COVID clock pause also froze the 120-day deadline for filing defence

The defendants missed the 120-day deadline to file their defence. They blamed COVID. The High Court said — sorry, that deadline is set in stone. The Supreme Court just disagreed.

Nine defendants in Calcutta had thirty days to file their written statements — their formal defence to a money recovery suit. That clock started ticking in February 2020. By March 8, the thirty days were up. The extended outer limit of 120 days — the absolute last chance to file — expired on June 6, 2020. By then, India was in lockdown. Courtrooms were sealed. The Calcutta High Court registry sat silent, its corridors empty, a stack of unfiled papers gathering dust on a lawyer’s desk. The defendants didn’t file.

In January 2021, they finally applied to submit their defence, pointing to the Supreme Court’s suo motu — on its own motion — orders that had frozen limitation periods during the pandemic. The Calcutta High Court turned them down. The High Court held that the Supreme Court’s orders only extended the period of limitation — the time allowed to file something — not the outer limit within which courts could condone delay, the maximum time a court could excuse a late filing. The defendants appealed. The Supreme Court just reversed that decision — and in doing so, clarified exactly how far its pandemic clock-pause orders reached.

When the 120-day wall appeared

IL and FS Financial Services Limited filed a money recovery suit against nine defendants in the Calcutta High Court in August 2019. The suit was registered as C.S. No. 177 of 2019. Summons were served in February 2020. Under Order 8 Rule 1 of the Code of Civil Procedure, as amended by Section 16 of the Commercial Courts Act, 2015, defendants in commercial suits must file their written statements within thirty days of service. The court can extend this period — but only up to a maximum of 120 days from the date of service. After that, the defence is locked out. The door closes.

That 120-day outer limit expired on June 6, 2020. By then, the pandemic had shut down the country. The silence of the lockdown hung over the High Court registry, where no papers moved. The defendants did not file. They later argued that the Supreme Court’s suo motu orders in In Re: Cognizance for Extension of Limitation — SMWP No. 3 of 2020 — which had extended all limitation periods from March 15, 2020 onward, should cover their situation. The High Court disagreed.

Why the High Court said no

The Calcutta High Court relied on an earlier Supreme Court judgment: Sagufa Ahmed & Ors. v. Upper Assam Plywood Products Pvt. Ltd. & Ors. — (2021) 2 SCC 317. In that case, the Supreme Court had held that the suo motu orders only extended the period of limitation — the time within which a party must first file something. They did not extend the outer limit within which a court could condone a delay. The High Court reasoned that the 120-day deadline under the Commercial Courts Act was exactly that kind of outer limit — a hard stop that even the court could not push past. Since the 120 days had expired before the suo motu orders kicked in on March 15, 2020, the defendants were out of time.

The defendants appealed to the Supreme Court.

The order that changed everything

Between the High Court’s decision and the Supreme Court’s hearing, something crucial happened. On March 8, 2021 — and again on April 27 and September 23, 2021 — the Supreme Court passed further orders in the same suo motu proceedings. These orders explicitly stated that the COVID period would be excluded not just for computing limitation periods, but also for computing “the outer limits within which the court or tribunal can condone delay.” That single phrase changed the legal landscape.

The Supreme Court in Aditya Khaitan held that these subsequent orders had taken away the basis of Sagufa Ahmed. The earlier judgment had said only limitation was extended. The later orders said: no — the outer limits for condonation of delay are also covered.

The bench — Justice J.K. Maheshwari and Justice K.V. Viswanathan — followed its own earlier decision in Prakash Corporates v. Dee Vee Projects Limited — (2022) 5 SCC 112 — which had already applied this principle. The court held that the 120-day outer limit under Order 8 Rule 1 CPC, as amended by the Commercial Courts Act, is precisely the kind of “outer limit within which the court or tribunal can condone delay” that the March 8, 2021 order covered. The COVID period had to be excluded.

What the court actually decided

The Supreme Court’s ratio — its central reasoning — rests on three points. First, the March 8, 2021 order explicitly extended protection to outer limits for condonation of delay — not just limitation periods. Second, the 120-day deadline for filing written statements in commercial suits is such an outer limit. Third, even though these orders were passed after the Calcutta High Court’s decision, they enure to the benefit of parties whose matters are still pending — meaning the defendants could rely on them on appeal.

The court directed that the written statements filed on January 20, 2021 be taken on record. The suit will now proceed on its merits. The appeals were allowed with no order as to costs.

The procedural journey tells the full story. The suit was filed on August 30, 2019 at the Calcutta High Court. The applications for taking the written statements on record were dismissed on February 26, 2021. The Supreme Court allowed the appeals on October 3, 2023. In between, the Supreme Court passed a series of suo motu orders — on March 23, 2020, May 6, 2020, July 10, 2020, March 8, 2021, April 27, 2021, and September 23, 2021 — each expanding the protective umbrella for litigants caught by the pandemic.

