Commercial litigation punishes inattention. In FAO (COMM) 268/2026, decided on 16 October 2026, a Division Bench of the Delhi High Court (Justice Anil Kshetarpal and Justice Bharat Parashar) dismissed an appeal under Section 13 of the Commercial Courts Act, 2015 against a Commercial Court order which had refused to set aside an ex parte decree of Rs 23 lakh. The suit arose from an advance paid for 6,000 boxes of nitrile gloves that were never delivered, followed by a cheque that bounced. The defendants were served in August 2023, their counsel appeared once in September 2023 without filing a vakalatnama or written statement, and nothing more was heard from them until long after the decree. The Bench held that the engagement of counsel does not absolve a party of the duty to pursue the proceedings with reasonable diligence.
The underlying suit
During the pandemic, the respondent — a trailer-parts importer that had diversified into PPE supplies — ordered 6,000 boxes of nitrile gloves from the first appellant, paying about Rs 23.78 lakh in advance against a contract value of roughly Rs 23.99 lakh. No gloves were delivered. The second appellant issued a cheque of Rs 23 lakh, which was dishonoured for insufficient funds. The buyer invoked pre-institution mediation under Section 12A of the Commercial Courts Act and then sued in the Commercial Court as CS (Comm.) No. 01/2022.
The procedural timeline that decided the appeal
| Date | Event |
|---|---|
| 18 August 2023 | Summons served on the defendants |
| 14 September 2023 | Counsel appears for the defendants — no vakalatnama, no written statement filed |
| 22 February 2024 | Defendants proceeded against ex parte |
| 9 August 2024 | Ex parte decree: Rs 23 lakh with 7% interest and Rs 30,000 costs |
| 21 September 2025 | Defendants claim they first learnt of the decree |
| 5 February 2026 | First Order IX Rule 13 application filed — later withdrawn |
| 18 May 2026 | Fresh application filed with a Section 5 Limitation Act application (203 days' delay) |
| 9 July 2026 | Commercial Court dismisses both applications as time-barred and without sufficient cause |
The Division Bench affirmed. Since summons had been duly served, limitation ran from the date of the decree. The explanation offered for the period after the defendants admittedly learnt of the decree was itself unsatisfactory — an initial application filed, withdrawn, and renewed months later. And on sufficient cause for the original absence, the Bench applied the classical test: whether the defendant honestly and sincerely intended to remain present. Engaging a lawyer once, filing nothing, and making no documented enquiries for years did not meet it.
Why commercial courts are stricter
The Commercial Courts Act, 2015 was built to compress timelines: a 120-day outer limit for written statements, case management hearings, summary judgment, and costs that follow the event. The second proviso to Order IX Rule 13, which bars setting aside a decree merely for an irregularity in service where the defendant had notice of the hearing, and the discipline of Section 13 appeals, serve the same end. A defendant in a commercial suit who ignores served summons is not merely risking an adverse decree; it is choosing one. The window to undo that choice is narrow, measured from the decree, and guarded by a sufficient-cause standard that courts apply with commercial rigour.
Takeaways for businesses
Treat service of summons in any commercial suit as a board-level event: diarise the 30-day (extendable to 120-day) written statement deadline immediately.
Engagement of counsel is the beginning of diligence, not the end — obtain the filed vakalatnama, order copies, and written status updates, and preserve that correspondence.
If an ex parte order slips through, move under Order IX Rule 13 at once; limitation runs from the decree where service is established, and every week of further delay needs its own explanation.
Where a settlement or supply dispute underlies the claim, respond to the Section 12A pre-institution mediation notice — it is the cheapest forum the statute offers.
For decree-holders, the judgment is equally useful: proof of due service is the foundation on which an ex parte decree becomes execution-proof. Process fee records, tracking receipts and the order recording service are worth preserving through execution.
This article summarises a Delhi High Court Division Bench judgment for general information. Whether sufficient cause exists in a given case is intensely fact-dependent, and nothing here is legal advice.
Frequently Asked Questions
What is the route for setting aside an ex parte decree in a commercial suit?
An application under Order IX Rule 13 CPC before the court that passed the decree, showing either that summons was not duly served or that the applicant was prevented by sufficient cause from appearing. If the application fails, an appeal lies — in commercial matters, under Section 13 of the Commercial Courts Act read with Order XLIII Rule 1(d) CPC.
From when does limitation run for such an application?
Where summons was duly served, limitation under Article 123 of the Limitation Act runs from the date of the decree, not from the date the defendant claims to have learnt of it. In this case service in August 2023 was established, so the clock ran from the decree of 9 August 2024, and the application filed in 2026 was hopelessly late.
Can counsel's default be "sufficient cause"?
Only when the party itself acted diligently. The Bench applied the settled test — whether the defendant honestly and sincerely intended to remain present — and found no particulars of any enquiries the appellants made with their counsel over the years. A later complaint to the Bar Council did not explain the earlier absence.
What about a bereavement or personal hardship?
Genuine hardship explains specific dates, not years of silence. The Bench noted that the bereavement relied on did not account for the non-appearance on the hearing dates that mattered, including dates months before and after it.