Khaitan v. IL&FS: Conditionally Condoning Delay in Filing Written Statements

This Supreme Court of India case, Aditya Khaitan & Ors. v. IL & FS Financial Services Limited, concerns the late filing of written statements by defendants in a commercial suit. The High Court rejected the defendants' applications for extension, citing expired deadlines. The Supreme Court reversed this decision, finding that the defendants' applications, filed during the COVID-19 pandemic, fell within the extended timelines established by the Court's own suo motu orders addressing pandemic-related limitations. 

Ultimately, the Court allowed the appeals, ordering the written statements be accepted.

The Supreme Court ruling in Aditya Khaitan & Ors. v. IL and FS Financial Services Limited was significantly influenced by prior case law, particularly regarding the interpretation of orders related to the extension of limitation periods during the COVID-19 pandemic. Here's how:

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Initial Stance: Sagufa Ahmed Case

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The High Court initially relied on the case of Sagufa Ahmed and Others v. Upper Assam Plywood Products Private Limited and Others. This case held that orders issued by the Supreme Court under Article 142 of the Constitution of India only extended the "period of limitation," not the period up to which delay could be condoned.

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In Sagufa Ahmed, the court determined that the orders issued to extend deadlines during the pandemic did not allow for the condonation of delays beyond the statutory outer limits. The High Court in Aditya Khaitan applied this principle, rejecting the appellants' applications because the 120-day outer limit for filing written statements had expired before the COVID-19 extensions came into effect.

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Shift in Interpretation: Prakash Corporates Case

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The Supreme Court, in Aditya Khaitan, took a different view based on the subsequent case of Prakash Corporates v. Dee Vee Projects Limited. Prakash Corporates distinguished Sagufa Ahmed by emphasizing the purpose of the Supreme Court's orders during the pandemic.

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Prakash Corporates noted that later orders by the Supreme Court in the same In Re: Cognizance for Extension of Limitation case, particularly the order dated 08.03.2021, were not available when Sagufa Ahmed was decided.

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These later orders, specifically the one of 08.03.2021, clarified that the period from 15.03.2020 to 14.03.2021 should be excluded when computing limitation periods. This exclusion applied not only to the initial limitation period but also to the "outer limits (within which the court or tribunal can condone delay)".

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Impact on Aditya Khaitan Ruling

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By applying the principles of Prakash Corporates and the orders of 08.03.2021, the Supreme Court in Aditya Khaitan found that the applications for taking the written statements on record were within the extended time period.

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The court emphasized that the pandemic was an extraordinary situation that required the protection of the rights of parties, ensuring remedies and defenses were not barred.

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The court noted the 08.03.2021 order explicitly stated that the exclusion of time applied to the outer limits for condoning delay, thus negating the basis of the Sagufa Ahmed ruling.

The Supreme Court ultimately allowed the appeals, directing the High Court to take the written statements on record.