MANU/DE/2836/2019

Equivalent Citation: 2019IXAD(Delhi)55, 2019(177)DRJ398

IN THE HIGH COURT OF DELHI

CS (COMM) 1092/2018
Decided On: 28.08.2019
Appellants: Red Bull AG
Vs.
Respondent: Pepsico India Holdings Pvt. Ltd. and Ors.
Hon'ble Judges/Coram:
Jayant Nath, J.
Counsels:
For Appellant/Petitioner/Plaintiff: Sanjeev Sindhwani, Sr. Adv., Naqeeb Nawab, Gunjan
Paharia, Himanshu Deora and Sashwat Rakshit, Advs.
For Respondents/Defendant: A.S. Chandhiok, Sr. Adv., Dheeraj Nair, Shruti Dass, Ritesh
Singh and Tejashwi Chaudhry, Advs.
Case Note:
Civil Procedure Code, 1908.
Section 26, 27, Order 4, Order 5 Rule 1 & Order 7 Rule 5 - Service of summon-
-Written statement--Delay--Scope of--Suit has been duly instituted and the
defendant should now answer the claim and file the written statement--
Defendant has not by his conduct waived his right to have the summons
served upon him--Written statement has been filed within the outer
limitation prescribed by the proviso to Order 8 rule 1 CPC as applicable to the
commercial suits--Delay beyond the period of 30 days in filing written
statement can only be condoned for reasons to be recorded in writing--
Payment of such cost as the court may deem fit--Defendant was justifiably
believing that summons had not been served--He had not been called upon to
file its written statement--Parties were before the mediation centre trying to
settle the matter,-- It constitutes sufficient cause to explain the delay on the
part of the defendant in filing the written statement--Written statement
allowed subject to cost of Rs. 30,000/-. [35] and [36]
JUDGMENT
Jayant Nath, J.
1. By this judgment I will decide the objection raised by the plaintiff, namely, that the
written statement of the defendants cannot be taken on record and the same be taken
off the record. It was agreed that the issue as to whether the written statement is filed
within the limitation period may be adjudicated upon on the basis of the submissions
made in court. There is no formal application on record by the defendant for
condonation of delay in filing the written statement inasmuch as the stand taken by the
defendant was that the summons had not yet been served on the defendant.
2 . The above suit came up for the first hearing before this court on 28.08.2018. The

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defendants entered appearance on that date itself perhaps having seen the matter in the
list on that date. Learned counsel for the plaintiff had requested for a short adjournment
on the ground that there is a possibility of settlement between the parties.
3 . On the next date when the matter came up i.e. on 24.09.2018, a submission was
made by the learned counsel for the parties that they would like to try and settle the
matter through mediation. Parties were directed to appear before the Delhi High Court
Mediation and Conciliation Centre. However, the mediation proceedings failed on
28.11.2018. The defendants have filed their written statement on 06.03.2019. The issue
urged by the plaintiff is that this written statement cannot be taken on record as 120
days have lapsed from the date of receipt of summons i.e. with effect from 28.08.2018
when the defendants entered appearance.
4 . Learned senior counsel for the plaintiff has vehemently argued that the written
statement filed by the defendants cannot be allowed to be taken on record as it is filed
beyond the period of 120 days from the date summons were received by the
defendants. He relies upon the judgment of the Supreme Court in the case of M/s. SCG
Contracts India Pvt. Ltd. vs. K.S. Chamankar Infrastructure Pvt. Ltd. & Ors.,
MANU/SC/0227/2019 : 2019 (4) Scale 574 to support his contention that there is an
absolute bar in taking the written statement on record as 120 days period has expired.
He also relies upon the judgment of the Single Bench of this court in the case of OKU
Tech Pvt. Ltd. vs. Sangeet Agarwal & Ors., MANU/DE/2036/2016 which judgment was
upheld by the Supreme Court in the above noted judgment. He also relies upon the
judgment of the Division Bench of this court in the case of Flight Centre Travels Pvt.
Ltd. vs. Flight Centre Ltd. & Anr., MANU/DE/0233/2013 : 2013 (198) DLT 407 to
contend that where the defendant has entered appearance at an initial stage without
actual service of summons, there is a waiver of the right to have summons served on
him. He also relies upon the judgment of the Supreme Court in the case of Siraj Ahmad
Siddiqui vs. Prem Nath Kapoor, MANU/SC/0394/1993 : AIR 1993 SC 2525 in support of
the aforenoted contention.
5. Learned senior counsel for the defendant has relied upon various statutory provisions
including Section 26, 27, Order IV, Order V. Rule 1 CPC and Order VII Rule 5 CPC to
contend that the court has to pass an order to convert a plaint into a suit if the court
finds that the plaint meets the stated requirement and then only summons are to be
issued to the defendant. In the absence of a specific direction for issue of summons, it
cannot be said that the summons have been issued/received by the defendant. He also
relies upon Chapter IV Rule 7 and Chapter VI Rule 1(f) of the Delhi High Court Rules to
reinforce the aforenoted contention. He also relies upon the judgment of the Division
Bench of this Court in Bright Enterprises Pvt. Ltd. & Anr. vs. MJ Bizcraft LLP & Anr.,
MANU/DE/0017/2017 : 2017 (69) PTC 596 [Del] [DB].
6 . I may look at the statutory provision in this regard. Order VIII Rule 1 CPC as
applicable to commercial suits read as follows:-
"1. Written statement
[(1)] The defendant shall within 30 days from the date of service of summons
on him present a written statement of his defence.
xxx
Provided that where the defendant fails to file the written statement within the
said period of thirty days, he shall be allowed to file the written statement on

