Bombay High Court

Chitranjan Baid vs Reliance Financial Limited on 25 April, 2023

Bench: K.R. Shriram, Rajesh S. Patil

          Digitally signed
 2023:BHC-OS:3471-DB
          by GAURI
GAURI   AMIT                                            1/14                   4&5.IA(L)-9790-2023.doc
AMIT    GAEKWAD
GAEKWAD Date:
        2023.04.26
            13:01:15 +0530        IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                      ORDINARY ORIGINAL CIVIL JURISDICTION
                                          IN ITS COMMERCIAL DIVISION
                                   (4) INTERIM APPLICATION (L) NO.9790 OF 2023
                                                       IN
                                     COMMERCIAL APPEAL (L) NO.9089 OF 2023
                Chitranjan Baid                                .....Applicant
                          Vs.
                Reliance Financial Limited              .....Respondent
                                                      WITH
                                     INTERIM APPLICATION (L) NO.9937 OF 2023
                                                       IN
                                     COMMERCIAL APPEAL (L) NO.9089 OF 2023
                                                      AND
                                   (5) INTERIM APPLICATION (L) NO.9793 OF 2023
                                                       IN
                                     COMMERCIAL APPEAL (L) NO.9428 OF 2023
                Monika Baid                                    .....Applicant
                          Vs.
                Reliance Financial Limited            .....Respondent
                                                    WITH
                                INTERIM APPLICATION (L) NO.9927 OF 2023
                                                     IN
                                 COMMERCIAL APPEAL (L) NO.9428 OF 2023
                                                     ----
                Mr. L.K. Giri i/b. Ms. Priyanka Lokhande for applicant/appellant.
                Mr. Pesi Modi, Senior Advocate a/w. Mr. Rohan Sathaye and Ms. Kalpana
                Desai i/b. Res Legal for respondent in IAL/9790/2023 in
                COMAPL/9089/2023.
                Mr. Rohan Sathaye i/b. Reg Legal for respondent in IAL/9793/2023 in
                COMAPL/9428/2023.
                                                     ----
                                                      CORAM : K. R. SHRIRAM &
                                                                RAJESH S. PATIL, JJ.

DATED : 25th APRIL 2023

P.C. :

1 Interim Application (Lodging) No.9793 of 2023 and Interim

Application (Lodging) No.9790 of 2023 are delay condonation applications.


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2                The obligation is on the party applying for condonation of

delay to show sufficient cause. Sufficient cause is the cause for which

applicant could not be blamed for his or her absence. The meaning of the

word sufficient is adequate or enough, inasmuch as may be necessary to

answer the purpose intended. Sufficient cause would also mean that the

party should not have acted in a negligent manner or there was a want of

bonafide on its part in view of the facts and circumstances of a case or it

cannot be alleged that the party has "not acted diligently" or "remained

inactive". The onus is on applicant to satisfy the Court that he was

prevented by any "sufficient cause" from prosecuting his case, and unless a

satisfactory explanation is furnished, the Court should not allow the

application for condonation of delay. The Court has to examine whether the

mistake is bonafide or was merely a device to cover an ulterior purpose. It is

settled law that no Court could be justified in condoning the delay by

imposing any condition whatsoever. The application is to be decided only

within the parameters laid down by the Court and if there is no sufficient

cause to prevent a litigant to approach the Court on time condoning the

delay without any justification, it amounts to passing an order in violation

of the statutory provisions and tantamounts to showing utter disregard to

the legislature.

3 In Government of Maharashtra (Water Resources Department)

represented by Executive Engineer V/s. M/s. Borse Brothers Engineers and

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Contractors Pvt. Ltd.1, the Apex Court has held that for the object of speedy

disposal sought to be achieved under the provisions of the Arbitration and

Conciliation Act, 1996 (the Act) for appeals filed under Section 37 of the

Act, the delay is to be condoned by way of exception and not by way of

rule. In a fit case in which a party has otherwise acted bonafide and not in a

negligent manner, a short delay beyond such period can, in the discretion of

the Court, be condoned, always bearing in mind that the other side of the

picture is that the opposite party may have acquired both in equity and

justice, what may now be lost by the first party's inaction, negligence or

laches. Paragraphs 56 to 63 of the said judgment read as under :

56. The expression "sufficient cause" contained in section 5 of the Limitation Act is elastic enough to yield different results depending upon the object and context of a statute. Thus, in Ajmer Kaur v. State of Punjab, (2004) 7 SCC 381, this Court, in the context of section 11(5) of the Punjab Land Reforms Act, 1972, held as follows :

