Genuine Paints & Chemicals Co. vs Union Of India (Uoi)
1998 Latest Caselaw 368 Del

JUDGMENT

Lokeshwar Prasad, J.

1. The petitioner, named above, was awarded a contract by the respondent UOI on 6.8.1982 for the supply of 75,000 litres of plaint on terms and conditions incorporated in the Contract No. RGC-TP-6/RGC-803/PAOD/ RP/894 dated 6.8.1982. The contract in question contained an arbitration clause (Clause No. 24). Certain disputes and differences had arisen between the parties in connection with the above said contract and the petitioner filed an application (Suit No. 2447/88--Genuine Paints & Chemicals v. UOI) under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as 'the Act') with the prayer to direct the respondents to file the arbitration agreement in the Court and for reference of disputes for arbitration. The above said petition, filed by the petitioner, was allowed by this Court vide order dated 24.2.1989 passed in Suit No. 2447/88 entitled Genuine Paints & Chemicals v. UOI and it was directed that the arbitration agreement filed in the Court and the disputes arbitration agreement filed in the Court and the disputes raised by the parties be referred to the Arbitrator within two months.

2. In compliance with the above orders of this Court the respondents vide letter No. Lit. II/A(201)89 dated 21.4.1989 appointed the Arbitrator and referred the disputes and differences between the parties to him for purpose of adjudication.

3. The Arbitrator, so appointed, entered upon the reference and after completion of usual formalities made and published the Award dated the 30th March, 1993. The Award alongwith the proceedings has been filed by the Arbitrator in the Registry of this Court on 17.7.1993.

4. After the receipt of the Award alongwith the proceedings from the end of the Arbitrator it was directed vide order dated the 28th July, 1993 that a statutory notice be issued to the parties, directing them to file objections to the award, if any, within the prescribed time limit.

5. Notice of the filing of the Award on behalf of the petitioner, has been accepted by the learned Counsel for the petitioner in the Court on 2.5.1994 and the learned Counsel for the petitioner on that very day i.e. on 2.5.1994 made a statement on behalf of the petitioner that the petitioner had not to file any objections to the Award.

6. Notice of the filing of the Award stands duly served on the respondent UOI on 12.8.1993 and no objections on behalf of UOI have been filed within the statutory time limit. However the respondent UOI have filed objections (IA 2149/94) on 5.5.1994 i.e. after a delay of 231 days alongwith an application (IA 2150/94) under Section 15 of the Limitation Act, 1963 with a request that delay in filing the objections be condoned.

7. The first & foremost question which is to be decided is as to whether in the facts and circumstances of the case the delay in filing the objections, as prayed, deserves to be condoned or not? On the above point I have heard the learned Counsel for the parties and have also carefully gone through the documents/ material on record. Admittedly the statutory notice, directing the respondents to file objections to the award stands duly served on the respondents on 12.8.1993 and as such the objections should have been filed within 30 days. However, in the instant case the objections, on behalf of the respondents have been filed on 5.5.1994 i.e. with the delay of 231 days.

8. Sections of the Limitation Act, 1963 deals with the extension of the prescribed period in certain cases and the same reads as under:

"Extension of prescribed period in certain cases--Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period, if the appellant or the applicant satisfies the Court that he had sufficient cause for not preferring the appeal or making the application within such period.

Explanation--The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this action".

9. The only question requiring consideration for the decision of the present application is as to whether the applicant/respondent UOI has shown 'sufficient cause' within the meaning of Section 5 of the Limitation Act for not filing the objections on behalf of the respondent UOI within the prescribed time limit. What constitutes 'sufficient cause' cannot be laid down by hard and fast rules. In case New India Insurance Company Limited v. Smt. Shanti Mishra, the Supreme Court held that discretion given by Section 5 of the Act should not be defined or crystallized so as to convert a discretionary matter into a rigid rule of law. The expression 'sufficient cause' should receive a liberal construction. In case Brij Inder Singh v. Kanshi Ram (AIR 1917 PC 156) it was observed by their Lordships of the Privy Council that true guide for a Court to exercise the discretion under Section 5 of the Act is whether the appellant acted with reasonable diligence in prosecuting the appeal. In Shakuntala Devi fain v. Kuntal Kumari the Supreme Court has held that unless want of bona fides of such inaction or negligence as would deprive a party of the protection of Section 5 of the Limitation Act is proved, the application must not be thrown out or any delay cannot be refused to be condoned. The Supreme Court in case Shanti Prasad Gupta v. Dy. Director of Consolidation and Others [(1981) (Supp.) SCC 73] has held that whether or not there is 'sufficient cause' for condensation of delay is a question of fact depending upon the facts and circumstances of the particular case. In case O.P. Kathpalia v. Lakhmir Singh (dead) their Lordships of the Supreme Court have held that if the refusal to condone the delay results in grave miscarriage of justice, the same would be a ground to condone the delay. The observations of the Supreme Court in case Collector, Land Acquisition Anantnag and Other v. Mst. Katiji & Others are of utmost significance in so far as the above aspect is concerned. In the above said case their Lordships of the Supreme Court have held:

"The Legislature has conferred the power to condone delay by enacting Section 5 of the Indian Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on 'merits'. The expression 'sufficient cause' employed by the Legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice that being the life purpose for the existence of the institution of Courts, It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court, But the message does not appear to have percolated down to all the other Courts in the hierarchy. And such a liberal approach is adopted on principle as it is realised that:

1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.

2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.

3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in & rational common sense pragmatic manner.

4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have Vested right in injustice being done because of a non-deliberate delay.

5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.

6. It must be grasped that judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so".

10. Equally important and far reaching are the observations made by the Supreme Court in a recent decision in case State of Haryana v. Chander Mani and Others wherein their Lordships of the Supreme Court have held:

"It is notorious and common knowledge that delay in more than 60 percent of the cases filed in this Court--be it by private party or the State--are barred by limitation and this Court generally adopts liberal approach in condensation of delay finding somewhat sufficient cause to decide the appeal on merits. It is equally common knowledge that litigants including the State are accorded the same treatment and the law is administered in an even handed manner. When the State is an applicant, praying for condensation of delay, it is common knowledge that on account of impersonal machinery and the inherited bureaucratic methodology imbued with the note-making, file-pushing, and passing-on-the-buck ethos, delay on the part of the State is less difficulty to understand though more difficulty to approve, but the State represents collective cause of the community. It is axiomatic that decisions are taken by officer/agencies proverbially at slow pace and encumbered process of pushing the files from table to table and keeping it on table for considerable time causing delay--intentional or otherwise--is a routine. Considerable delay of procedural red tape in the process of their making decision is a common feature. Therefore, certain amount of latitude is not impermissible. If the appeals brought by the State are lost for such default no person is individually affected but what in the ultimate analysis suffers, is public interest. The expression "sufficient cause" should, therefore be considered with pragmatism injustice-oriented approach rather than the technical detection of t cause for explaining every day's delay",

The position which emerges out as a result of the above discussion is that the words 'sufficient cause', occurring in Section 5 of the Act, should receive a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bona fides is imputable to the applicant. Moreover, as already explained the same has to be determined with reference to the circumstances of each case.

11. As regards the present case, as already stated, there is a delay of 231 days. The objector UOI (applicant in IA 2150/94) alongwith the rejoinder dated the 24th July, 1996 has also filed a chart (Annexure-X annexed to the rejoinder) explaining in detail the delay of 231 days. It was argued by the learned Counsel for the petitioner that the respondent/objector was under an obligation to explain each day's delay which has not been done by the respondent / objector UOI in the above said Annexure-X also. No doubt, an applicant, seeking condensation of delay, is under an obligation to explain each day's delay but as has been held by the Supreme Court in Collector, Land Acquisition, Anantnag's case (supra) every day's delay does not mean that a pedantic approach should be made and the doctrine has to be applied in a rational common sense pragmatic manner. If the above said criterion is applied to the case in hand it cannot be stated that the delay-has not been explained by the applicant/objector UOI in accordance with the above said law as laid down by the Supreme Court. Moreover, the respondent/objector in the present case is a 'State' and though, as a matter of fact, no exception is to be made for the Government in the matter of condensation of delay yet as per settled law, as laid down by the Supreme Court in case State of Haryana (supra) when the State is an applicant the various factors including the functioning of the Government which is not 'individual' but 'institutional', involving decision making process at various levels, has also to be taken into consideration.

12. Considering all the above aspects, in my opinion, the applicant / respondent objector UOI has shown 'sufficient cause' within the meaning of Section 5 of the Limitation Act, 1963 for not filing the objections under Section 30 of the Arbitration Act, 1940 within the prescribed time limit and, therefore, the application (A 2150/ 94), filed under Section 5 of the Limitation Act, 1963 deserves to be allowed. However, for the inconvenience caused to the non-applicant/petitioner, the non-applicant/petitioner can be duly compensated by way of costs?

13. In the result, the application (IA 2150/94) filed under Section 5 of the Limitation Act, 1963 for condensation of delay in filing the objections (IA 2149/94) on behalf of the respondent/objector UOI under Section 30 of the Arbitration Act, 1940, is allowed subject to payment of costs. Costs fixed at Rs. 5,000/- and awarded to the non-applicant/petitioner.

The application (IA 2150/94) stands disposed of in above terms.