Kamlesh Ishwarbhai Patel vs Uoi & Ors
2012 Latest Caselaw 3933 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI


+    Crl. M.A. 4671/2011 (delay) in CRL.A. 493/2011

%                                          Reserved on: 15th May, 2012
                                           Decided on: 6th July, 2012

       KAMLESH ISHWARBHAI PATEL                 ..... Appellant
                   Through: Mr. Shamik. S. Sanjanwala, Adv.

                    versus


       UOI & ORS                                           ..... Respondent

Through: Mr. Jatan Singh, CGSC with Mr. Tushar Singh, Adv. for R-1.

Mr. Mukesh Gupta, APP for State.

Coram:

HON'BLE MS. JUSTICE MUKTA GUPTA

1. By this application the Appellant seeks condonation of delay of 166 days in filing the present appeal.

2. The Foreign Exchange Appellate Tribunal (in short The Tribunal) vide its order dated 2nd February, 2007 in Appeal No. 121/1999 directed the Appellant to deposit a sum of Rs. 7,00,50,000/- as pre-deposit failing which the appeal would not be entertained. Against the said order dated 2 nd February, 2007 of the Tribunal the Appellant filed a writ petition before the High Court of Gujarat which was returned for want of territorial jurisdiction on 7th December, 2007 to be presented before the appropriate forum. Consequently, the Appellant preferred writ petition (civil) No. 7260/2007 before this Court on 29th September, 2007 wherein this Court issued notice

and stayed further proceedings before the Learned Tribunal. Vide order dated 30th July, 2010 this Court disposed of the writ petition in view of the decision of the Hon'ble Supreme Court in Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement (2010) 4 SCC 772 holding that appropriate remedy would be by way of filing an appeal. On 2 nd August, 2010 the Appellant applied for a certified copy of the order which was delivered on 9th August, 2010. The Appellant filed the present appeal on the 10th February, 2011. The reasons for delay in filing the present appeal as stated on affidavit are that the Appellant is a resident outside Delhi and has limited means. It took some time for the Appellant to arrange necessary funds for the purpose of filing the appeal. Further, due to shifting of the Advocate's office, the file of the writ petition could not be traced and so there was some delay in tracing out the file. Thus, it is prayed that the delay of 166 days in filing the appeal be condoned.

3. Learned counsel for the Appellant relying upon Kailash Vs. Nanhku and Ors. (2005) 4 SCC 480 and Thirumalai Chemicals Limited Vs. Union of India & Ors. (2011) 6 SCC 739 canvassed that the right of appeal is a substantive right whereas the law of limitation is a procedural law and thus the procedural law cannot override the substantive right. If there is sufficient cause for condoning the delay, this Court will exercise its powers and ensure that substantive justice is assured to the parties.

4. Learned counsel for the Respondent on the other hand relies upon the decisions in Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur & Ors. (2008) 3 SCC 70; Goodearth Steels Pvt. Ltd. Vs. Commissioner of Central Excise, Kanpur (2008) 3 SCC 77 and

Commissioner of Customs, Central Excise, Noida Vs. Punjab Fibres Ltd., Noida (2008) 3 SCC 73 to contend that proviso to sub-Section 1 of Section 35 Foreign Exchange Management Act (in short FEMA) clearly provide that after the expiry of the period of 60 days, the Court has no power to condone the delay and that there is a complete exclusion of Section 5 of the Limitation Act.

5. Heard learned counsel for the parties. Section 35 of the Foreign Exchange Management Act 1999 (in short FEMA) provides as under:

"Appeal to High Court.

35. Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal on any question of law arising out of such order:

Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.

Explanation.--In this section "High Court" means--

(a) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and

(b) where the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent, or in a case where there are more than one respondent, any of the respondents, ordinarily resides or carries on business or personally works for gain."

6. A perusal of Section 35 FEMA shows that a total time period of 120 days is provided to the High Court to condone the delay. The issue thus arises whether the High Court has power to condone the delay beyond a period of 120 days or is the proviso to Section 35 FEMA mandatory in

nature so as to exclude Section 5 of the Limitation Act and curtail all powers of High Court to condone the delay beyond the period of 120 days. In Commissioner of Customs, Central Excise, Noida; Singh Enterprises and Goodearth Steels Pvt. Ltd. (supra) the Hon'ble Supreme Court while considering Section 35(H) of the Central Excise Act, 1944 took the view that first proviso to Section 35 makes the position clear that the appeal has to be preferred between three months from the date of communication, that is if the Commissioner is satisfied that the Appellant was prevented by sufficient cause from filing the appeal within the aforesaid period of 60 days, he may allow it to be presented within a further period of 30 days. Thus, the Appellate Authority has no power to allow the appeal to be presented beyond the period of 30 days after the expiry of 60 days which is the normal period for preferring the appeal. It was further held that there is complete exclusion of Section 5 of the Limitation Act.