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 such other day, as may be specified by the court, for reasons to be recorded in
writing and on payment of such costs as the Court deems fit, but which shall
not be later than one hundred and twenty days from the date of service of
summons and on expiry of one hundred and twenty days from the date of
service of summons, the defendant shall forfeit the right to file the written
statement and the court shall not allow the written statement to be taken on
record."
7 . As per the aforenoted provision, the defendant within 30 days from the date of
service of summons has to file his written statement. For commercial suits, in case the
written statement is not filed within the said period of 30 days, he may be allowed to
file the same on the conditions stated therein but not later than 120 days from the date
of service of summons. On expiry of the said period of 120 days from the date of
service of summons, the defendant's right to file the written statement stands forfeited.
8. The Supreme Court while interpreting the said provision i.e. Order VIII Rule 1 CPC in
M/s. SCG Contracts India Pvt. Ltd. vs. K.S. Chamankar Infrastructure Pvt. Ltd. & Ors.
(supra) held as follows:-
"8. xxx
A perusal of these provisions would show that ordinarily a written statement is
to be filed within a period of 30 days. However, grace period of a further 90
days is granted which the Court may employ for reasons to be recorded in
writing and payment of such costs as it deems fit to allow such written
statement to come on record. What is of great importance is the fact that
beyond 120 days from the date of service of summons, the defendant shall
forfeit the right to file the written statement and the Court shall not allow the
written statement to be taken on record. This is further buttressed by the
proviso in Order VIII Rule 10 also adding that the Court has no further power to
extend the time beyond this period of 120 days.
9.xxx
10. Several High Court judgments on the amended Order VIII Rule 1 have now
held that given the consequence of non-filing of written statement, the
amended provisions of the CPC will have to be held to be mandatory. [See Oku
Tech Private Limited vs. Sangeet Agarwal & Ors. by a learned Single Judge of
the Delhi High Court dated 11.08.2016 in CS (OS) No. 3390/2015 as followed
by several other judgments including a judgment of the Delhi High Court in
Maja Cosmetics vs. Oasis Commercial Pvt. Ltd. MANU/DE/7868/2017.)
11. We are of the view that the view taken by the Delhi High Court in these
judgments is correct in view of the fact that the consequence of forfeiting a
right to file the written statement; non-extension of any further time; and the
fact that the Court shall not allow the written statement to be taken on record
all points to the fact that the earlier law on Order VIII Rule 1 on the filing of
written statement under 8 Order VIII Rule 1 has now been set at naught.
xxx
16. Learned counsel for the respondents then strongly relied upon the inherent
powers of the Court to state that, in any case, a procedural provision such as
contained in the amendment, which may lead to unjust consequences can