10. Permitting an application under Section 11(5) to be moved at any time would have disastrous consequences. The State Government in which the land vests on being declared as surplus, will not be able to utilise the same. The State Government cannot be made to wait indefinitely before putting the land to use. Where the land is utilised by the State Government, a consequence of the order passed subsequently could be of divesting it of the land. Taking the facts of the present case by way of an illustration, it would mean that the land which stood mutated in the State Government in 1982 and which was allotted by the State Government to third parties in 1983, would as a result of reopening the settled position, lead to third parties being asked to restore back the land to the State Government and the State Government in turn would have to be divested of the land. The land will in turn be restored to the landowner. This will be the result

1. 2021 (6) SCC 460

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of the land being declared by the Collector as not surplus with the landowner. The effect of permitting such a situation will be that the land will remain in a situation of flux. There will be no finality. The very purpose of the legislation will be defeated. The allottee will not be able to utilise the land for fear of being divested in the event of deaths and births in the family of the landowners. Deaths and births are events which are bound to occur. Therefore, it is reasonable to read a time-limit in sub-section (5) of Section 11. The concept of reasonable time in the given facts would be most appropriate. An application must be moved within a reasonable time. The facts of the present case demonstrate that redetermination under sub-section (5) of Section 11 almost 5 years after the death of Kartar Kaur and more than 6 years after the order of the Collector declaring the land as surplus had become final, has resulted in grave injustice besides defeating the object of the legislation which was envisaged as a socially beneficial piece of legislation. Thus we hold that the application for redetermination filed by Daya Singh under sub-section (5) of Section 11 of the Act on 21-6- 1985 was liable to be dismissed on the ground of inordinate delay and the Collector was wrong in reopening the issue declaring the land as not surplus in the hands of Daya Singh and Kartar Kaur.

11. The above reasoning is in consonance with the provision in sub-section (7) of Section 11 of the Act. Sub- section (7) uses the words "where succession has opened after the surplus area or any part thereof has been determined by the Collector ...". The words "determined by the Collector" would mean that the order of the Collector has attained finality. The provisions regarding appeals, etc. contained in Sections 80- 82 of the Punjab Tenancy Act, 1887, as made applicable to proceedings under the Punjab Land Reforms Act, 1972, show that the maximum period of limitation in case of appeal or review is ninety days. The appeal against the final order of the Collector dated 30-9- 1976 whereby 3.12 hectares of land had been declared as surplus was dismissed on 27-3-1979. The order was allowed to become final as it was not challenged any further. Thus the determination by the Collector became final on 27-3-1979. The same could not be reopened after a lapse of more than 6 years by order dated 23-7-1985. The subsequent

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proceedings before the Revenue Authorities did not lie. The order dated 23-7-1985 is non est. All the subsequent proceedings therefore fall through. The issue could not have been reopened.

57. Nearer home, in Brahampal v. National Insurance Company, 2020 SCC OnLine SC 1053, this Court specifically referred to the difference between a delay in filing commercial claims under the Arbitration Act or the Commercial Courts Act and claims under the Motor Vehicles Act, 1988, as follows :

"14. This Court has firstly held that purpose of conferment of such power must be examined for the determination of the scope of such discretion conferred upon the court. [refer to Bhaiya Punjalal Bhagwandin v. Dave Bhagwatprasad Prabhuprasad, AIR 1963 SC 120; Shri Prakash Chand Agarwal v. Hindustan Steel Ltd., (1970) 2 SCC 806]. Our analysis of the purpose of the Act suggests that such discretionary power is conferred upon the Courts, to enforce the rights of the victims and their dependents. The legislature intended that Courts must have such power so as to ensure that substantive justice is not trumped by technicalities.

xxxxxxxxxxxxxxxxxxx

20. Therefore, the aforesaid provision being a beneficial legislation, must be given liberal interpretation to serve its object. Keeping in view the substantive rights of the parties, undue emphasis should not be given to technicalities. In such cases delay in filing and refiling cannot be viewed strictly, as compared to commercial claims under the Arbitration and Concilliation Act, 1996 or the Commercial Courts Act, 2015.