7. In Thirumalai Chemicals Ltd. (supra) it was held:

"27. Right of appeal conferred under Section 19(1) of FEMA is therefore a substantive right. The procedure for filing an appeal under Sub-section (2) of Section 19 as also the proviso to Sub-section (2) of Section 19 conferring power on the Tribunal to condone delay in filing the appeal if sufficient cause is shown, are procedural rights.

29. Law of limitation is generally regarded as procedural and its object is not to create any right but to prescribe periods within which legal proceedings be instituted for enforcement of rights which exist under substantive law. On expiry of the period of limitation, the right to sue comes to an end and if a particular right of action had become time barred under the earlier statute of limitation the right is not revived by the provision of the latest statute. Statutes of limitation are thus

retrospective insofar as they apply to all legal proceedings brought after their operation for enforcing cause of action accrued earlier, but they are prospective in the sense that neither have the effect of reviving the right of action which is already barred on the date of their coming into operation, nor do they have effect of extinguishing a right of action subsisting on that date. Bennion on Statutory Interpretation 5th Edn.(2008) Page 321 while dealing with retrospective operation of procedural provisions has stated that provisions laying down limitation periods fall into a special category and opined that although prima facie procedural, they are capable of effectively depriving persons of accrued rights and therefore they need be approached with caution.

32. Limitation provisions therefore can be procedural in the context of one set of facts but substantive in the context of different set of facts because rights can accrue to both the parties. In such a situation, test is to see whether the statute, if applied retrospectively to a particular type of case, would impair existing rights and obligations. An accrued right to plead a time bar, which is acquired after the lapse of the statutory period, is nevertheless a right, even though it arises under an Act which is procedural and a right which is not to be taken away pleading retrospective operation unless a contrary intention is discernible from the statute Therefore, unless the language clearly manifests in express terms or by necessary implication, a contrary intention a statute divesting vested rights is to be construed as prospective.

34. Since the appeal was filed under FEMA with an application for condonation of delay such an appeal has to be considered by the Tribunal under the proviso to Sub-section (2) of Section 19 FEMA and if the Company shows sufficient cause for not filing the appeal in time then the Tribunal can condone the delay and entertain the appeal, especially when there is no accrued right to the Respondent to plead a time bar. The legal position is summarized thus by Justice G.P. Singh in

Principles of Statutory Interpretation (12th Edition-Page 541) thus:

"Statutes of Limitation are thus retrospective in so far as they apply to all legal proceedings brought after their operations for enforcing causes of action accrued earlier...."

48. Above discussion will clearly demonstrate that Section 49 of FEMA does not seek to withdraw or take away the vested right of appeal in cases where proceedings were initiated prior to repeal of FERA on 01.06.2000 or after. On a combined reading of Section 49 of FEMA and Section 6 of General Clauses Act, it is clear that the procedure prescribed by FEMA only would be applicable in respect of an appeal filed under FEMA though cause of action arose under FERA. In fact, the time limit prescribed under FERA was taken away under the proviso to Sub-section (2) of Section 19 and the Tribunal has been conferred with wide powers to condone delay if the appeal is not filed within forty-five days prescribed, provided sufficient cause is shown. Therefore, the findings rendered by the Tribunal as well as the High Court that the Tribunal does not have jurisdiction to condone the delay beyond the date prescribed under FERA is not a correct understanding of the law on the subject.

49. We, therefore, hold that the Appellate Tribunal can entertain the appeal after the prescribed period of 45 days if it is satisfied, that there was sufficient cause for not filing the appeal within the said period. We are therefore inclined to set aside the orders passed by the Tribunal and the High Court and remit the matter back to the Tribunal for fresh consideration in accordance with law on the basis of the findings recorded by us. We order accordingly."

8. In Kailash (supra) the three Judge Bench of the Hon'ble Supreme Court while considering the time prescribed under Order VIII Rule 1 CPC

held that under Order VIII Rule 9 in spite of the time limit having expired for filing of the written statement, the Court is not powerless to permit written statement being filed if the Court requires such a written statement. It held that unless compelled by specific language of the Statute the provisions of CPC or any other procedural enactment ought not to be construed in a manner which would leave the Court helpless in meeting extraordinary situations for ends of justice. It was held:

"26. The text of Order VIII, Rule 1, as it stands now, reads as under : -

"1. Written statement.-- The defendant shall, within thirty days from the date of service of summons on him, present a written statement of his defence:

Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the same on such other day, as may be specified by the Court, for reasons to be recorded in writing, but which shall not be later than ninety days from the date of service of summons."