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 always, in the facts of a given case, be ignored where such unjust
consequences follow, as in the facts of the present case. We are again of the
view that this argument has also no legs to stand on, given the judgment of
this Court in Manohar Lal Chopra vs. Rai Bahadur Rao Raja Seth Hiralal,
MANU/SC/0056/1961 : [1962] Suppl 1 SCR 450. In this judgment, the Court
held:
"The suit at Indore which had been instituted later, could be stayed in
view of s. 10 of the Code. The provisions of that section are clear,
definite and mandatory. A Court in which a subsequent suit has been
filed is prohibited from proceeding with the trial of that suit in certain
specified circumstances. When there is a special provision in the Code
of Civil Procedure for dealing with the contingencies of two such suits
being instituted, recourse to the inherent powers 10 under s. 151 is not
justified..." (at page 470)
Clearly, the clear, definite and mandatory provisions of Order V. read with
Order VIII Rule 1 and 10 cannot be circumvented by recourse to the inherent
power under Section 151 to do the opposite of what is stated therein."
9. In OKU Tech Pvt. Ltd. vs. Sangeet Agarwal & Ors. (supra), a Coordinate Bench of this
court noted the relevant facts, namely, that on 27.11.2015, learned counsel for
defendant Nos. 1 to 5 accepted summons and notice and therefore, that was the starting
date for the purpose of calculating the period within which the written statement had to
be filed. A plea was raised by the defendant that as the parties were seeking to arrive at
a settlement, therefore, the failure to file the written statement was for a bona fide
reason. This court had rejected the said plea and held as follows:-
"12. Mr. Mason appearing for Defendants 1, 3 and 5 pointed out that the parties
were seeking to arrive at a settlement and, therefore, the failure to file written
statement was for bona fide reasons and that the Court should exercise its
discretion to condone the delay of 14 days, which according to him is
insubstantial. The Court is unable to accept the above plea for the simple
reason that the discretion of the Court to extend the time for filing written
statement beyond 120 days after service of summons no longer survives in
view of the amendments to the CPC brought about by the Schedule to the Act.
The outer limit for filing written statement is now 120 days from the date of
service of the summons.
10. Clearly, the legal position is quite clear. The defendant has 30 days to file written
statement from the date summons are served on him. This period can be extended on
grounds as stated upto 120 days and no more. On expiry of the said period of 120 days,
the defendant forfeits his rights to file written statement.
1 1 . The starting point for computing the period of limitation for filing the written
statement is the service of summons on the defendant.
12. Regarding the issue of summons/service of summons reference may be had to the
relevant statutory provisions of the CPC, namely, Section 26, 27, Order IV Rule 1 CPC,
Order V. Rule 1 CPC and Order VII Rule 5 CPC which read as follows:-
"26. Institution of suits
Every suit shall be instituted by the presentation of a plaint or in such other

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 manner as may be prescribed.
27. Summons to defendants
Where a suit has been duly instituted, a summons may be issued to the
defendant to appear and answer the claim and may be served in manner
prescribed."
"ORDER IV: INSTITUTION OF SUITS
1. Suit to be commenced by plaint
(1) Every suit shall be instituted by presenting a plaint in duplicate to the Court
or such officer as it appoints in this behalf.
(2) Every plaint shall comply with the rules contained in Order VI and VII so far
as they are applicable.
(3) The plaint shall not be deemed to be duly instituted unless it complies with
the requirement specified in sub-rules (1) and (2).
xxx"
"ORDER V: ISSUE AND SERVICE OF SUMMONS
Issue of Summons
1. Summons
(1) When a suit has been duly instituted a summons may be issued to the
defendant to appear and answer the claim and to file the written statement of
his defence, if any, within 30 days from the date of service of summons on the
defendant:
xxx
Provided further that where the defendant fails to file the written
statement within the said period of 30 days, he shall be allowed to file
the written statement on such other day, as may be specified by the
court, for reasons to be recorded in writing and on payment on such
costs as the Court deems fit, but which shall not be later than one
hundred and twenty days from the date of service of summons and on
expiry of one hundred and twenty days from the date of service of
summons, the defendant shall forfeit the right to file the written
statement and the court shall not allow the written statement to be
taken on record.
xxx"
"ORDER VII
xxx
5. Defendant's interest and liability to be shown
The plaint shall show that the defendant is or claims to be interested in subject-