21. In P. Radha Bai v. P. Ashok Kumar, (2019) 13 SCC 445, wherein this Court while interpreting Section 34 of the Arbitration Act, held that the right to object to an award itself is substantively bound with the limitation period prescribed therein and the same cannot merely a procedural prescription. In effect the Court held that a complete petition, has to be filed within the time prescribed under Section 34 of the Arbitration Act and 'not thereafter'. The Court while coming to the aforesaid conclusion, reasoned as under : "36.1. First, the purpose of the Arbitration Act was to provide for a speedy dispute resolution process. The Statement of Objects and Reasons reveal that the legislative intent of enacting the Arbitration

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Act was to provide parties with an efficient alternative dispute resolution system which gives litigants an expedited resolution of disputes while reducing the burden on the courts. Article 34(3) reflects this intent when it defines the commencement and concluding period for challenging an award. This Court in Popular Construction case [Union of India v. Popular Construction Co., (2001) 8 SCC 470] highlighted the importance of the fixed periods under the Arbitration Act. We may also add that the finality is a fundamental principle enshrined under the Arbitration Act and a definitive time-limit for challenging an award is necessary for ensuring finality. If Section 17 were to be applied, an award can be challenged even after 120 days. This would defeat the Arbitration Act's objective of speedy resolution of disputes. The finality of award would also be in a limbo as a party can challenge an award even after the 120 day period."

Coming back to the Motor Vehicles Act, the legislative intent is to provide appropriate compensation for the victims and to protect their substantive rights, in pursuit of the same, the interpretation should not be as strict as commercial claims as elucidated above.

22. Undoubtedly, the statute has granted the Courts with discretionary powers to condone the delay, however at the same time it also places an obligation upon the party to justify that he was prevented from abiding by the same due to the existence of "sufficient cause". Although there exists no strait jacket formula for the Courts to condone delay, but the Courts must not only take into consideration the entire facts and circumstances of case but also the conduct of the parties. The concept of reasonableness dictates that, the Courts even while taking a liberal approach must weigh in the rights and obligations of both the parties. When a right has accrued in favour of one party due to gross negligence and lackadaisical attitude of the other, this Court shall refrain from exercising the aforesaid discretionary relief.

23. Taking into consideration the facts and circumstances of the present case, we are of the opinion that the delay of 45 days has been

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properly explained by the appellants, which was on account of illness of the wife of Appellant No.1. It was not appropriate on the part of the High Court to dismiss the appeal merely on the ground of delay of short duration, particularly in matters involving death in motor accident claims. Moreover, in the present case no mala fide can be imputable against the appellants for filing the appeal after the expiry of ninety days. Therefore, we are of the opinion that the strict approach taken in the impugned order is hyper-technical and cannot be sustained in the eyes of law."

58. Given the object sought to be achieved under both the Arbitration Act and the Commercial Courts Act, that is, the speedy resolution of disputes, the expression "sufficient cause" is not elastic enough to cover long delays beyond the period provided by the appeal provision itself. Besides, the expression "sufficient cause" is not itself a loose panacea for the ill of pressing negligent and stale claims. This Court, in Basawaraj v. Land Acquisition Officer, has held :

"9. Sufficient cause is the cause for which the defendant could not be blamed for his absence. The meaning of the word "sufficient" is "adequate" or "enough", inasmuch as may be necessary to answer the purpose intended. Therefore, the word "sufficient" embraces no more than that which provides a platitude, which when the act done suffices to accomplish the purpose intended in the facts and circumstances existing in a case, duly examined from the viewpoint of a reasonable standard of a cautious man. In this context, "sufficient cause" means that the party should not have acted in a negligent manner or there was a want of bona fide on its part in view of the facts and circumstances of a case or it cannot be alleged that the party has "not acted diligently" or "remained inactive". However, the facts and circumstances of each case must afford sufficient ground to enable the court concerned to exercise discretion for the reason that whenever the court exercises discretion, it has to be exercised judiciously. The applicant must satisfy the court that he was prevented by any "sufficient cause" from prosecuting his case, and unless a satisfactory explanation is furnished, the court should not allow the application for condonation of delay. The court has to examine whether the mistake is bona fide or was merely a device to cover an ulterior purpose. (See Manindra Land and Building Corpn. Ltd. v. Bhutnath Banerjee, Mata Din v. A. Narayanan,

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Parimal v. Veena and Maniben Devraj Shah v. Municipal Corpn. of Brihan Mumbai.

10. In Arjun Singh v. Mohindra Kumar [AIR 1964 SC 993] this Court explained the difference between a "good cause" and a "sufficient cause" and observed that every "sufficient cause" is a good cause and vice versa. However, if any difference exists it can only be that the requirement of good cause is complied with on a lesser degree of proof than that of "sufficient cause".