The case — Aditya Khaitan & Ors. v. IL and FS Financial Services Limited — arose from a money recovery suit filed in August 2019. The summons were served in February 2020. The 30-day deadline expired on March 8, 2020, just before COVID-19 was declared a pandemic. The extended 120-day outer limit expired on June 6, 2020. The defendants did not file their written statements during this period, citing the pandemic and lockdowns. In January 2021, they applied to file their written statements, relying on the Supreme Court's suo motu COVID-19 limitation extension orders. The Calcutta High Court rejected their applications, holding that the limitation period had already expired before the Supreme Court's protective orders kicked in on March 15, 2020, and that these orders only extended 'limitation' not 'condonable periods.' The defendants appealed to the Supreme Court, which allowed the appeals, holding that subsequent orders of the Supreme Court — particularly the March 8, 2021 order — had expanded the protection to cover outer limits for condonation of delay, thus overcoming the basis of the earlier Sagufa Ahmed ruling relied upon by the High Court.

The legal framing of the dispute was precise. The appellants-defendants in a commercial suit challenged the Calcutta High Court's refusal to accept their written statements filed beyond the 120-day outer limit prescribed under Order 8 Rule 1 CPC, as amended by Section 16 of the Commercial Courts Act, 2015. The core issue was whether the Supreme Court's suo motu orders in In Re: Cognizance for Extension of Limitation — SMWP No. 3 of 2020 — extended only the period of limitation stricto sensu or also the outer limit within which delay could be condoned. The Supreme Court, following Prakash Corporates v. Dee Vee Projects — (2022) 5 SCC 112 — and relying on the March 8, 2021 order which explicitly excluded the COVID period for computing 'outer limits within which the court or tribunal can condone delay,' held that the basis of Sagufa Ahmed — (2021) 2 SCC 317 — had been taken away by the subsequent orders, and directed the written statements to be taken on record.

The provisions engaged in the case reveal the layers of law the court had to peel back. Order 8 Rule 1 of the Code of Civil Procedure, as amended by the Commercial Courts Act, was the primary interpretation target — the court had to decide what kind of deadline the 120-day outer limit really was. Section 16 of the Commercial Courts Act, 2015, provided the supporting definition the court applied. Article 142 of the Constitution of India served as the procedural vehicle through which the Supreme Court exercised its plenary power to do complete justice. Article 141 of the Constitution of India was the cross-reference — the court had to decide whether its own earlier judgment in Sagufa Ahmed still bound lower courts, or whether subsequent orders had effectively overruled it.

The ratio decidendi — the binding principle — of Aditya Khaitan rests on three firm pillars. First, the Supreme Court's orders in In Re: Cognizance for Extension of Limitation, particularly the order dated March 8, 2021 — reiterated on April 27, 2021 and September 23, 2021 — extend not only to 'the period of limitation' but also to the outer limits within which courts or tribunals can condone delay. The basis of Sagufa Ahmed — that only limitation period was extended and not the condonable period — has been taken away by these subsequent orders. Second, the 120-day outer limit prescribed under Order 8 Rule 1 CPC, as amended by the Commercial Courts Act, for filing written statements constitutes an 'outer limit within which the court or tribunal can condone delay' and therefore falls within the scope of the March 8, 2021 order in SMWP No. 3 of 2020, entitling exclusion of the COVID period. Third, the principle underlying the orders of March 8, 2021, April 27, 2021 and September 23, 2021 in SMWP No. 3 of 2020, even though passed subsequent to the impugned High Court order, enures to the benefit of parties whose matters are still pending.

The operative order of the Supreme Court was clear and direct. The appeals were allowed. The written statements filed on January 20, 2021 were directed to be taken on record. The suit was to be proceeded with thereafter. The appeals were allowed with no order as to costs. The case was disposed of on October 3, 2023, with the citation 2023 LiveLaw (SC) 845.

For practitioners, the takeaway is straightforward. The Supreme Court’s pandemic orders were broader than many courts initially understood. They did not merely freeze the clock for filing fresh cases or appeals. They also froze the clock for those hard deadlines that courts themselves cannot ordinarily extend — including the 120-day outer limit for filing written statements in commercial suits. Any party who missed a deadline during the COVID period and can show their matter is still pending should check whether the March 8, 2021 order applies to their situation.

THE PLAY: If you missed a statutory outer limit during the COVID period and your case is still alive, the Supreme Court’s March 8, 2021 order may let you file — even if a court previously said the deadline was absolute.

The door that seemed locked was never really closed.