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 matter, and that he is liable to be called upon to answer the plaintiff's demand.
xxx"
13. Reference may also be had to the Chapter IV Rule 7 and Chapter VI Rule 1 (F) of
the Delhi High Court Rules which read as follows:-
"CHAPTER IV PRESENTATION OF PLEADINGS, OTHER DOCUMENTS AND
MAINTENANCE OF CASE FILES
xxx
7 . Issuance of summons.-Notwithstanding anything contained in the
Code, the Court may, in the first instance itself, order issuance of
summons/notices to opposite party by any or all modes of service
provided in the Code and Rule 1(e) of Chapter VI of these Rules.
xxx"
"CHAPTER VI PROCESSES/NOTICES ETC.
(1) xxx
(f) The summons/notice shall specify the time within which the written
statement/response is to be filed as per the Code or these Rules.
xxx"
14. A perusal of the aforenoted statutory provisions would show that when a suit is
duly instituted summons may be issued to the defendant to appear and answer the
claim. Hence, the court has to ensure that the suit has been duly instituted and
thereafter the court may issue summons on the defendant.
15. Mulla on CPC, 18th Edn. while interpreting Order 5 Rule 1 CPC states as follows:-
"Under this rule, it is obligatory to issue summons to defendant unless the case
falls within the proviso. When a party is sought to be impleaded in a legal
proceedings, service of notice on such party cannot be a mere formality but
should in fact be a reality."
16. In this background the Division Bench of this court in the case of Bright Enterprises
Pvt. Ltd. & Anr. Vs. MJ Bizcraft LLP & Anr. (supra) held as follows:-
"17. From the above and particularly upon examining the provisions of Section
27 and Order V. Rule 1(1) CPC, it is evident that when a suit is regarded as
having been 'duly instituted', a summons may be issued to the defendant. The
use of the expression 'duly instituted' has to be seen in the context of the
provisions of Orders Order VI, RULE 1 and VII of the CPC. In the present
matter, it is nobody's case that the suit had not been duly instituted in the
sense that it did not comply with the requirements of Order Order VI, RULE
1and VII CPC. It is neither a case of return of a plaint under Order VII Rule 10
nor a case of rejection of a plaint under Order VII Rule 11 CPC. The present
case is one of dismissal of the suit itself on merits. Therefore, the only thing
that needs to be examined is whether the Court had a discretion to issue or not
to issue summons given that the suit had been duly instituted. In our view, the

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 use of the word 'may' does not give discretion to the Court and does not make
it optional for it to issue summons or not. This is further fortified by the fact
that the first proviso to Order V. Rule 1(1) itself gives a situation where
summons must not be issued and that happens when a defendant appears at
the presentation of the plaint and admits the plaintiffs claim. Therefore, in such
a situation, there is no requirement for issuance of summons and that is why
the word 'may' has been used in Order V. Rule 1(1). In all other cases, when a
suit has been duly instituted' and is not hit by either Order VII Rule 10 or Order
VII Rule 11 CPC, summons has to be issued to the defendant.
(emphasis added)
1 8 . In the present case, the learned Single Judge has neither returned the
plaint under Order VII Rule 10 nor rejected the plaint under Order VII Rule 11
CPC. Therefore, it was incumbent upon the learned Single Judge to have issued
summons to the respondents/defendants, particularly because the
respondents/defendants had not appeared at the time of presentation of the
plaint and did not admit the claim of the appellants/plaintiffs. The Rule of audi
alteram partem is embedded in Order V. Rule 1 sub-rule (1) read with Section
27 CPC."
17. Hence, it is quite clear that once a suit is stated to have been duly instituted and
the suit is not hit by Order 7 Rule 10 or Order 7 Rule 11 CPC, the suit fulfils the stated
requirement. Summons have to then be issued to the defendant thereafter.
18. Factual position in this case is a bit different.
19. On 28.08.2018 i.e. the first date, this court passed the following order:-
"Learned counsel or the plaintiff submits that there is a possibility of settlement
between the parties. He requests for a short adjournment.
At request, adjourned to 24.09.2018."
20. Thereafter, the court passed the following orders on 24.09.2018, 05.12.2018 and
13.12.2018:
"24.09.2018
The learned counsel for the parties submit that they would like to try and settle
the matter through mediation.
Let the parties appear before the Delhi High Court Mediation and Conciliation
Centre, New Delhi on 04.10.2018 at 3:00 p.m.
As this matter pertains to the trademark, the mediation centre may consider
engaging a mediator conversant with the field of IPR.
List in court on 13.12.2018.
05.12.2018
IA No. 16620/2018
This application is filed under section 151 CPC for early hearing of arguments.
Learned counsel for the plaintiff submits that the matter is fixed to await the

