Non-payment of cost - Written Statement can be taken off the record if cost is not paid

Delhi High Court Upholds Strict Adherence to Timelines in Commercial Disputes High Court dismisses petition, enforcing consequences for non-payment of costs in commercial suits.

In a significant ruling, the Delhi High Court has reiterated the importance of adhering to procedural timelines in commercial disputes, underscoring the consequences of non-payment of costs in such cases. The court dismissed the petition filed by M/s Om Fire Safety Company Pvt Ltd, who challenged an order from the commercial court that took their Written Statement off the record due to non-payment of costs.

The petitioner had sought to challenge the decision dated October 17, 2025, where the commercial court had removed their Written Statement from the record, citing non-payment of costs ordered by the court. The Written Statement was initially accepted, subject to the payment of costs. However, the petitioner failed to comply with this order, prompting the court to enforce strict measures.

Justice Girish Kathpalia, presiding over the case, highlighted that the petitioner’s explanation for non-payment was flimsy and unacceptable. The court noted that the petitioner's counsel did not make any effort to clarify doubts regarding the payment across the period from August 7, 2025, to October 17, 2025. The judgment emphasized that costs are to be paid to the opposing party that suffers due to adjournments caused by defaults.

The court referred to the Supreme Court's judgment in "Manohar Singh v. D.S. Sharma," which outlines the consequences under Section 35B of the Civil Procedure Code, 1908, for non-payment of costs. The ruling stated that non-payment results in prohibiting the defaulting party from participating in further proceedings. 

Furthermore, the High Court emphasized the philosophy behind the Commercial Courts Act, 2015, which aims to expedite commercial disputes. The court warned against any interpretation that could dilute this purpose, noting that a casual approach towards the processes of commercial courts is impermissible.

In this case, the petitioner's defense, claiming that the supplied goods were defective, was not supported by any prior notice to the respondent, weakening their position. The court concluded that no injustice was done in the trial court's decision to remove the Written Statement and dismissed the petition under Article 227 of the Constitution of India, along with accompanying applications.

The judgment serves as a reminder of the judiciary's commitment to uphold the integrity and efficiency of commercial litigation, ensuring that litigants adhere strictly to procedural requirements.

Statutory provision(s): Civil Procedure Code, 1908 Section 35B, Commercial Courts Act, 2015, Article 227 of Constitution of India

M/s Om Fire Safety Company Pvt Ltd v. Umakant, (Delhi) : Law Finder Doc Id # 2812532