11. The expression "sufficient cause" should be given a liberal interpretation to ensure that substantial justice is done, but only so long as negligence, inaction or lack of bona fides cannot be imputed to the party concerned, whether or not sufficient cause has been furnished, can be decided on the facts of a particular case and no straitjacket formula is possible. (Vide Madanlal v. Shyamlal [(2002) 1 SCC 535 : AIR 2002 SC 100] and Ram Nath Sao v. Gobardhan Sao [(2002) 3 SCC 195 : AIR 2002 SC 1201] .)

12. It is a settled legal proposition that law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes. The court has no power to extend the period of limitation on equitable grounds. "A result flowing from a statutory provision is never an evil. A court has no power to ignore that provision to relieve what it considers a distress resulting from its operation." The statutory provision may cause hardship or inconvenience to a particular party but the court has no choice but to enforce it giving full effect to the same. The legal maxim dura lex sed lex which means "the law is hard but it is the law", stands attracted in such a situation. It has consistently been held that, "inconvenience is not" a decisive factor to be considered while interpreting a statute.

13. The statute of limitation is founded on public policy, its aim being to secure peace in the community, to suppress fraud and perjury, to quicken diligence and to prevent oppression. It seeks to bury all acts of the past which have not been agitated unexplainably and have from lapse of time become stale. According to Halsbury's Laws of England, Vol. 28, p. 266 :

"605. Policy of the Limitation Acts.--The courts have expressed at least three

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differing reasons supporting the existence of statutes of limitations namely, (1) that long dormant claims have more of cruelty than justice in them, (2) that a defendant might have lost the evidence to disprove a stale claim, and (3) that persons with good causes of actions should pursue them with reasonable diligence."

An unlimited limitation would lead to a sense of insecurity and uncertainty, and therefore, limitation prevents disturbance or deprivation of what may have been acquired in equity and justice by long enjoyment or what may have been lost by a party's own inaction, negligence or laches. (See Popat and Kotecha Property v. SBI Staff Assn., Rajender Singh v. Santa Singh and Pundlik Jalam Patil v. Jalgaon Medium Project.

14. In P. Ramachandra Rao v. State of Karnataka this Court held that judicially engrafting principles of limitation amounts to legislating and would fly in the face of law laid down by the Constitution Bench in Abdul Rehman Antulay v. R.S. Nayak.

15. The law on the issue can be summarised to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the "sufficient cause" which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bona fide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only within the parameters laid down by this Court in regard to the condonation of delay. In case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamounts to showing utter disregard to the legislature.

59. Likewise, merely because the government is involved, a different yardstick for condonation of delay cannot be laid down. This was felicitously stated in Postmaster General v. Living Media India Ltd. ["Postmaster General"], as follows :


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"27. It is not in dispute that the person(s) concerned were well aware or conversant with the issues involved including the prescribed period of limitation for taking up the matter by way of filing a special leave petition in this Court. They cannot claim that they have a separate period of limitation when the Department was possessed with competent persons familiar with court proceedings. In the absence of plausible and acceptable explanation, we are posing a question why the delay is to be condoned mechanically merely because the Government or a wing of the Government is a party before us.

28. Though we are conscious of the fact that in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bona fides, a liberal concession has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances, the Department cannot take advantage of various earlier decisions. The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation undoubtedly binds everybody, including the Government.

29. In our view, it is the right time to inform all the government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bona fide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural red tape in the process. The government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for the government departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few."

60. The decision in Postmaster General (supra) has been followed in the following subsequent judgments of this Court :

i) State of Rajasthan v. Bal Kishan Mathur at paragraphs 8-8.2;

ii) State of U.P. v. Amar Nath Yadav at paragraphs 2-3;


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iii) State of T.N. v. N. Suresh Rajan at paragraphs 11-13; and

iv) State of M.P. v. Bherulal at paragraphs 3-4.

61. In a recent judgment, namely, State of M.P. v. Chaitram Maywade, this Court referred to Postmaster General (supra), and held as follows : "1. The State of Madhya Pradesh continues to do the same thing again and again and the conduct seems to be incorrigible. The special leave petition has been filed after a delay of 588 days. We had an occasion to deal with such inordinately delayed filing of the appeal by the State of Madhya Pradesh in State of M.P. v. Bherulal in terms of our order dated 15-10-2020.