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 outcome of the Settlement process on 13.12.2018. However, he submits that
the settlement talks have failed and hence he would like to argue the injunction
application on 13.12.2018.'
Prayer to the above extent is allowed.
Application stands disposed of.
13.12.2018
No time left.
List on 30.01.2019."
Clearly, there is no formal order issuing summons to the defendants or directing the
defendants to file written statement. This was so as firstly the parties were exploring
the possibility of a settlement on the request of the plaintiff and thereafter on joint
request before the Delhi High Court Mediation and Conciliation Centre.
2 1 . The issue is when the defendant enters appearance on being informed about
pendency of the matter through sources other than the service of formal summons can
it be said that the period of limitation for filing written statement does not commence
till a formal order is passed directing issue of summons/directing the defendant to file
written statement. In my opinion, such an interpretation would not be possible.
22. In this context, reference may be had to the judgment of the Supreme Court in the
case of Siraj Ahmad Siddidiqui vs. Prem Nath Kapoor, MANU/SC/0394/1993 : AIR 1993
SC 2525. I may note the facts of the aforesaid case. The trial court had issued notice to
the appellant requiring him to file a written statement by a particular date and a date
was also given for framing of issues. The appellant was not served and the matter was
directed to be stand over till the date fixed for framing of issues. However, before the
next date the appellant filed an application before the trial court stating that he had not
been served and sought a suitable date for filing the written statement and for deposit
of all the arrears of rent claimed. He also sought a copy of the plaint. The appellant
made a deposit in the trial court of the arrears. It was in those facts that the Supreme
Court held as follows:-
"14. We must now consider the judgment of the Allahabad High Court in Sri
Nath Aggarwal's case from which support has been derived in the claims is, in
fact, in his favour. In the court below the case of the defendant therein was that
since he had deposited the entire amount before the first date of hearing he
was entitled to the protection of Section 20(4) of the said Act, but this
contention was rejected and the defendant filed a revision application before
the High Court. It was argued on his behalf that, admittedly, no summons had
been issued and, therefore, he had not been given the opportunity of taking the
benefit of Section 20(4) of the said Act by depositing the requisite monies on or
before the first date of hearing. The defendant had, admittedly, deposited the
entire amount due from him on 24th October, 1978, which was the first date
when the court applied its mind and this should be treated as the date of the
hearing of the suit. Prior to this date no other date had been fixed for the
hearing of the suit. Notice was taken of the provisions of Section 20(4) of the
said Act and the Explanation thereto defining the expression first hearing. The
High Court said that if the defendant appears before the court after the
registration of the suit and he is informed about the nature of the claim and the

