In a ruling that reinforces the principle that procedural law should serve justice rather than obstruct it, the Supreme Court of India has allowed an appeal by M/s Anvita Auto Tech Works Pvt. Ltd., setting aside a recovery decree against it in a commercial dispute with M/s Aroush Motors. The judgment, delivered on October 8, 2025, remands the case to the trial court, directing it to permit the appellant to file its written statement upon payment of â‚ą1,00,000 in costs and to allow cross-examination of witnesses. The apex court invoked COVID-19 limitation extensions and upheld the right to cross-examine even without a timely written statement, criticizing the lower courts for undue procedural rigidity.
The dispute traces back to 2019 when Anvita (defendant No. 1) launched CFMOTO motorcycles in India and appointed Aroush Motors (plaintiff) as a provisional dealer in Bengaluru via a Letter of Intent dated September 3, 2019. Aroush invested heavily: â‚ą20 lakh as security deposit, â‚ą70 lakh for spare parts, software, equipment, and initial stock, plus â‚ą5 lakh additional to Anvita and â‚ą7.07 lakh to Conair Equipment Pvt. Ltd. (defendant No. 2) for service center setup.
Anvita supplied 19 BS-IV motorcycles, of which 8 were sold. However, the government’s ban on BS-IV vehicles from April 1, 2020, halted sales. Anvita promised upgrade kits to BS-VI standards but failed to deliver, stalling Aroush’s business. Aroush terminated the dealership on September 14, 2020, alleging breach, and filed Commercial Original Suit No. 372 of 2021 seeking â‚ą1.78 crore from Anvita and â‚ą7.07 lakh from Conair, both with 18% interest.
The trial court (Additional City Civil & Sessions Judge, Exclusive Commercial Court) rejected Anvita’s delayed written statement (filed January 7, 2022, beyond the 120-day limit) and marked cross-examination of the plaintiff’s witness as “Nil” on August 19, 2022. It partly decreed the suit on November 15, 2022, awarding â‚ą1.78 crore against Anvita and â‚ą7.07 lakh against Conair, both with 9% future interest.
The Karnataka High Court dismissed Anvita’s appeal (Commercial Appeal No. 19 of 2023) on May 20, 2025, holding that non-filing of the written statement forfeited the right to cross-examine.
The Supreme Court, in a bench comprising Justices Aravind Kumar and N.V. Anjaria, allowed the appeal from SLP (Civil) No. 21917 of 2025. Citing its orders in In Re: Cognizance for Extension of Limitation (2022), the court excluded the COVID-19 period (March 15, 2020, to February 28, 2022) from limitation calculations, noting the written statement fell within this waived timeframe. It referenced precedents like Aditya Khaitan v. IL & FS Financial Services (2023), Babasaheb Raosaheb Kobarne v. Pyrotek India (2022), and Prakash Corporates v. Dee Vee Projects (2022) to affirm that commercial courts could not reject delayed filings rigidly during the pandemic.
Further, invoking Ranjit Singh v. State of Uttarakhand (2024), the court held that even without a written statement, the right to cross-examine survives to test the plaintiff’s case. It criticized the trial court’s “perverse” reasoning and the High Court’s affirmation, emphasizing Justice V.R. Krishna Iyer’s words: “Procedural law is not to be a tyrant but a servant.”
The remand directs expeditious disposal within six months, prioritizing substantial justice.
This verdict is a reminder for commercial courts to balance efficiency with fairness, especially in post-pandemic recoveries, and may influence similar procedural disputes.
Case Details:
- Case Title: M/s Anvita Auto Tech Works Pvt. Ltd. vs. M/s Aroush Motors & Anr.
- Citation: 2025 INSC 1202
- Court: Supreme Court of India (Civil Appellate Jurisdiction)
- Appeal Number: Civil Appeal No. __ of 2025 (arising out of SLP (Civil) No. 21917 of 2025)
- Judges: Justice Aravind Kumar and Justice N.V. Anjaria
- Date of Judgment: October 8, 2025
- Key Issue: Whether non-filing of written statement forfeits the right to cross-examine in commercial suits; application of COVID-19 limitation extensions.
- Outcome: Appeal allowed; High Court judgment (dated May 20, 2025) and trial court decree (dated November 15, 2022) set aside; matter remanded with costs of â‚ą1,00,000.
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