2. We have penned down a detailed order in that case and we see no purpose in repeating the same reasoning again except to record what are stated to be the facts on which the delay is sought to be condoned. On 5-1-2019, it is stated that the Government Advocate was approached in respect of the judgment delivered on 13-11-2018 and the Law Department permitted filing of the SLP against the impugned order on 26-5-2020. Thus, the Law Department took almost about 17 months' time to decide whether the SLP had to be filed or not. What greater certificate of incompetence would there be for the Legal Department!

3. We consider it appropriate to direct the Chief Secretary of the State of Madhya Pradesh to look into the aspect of revamping the Legal Department as it appears that the Department is unable to file appeals within any reasonable period of time much less within limitation. These kinds of excuses, as already recorded in the aforesaid order, are no more admissible in view of the judgment in Postmaster General v. Living Media (India) Ltd.

4. We have also expressed our concern that these kinds of the cases are only "certificate cases" to obtain a certificate of dismissal from the Supreme Court to put a quietus to the issue. The object is to save the skin of officers who may be in default. We have also recorded the irony of the situation where no action is taken against the officers who sit on these files and do nothing.

5. Looking to the period of delay and the casual manner in which the application has been worded, the wastage of judicial time involved, we

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impose costs on the petitioner State of Rs 35,000 to be deposited with the Mediation and Conciliation Project Committee. The amount be deposited within four weeks. The amount be recovered from the officer(s) responsible for the delay in filing and sitting on the files and certificate of recovery of the said amount be also filed in this Court within the said period of time. We have put to Deputy Advocate General to caution that for any successive matters of this kind the costs will keep on going up.

62. Also, it must be remembered that merely because sufficient cause has been made out in the facts of a given case, there is no right in the appellant to have delay condoned. This was felicitously put in Ramlal v. Rewa Coalfields Ltd. as follows :

12. It is, however, necessary to emphasise that even after sufficient cause has been shown a party is not entitled to the condonation of delay in question as a matter of right. The proof of a sufficient cause is a condition precedent for the exercise of the discretionary jurisdiction vested in the court by s. 5. If sufficient cause is not proved nothing further has to be done; the application for condoning delay has to be dismissed on that ground alone. If sufficient cause is shown then the Court has to enquire whether in its discretion it should condone the delay. This aspect of the matter naturally introduces the consideration of all relevant facts and it is at this stage that diligence of the party or its bona fides may fall for consideration; but the scope of the enquiry while exercising the discretionary power after sufficient cause is shown would naturally be limited only to such facts as the Court may regard as relevant. It cannot justify an enquiry as to why the party was sitting idle during all the time available to it. In this connection we may point out that considerations of bona fides or due diligence are always material and relevant when the Court is dealing with applications made under s. 14 of the Limitation Act. In dealing with such applications the Court is called upon to consider the effect of the combined provisions of ss. 5 and 14. Therefore, in our opinion, considerations which have been expressly made material and relevant by the provisions of s. 14 cannot to the same extent and in the same manner be invoked in dealing with applications which fall to be decided only under s. 5 without reference to s. 14.



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63. Given the aforesaid and the object of speedy disposal sought to be achieved both under the Arbitration Act and the Commercial Courts Act, for appeals filed under section 37 of the Arbitration Act that are governed by Articles 116 and 117 of the Limitation Act or section 13(1A) of the Commercial Courts Act, a delay beyond 90 days, 30 days or 60 days, respectively, is to be condoned by way of exception and not by way of rule. In a fit case in which a party has otherwise acted bona fide and not in a negligent manner, a short delay beyond such period can, in the discretion of the court, be condoned, always bearing in mind that the other side of the picture is that the opposite party may have acquired both in equity and justice, what may now be lost by the first party's inaction, negligence or laches.

4 Has applicant shown any sufficient cause or has applicant acted

not in a negligent manner is something we have to decide by considering

the application. In the application, it is stated that on 7 th January 2023 the

impugned order was passed and the certified copy was applied on

30th January 2023 and delivered on 1 st February 2023. No explanation is

given for this delay of about 23 days. In paragraph 5, it is simply stated

"However, in spite of Applicant/Appellant's advocate best and sincere

efforts, the scrutiny and other connected process could not be completed

earlier, the appellant is apologetic for this delay. On merits, the appellant

has got a very good case........ " It is also stated that the delay is not

deliberate nor intentional. Beyond this, there is no explanation whatsoever

to explain why the delay should be condoned.