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 date, fixed for reply thereto, the defendant must be deemed to have waived the
right to the summons served on him. The same legal position would arise when
a defendant suo moto appeared before the court before the actual service of the
summons. In such a case, if some date was fixed for filing the written
statement or for the hearing of the suit it would be too technical to hold that
service of the summons in the ordinary course was till required and that further
proceedings in the suit would take place only thereafter. The High Court
concluded (in para 10) by holding that when the order was passed on 11th
September, 1978 in the presence of counsel for the defendant fixing the date
for filing of the written statement and the date for the final hearing, the
summons was issued and served on the defendant within the meaning of the
Explanation to Section 20(4) of the said Act on that day. Since 11th September,
1978 was the date when the summons was so served and one month's time was
allowed for filing the written statement, though it might be the date for the
taking of a step by the defendant, the defendant should have complied with the
provisions of Section 20(4) of the said Act by that date. This had not been
done. The rent had been deposited only thereafter. In those circumstances, it
was held that the defendant could not avail of the advantage of Section 20(4)
and was liable to be ejected.
(emphasis added)
15. We are in agreement with the ratio of the judgment in so far as it says that
when time is fixed by the court for the filing of the written statement and the
hearing, these dates bind the defendant, regardless of the service of the
summons, and compliance with the provisions of Section 20(4) of the said Act
must be judged upon the basis of the dates so fixed."
23. Similarly, a Division Bench of this court in the case of Flight Center Travels Pvt.
Ltd. vs. Flight Centre Ltd. & Anr., (supra) held as follows:-
"23. The first significant issue to be examined is as to whether it can be said
that the absence of service of summons and notice on respondent No. 1
amounts to in effect, nullifying a decree passed against the said respondent and
requiring the ex parte decree to be set aside. We have already noticed that this
plea is available to respondent No. 1 and not to respondent No. 2, a position
undisputed by learned counsel for the respondents.
24. The facts, as they emerge from the suit records, have already been noticed
above in detail at the inception of the judgment. The facts show that the
counsel did enter appearance for defendants 1 to 4 and thereafter continued to
appear for the respondents. It is also a fact that there is nothing on record to
show the completion of service qua respondent No. 1 herein. It has been rightly
emphasized by learned counsel for the appellant that the service of summons is
in furtherance of rules of audi alteram partem, i.e., opposite side may get a
chance to answer the case and no one should be condemned unheard. Let us
say, if a defendant having advanced knowledge of the summons enters
appearance through counsel and accepts notice in Court, can it still be said that
the technical process of issuance of summons and notices to him should still be
adhered to? The answer to this question, in our view, would be in the negative.
This is the reason why the word used in Order V. Rule 1 (1) of the said Code is
"may" instead of "shall". This position is abundantly clear in view of proviso
added by the amendment of 1976 to Order V. Rule 1 of the said Code in
addition to the existing proviso, in terms whereof no such summons are to be

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 issued where a defendant appears at the presentation of the plaint and admitted
the plaintiffs claim. For convenience of reference we reproduce Order V. Rules 1
& 2 of the said Code as under:-
.......
2 5 . The objective of the process of issuance of summons is to obtain the
presence of the defendant for final opportunity to be given to him to rebut the
claim against him. Thus, if he appears at the initial stage in a sense there is
waiver of the right to have summons served on him. This position has been
explained in the case of Sri Nath Agrawal case (supra) and to that extent the
aforesaid has been upheld by the Supreme Court in Siraj Ahmad Siddiqui case
(supra)."
(emphasis added)
24. Hence, when at the initial stage itself before summons are actually served on the
defendant, the defendant appears in court having been informed through various other
sources about the pendency of the proceedings, in such circumstances, it would depend
upon the facts of the case as to whether the conduct of the defendant shows deemed
service of summons or waiver of the right to have the summons served on him.
Needless to say this would be a pure question of fact, dependent upon the facts and
circumstances of each case. Normally, once a defendant has appeared in court without
service of summons it would be deemed that summons stand served on him and that he
has waived his right to receive summons. However, there may be exceptions depending
on the facts and circumstances of each case. This aspect assumes greater significance in
view of the amendment to Order 8 Rule 1 CPC by the Commercial Courts Act whereby a
specified time period has been stipulated for filing of written statement from the date of
service of summons.
25. I may now once again look at the facts of the case. The defendants appeared on the
first date of hearing. It was at the request of the learned counsel for the plaintiff that
the matter was adjourned as it was noted that there was a possibility of settlement. On
the next date, namely, 24.09.2018, a submission was made by the learned counsel for
the parties that they would like to try and settle the matter through mediation. Parties
were directed to appear before the Delhi High Court Mediation and Conciliation Centre.
A perusal of the orders of this court dated 28.08.2018 and 24.09.2018 do not lead to a
conclusion that any finding was recorded by the court that the suit has been duly
instituted and the defendant should now answer the claim and file the written statement
in his defence. Further no conclusion can be reached from the reading of the two orders
that the defendant has by his conduct waived his right to have the summons served
upon him. The orders on the contrary indicate that instead of the adjudicatory process,
for the time being, the parties had adopted a mechanism to settle the matter, firstly by
their own efforts, and thereafter through a formal process of mediation which was to be
undertaken under the aegis of the Delhi High Court Mediation and Conciliation Centre.
26. There is another reason why I may be inclined to hold that the above two orders
dated 28.08.2018 and 24.09.2018 do not in any manner imply a waiver by the
defendant of his right to have summons served on him. Mediation is a recognized
mechanism as an alternative for resolution of disputes. Section 89 of the CPC
recognizes mediation, which reads as follows:
"89. Settlement of disputes outside the Court - (1) Where it appears to the

