days, the said period is to be excluded from the period provided in the Civil Procedure Code and Clause 4D(i) of Commercial Courts Ordinance.
19. Even otherwise, it is a well settled principle of law that if parties are negotiating settlement during the pendency of a matter, then the Court will condone the delay in filing of written statement due to such settlement talks. This Court, in its decision in Dr. Sukhdev Singh Gambhir v. Amrit Pal Singh & Ors., ILR (2003) I Delhi 577, inter alia held that:
"5. Having heard, counsel for the parties and taking into consideration the respective pleas urged before me, I am of the view that this is a case where the delay in filing of the written statement deserves to be condoned. Firstly it is a suit for partition concerning family members where every endeavor should be made for amicable settlement. Even otherwise, the mandate under Section 89 effort ought to be made to settle the matter. Secondly, the defendant had already filed the written statement in the suit in District Court. Hence it could not be the situation that the defendant was delaying the case, but on account of the attempts at settlement written statement was not filed" (emphasis added)
……
21. The prescribed period of 120 days’ timeline will be applicable in cases filed subsequent to the notification of the Ordinance and the same is not applicable in the present case.”

12. Hence, this court would encourage mediation as a mechanism to settle the disputes. While the mediation process is on to insist that the parties should speedily file pleadings in its very nature would be an adversarial act and not be conducive for the mediation process. Hence pendency of the mediation proceedings itself would not be sufficient ground to condone the delay in re-filing the written statement.

13. In my opinion, the impugned order suffers from material illegality. I set aside the said order and allow the appeal. Written statement will be taken on record subject to payment of costs of Rs.15,000/-.