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 Court that there exist elements of a settlement which may be acceptable to the
parties, the Court shall formulate the terms of settlement and give them to the
parties for their observations and after receiving the observations of the parties,
the Court may re-formulate the terms of a possible settlement and refer the
same for-
(a) arbitration;
(b) conciliation;
(c) judicial settlement including settlement through Lok Adalat; or
(d) mediation.
(2) Where a dispute has been referred-
(a) for arbitration or conciliation, the provisions of the
Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply
as if the proceedings for arbitration or conciliation were
referred for settlement under the provisions of that Act;
(b) to Lok Adalat, the Court shall refer the same to the Lok
Adalat in accordance with the provisions of sub-section (1) of
section 20 of the Legal Services Authority Act, 1987 (39 of
1987) and all other provisions of that Act shall apply in respect
of the dispute so referred to the Lok Adalat;
(c) for judicial settlement, the Court shall refer the same to a
suitable institution or person and such institution or person
shall be deemed to be a Lok Adalat and all the provisions of
the Legal Services Authority Act, 1987 (39 of 1987) shall apply
as if the dispute were referred to a Lok Adalat under the
provisions of that Act;
(d) for mediation, the Court shall effect a compromise between
the parties and shall follow such procedure as may be
prescribed."
27. Mediation is purely a voluntarily dispute resolution mechanism, which is resorted to
by the consent of the parties themselves. This consent can be revoked by any of the
parties at any stage of the mediation proceedings. Reference may be had to the Delhi
High Court Mediation and Conciliation Rules, 2004 (hereinafter referred to as "Rules")
which have been framed section 89 of the CPC by Delhi High Court. Rule 18 of the said
Rules provides that on expiry of 90 days from the date fixed for the first appearance
before a mediator, the mediation/conciliation shall stand terminated unless the court
which referred the matter is of the view that extension of time is necessary. Rule 17 of
the said Rules further clarifies that the mediator only facilitates in arriving at a decision
to resolve the dispute and no settlement can be imposed on any of the parties.
28. The Supreme Court in the case of Vikram Bakshi & Ors. v. Sonia Khosla (Dead) by
Legal Representatives, MANU/SC/0430/2014 : (2014) 15 SCC 80, has stated the
advantages of mediation and has noted that the mediation is a new dimension of access
to justice. The court held as follows:
"16. According to us it would have been more appropriate for the parties to at

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 least agree to resort to mediation as provided under Section 89 CPC 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 the 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 destroys 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 intervenor 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 Edn., 2006) Lexis Nexis].
17. Thus, mediation being a form of alternative dispute resolution is a shift
from adversarial litigation. When the parties desire an ongoing 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 peace and amity between the parties.
1 8 . 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-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.
19. This Bench is of firm opinion that mediation is a 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-

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 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."
29. I may note that there is a trend developing whereby the courts seek to refer the
parties to mediation. In India the Commercial Courts Act, 2015 was recently amended
making pre-institution mediation a mandatory process. Section 12A (1) of the
Commercial Courts Act, 2015 reads as follows:
"12A (1). Pre-Institution Mediation and Settlement:-(1) A suit, which does not
contemplate any urgent interim relief under this Act, shall not be instituted
unless the plaintiff exhausts the remedy of pre-institution mediation in
accordance with such manner and procedure as may be prescribed by rules
made by the Central Government.
xxxxxxxxx"
30. The trend internationally is also to first enforce the Agreement where the parties
have agreed for resolution of the dispute through mediation. Reference in this context
may be had to the judgment of the High Court of Justice Business and Property Courts
of England and Wales Technology and Construction Court (QBD) in Ohpen Operations
UK Limited v. Invesco Fund Managers Limited. (2019) EWHC 2246 (TCC) where the
court held as follows:
"The issue before the court is whether the claim has been issued in breach of a
contractually agreed tiered dispute resolution procedure and, if so, whether
these proceedings should be stayed, pending referral of the dispute to
mediation."
The court held as follows:
"In Cable & Wireless Plc v. IBM United Kingdom Ltd. MANU/UKCM/0075/2002 :
[2002] EWHC 2059 (Comm) Colman J recognised that a contractual agreement
to refer a dispute to ADR could be enforceable by a stay of proceedings:
xxxx
[32] ...In principle ... where there is an unqualified reference to ADR, a
sufficiently certain and definable minimum duty of participation should
not be hard to find...
[34] The reference to ADR is analogous to an agreement to arbitrate.
As such, it represents a free-standing agreement ancillary to the main
contract and capable of being enforced by a stay of the proceedings or
by injunction absent any pending proceedings. The jurisdiction to stay,
although introduced by statute in the field of arbitration agreement, is
in origin an equitable remedy."
The court further held as follows:
"The following principles can be derived from the above authorities as
applicable where a party seeks to enforce an alternative dispute
resolution provision by means of an order staying proceedings:

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 • i) The agreement must create an enforceable obligation
requiring the parties to engage in alternative dispute
resolution.
• ii) The obligation must be expressed clearly as a condition
precedent to court proceedings or arbitration.
• iii) The dispute resolution process to be followed does not
have to be formal but must be sufficiently clear and certain by
reference to objective criteria, including machinery to appoint a
mediator or determine any other necessary step in the
procedure without the requirement for any further agreement
by the parties.
• iv) The court has a discretion to stay proceedings
commenced in breach of an enforceable dispute resolution
agreement. In exercising its discretion, the Court will have
regard to the public policy interest in upholding the parties'
commercial agreement and furthering the overriding objective
in assisting the parties to resolve their disputes."
31. Usually the proceedings in court are halted when the parties are referred to the
Court annexed Mediation Centre. Such a procedure facilitates the mediation process.
32. A reading of the orders dated 28.08.2018 and 24.09.2018 does not by the conduct
of the parties show that the summons can be deemed to be served on the defendant or
and that defendant knew that he had to answer the claim. This is especially so as on
24.09.2018 by the consent of parties they were referred to the Delhi High Court
Mediation and Conciliation Centre. They had to appear before the Court annexed
Mediation Centre on 4.10.2018. In terms of Rule 18 of the Delhi High Court Mediation
and Conciliation Rules framed under section 89 of CPC mediation was to stand
terminated on or around 4.1.2019. It appears that by consent of parties mediation
process was terminated on 20.11.2018. It is only thereafter that the defendant can be
said to be deemed to have been served with summons as he knew that now he had to
answer the claim in terms of prescribed procedure.
33. In the above facts, I hold that the defendant can be deemed to have served with
summons on 28.11.2018 or thereabouts.
34. The proviso to Order 8 Rule 1 CPC provides that where a defendant has failed to file
a written statement within the period of 30 days he shall be allowed to file written
statement on such other date for reasons to be recorded in writing but not later than
120 days from the date of service of summons.
35. I have already noted above that in my opinion, the summons can be said to have
been served on the defendant, the defendant has waived his right of service of
summons on or around 28.11.2018. However, the written statement has been filed on
06.03.2019 i.e. within the outer limitation prescribed by the proviso to Order 8 rule 1
CPC as applicable to the commercial suits. However, a delay beyond the period of 30
days in filing written statement from the date of the service of the summons can only be
condoned for reasons to be recorded in writing and on payment of such cost as the
court may deem fit.
3 6 . As already noted above, the facts of the case show that the defendant was

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justifiably believing that summons had not been served/defendant had not been called
upon to file its written statement. Further, the parties were before the mediation centre
trying to settle the matter through an alternative dispute resolution mechanism. These
background facts, in my opinion would constitute sufficient cause to explain the delay
on the part of the defendant in filing the written statement.
37. I accordingly order that the written statement be taken on record subject to cost of
Rs. 30,000/- payable within three weeks. Objections of the plaintiff are rejected.
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