27. Three things are clear. Firstly, a careful reading of the language in which Order VIII, Rule 1 has been drafted, shows that it casts an obligation on the defendant to file the written statement within 30 days from the date of service of summons on him and within the extended time falling within 90 days. The provision does not deal with the power of the court and also does not specifically take away the power of the court to take the written statement on record though filed beyond the time as provided for. Secondly, the nature of the provision contained in Order VIII, Rule 1 is procedural. It is not a part of the substantive law. Thirdly, the object behind substituting Order VIII, Rule 1 in the present shape is to curb the mischief of unscrupulous defendants adopting dilatory tactics, delaying

the disposal of cases much to the chagrin of the plaintiffs and petitioners approaching the court for quick relief and also to the serious inconvenience of the court faced with frequent prayers for adjournments. The object is to expedite the hearing and not to scuttle the same. The process of justice may be speeded up and hurried but the fairness which is a basic element of justice cannot be permitted to be buried.

28. All the rules of procedure are the handmaid of justice. The language employed by the draftsman of Processual law may be liberal or stringent, but the fact remains that the object of prescribing procedure is to advance the cause of justice. In an adversarial system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the Statute, the provisions of the CPC or any other procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justice. The observations made by Krishna Iyer, J. in Sushil Kumar Sen v. State of Bihar : [1975]3SCR942, are pertinent:-

"The mortality of justice at the hands of law troubles a Judge's conscience and points an angry interrogation at the law reformer.

The Processual law so dominates in certain systems as to overpower substantive rights and substantial justice. The humanist rule that procedure should be the handmaid, not the mistress, of legal justice compels consideration of vesting a residuary power in judges to act ex debito justitiae where the tragic sequel otherwise would be wholly inequitable.... Justice is the goal of jurisprudence

-- Processual, as much as substantive."

29. In The State of Punjab and Anr. v. Shamlal Murari and Anr. : [1976]2SCR82, the Court approved in no unmistakable terms the approach of moderating into wholesome directions what is regarded as mandatory on the principle that "Processual

law is not to be a tyrant but a servant, not an obstruction but an aid to justice. Procedural prescriptions are the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice." In Ghanshyam Dass and Ors. v. Dominion of India and Ors. : [1984]3SCR229, the Court reiterated the need for interpreting a part of the adjective law dealing with procedure alone in such a manner as to subserve and advance the cause of justice rather than to defeat it as all the laws of procedure are based on this principle.

30. It is also to be noted that though the power of the Court under the proviso appended to Rule 1 of Order VIII is circumscribed by the words -- "shall not be later than ninety days" but the consequences flowing from non-extension of time are not specifically provided though they may be read by necessary implication. Merely, because a provision of law is couched in a negative language implying mandatory character, the same is not without exceptions. The courts, when called upon to interpret the nature of the provision, may, keeping in view the entire context in which the provision came to be enacted, hold the same to be directory though worded in the negative form.

31. In Sangram Singh v. Election Tribunal, Kotah and Anr. : [1955]2SCR1, this Court highlighted 3 principles while interpreting any portion of the CPC. They are:

(i) A code of procedure must be regarded as such. It is 'procedure', something designed to facilitate justice and further its ends: not a penal enactment for punishment and penalties; not a thing designed to trip people up. Too technical a construction of sections that leaves no room for reasonable elasticity of interpretation should therefore be guarded against (provided always that justice is done to 'both' sides) lest the very means designed for the furtherance of justice be used to frustrate it.

(ii) There must be ever present to the mind the fact that our laws of procedure are grounded on a principle of natural

justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their absence and that they should not be precluded from participating in them. Of course, there must be exceptions and where they are clearly defined they must be given effect to.

(iii) No forms or procedure should ever be permitted to exclude the presentation of the litigant's defence unless there be an express provision to the contrary.

41. Considering the object and purpose behind enacting Rule 1 of Order VIII in the present form and the context in which the provision is placed, we are of the opinion that the provision has to be construed as directory and not mandatory. In exceptional situations, the court may extend the time for filing the written statement though the period of 30 days and 90 days, referred to in the provision, has expired. However, we may not be misunderstood as nullifying the entire force and impact - the entire life and vigour - of the provision. The delaying tactics adopted by the defendants in law courts are now proverbial as they do stand to gain by delay. This is more so in election disputes because by delaying the trial of election petition, the successful candidates may succeed in enjoying the substantial part, if not in its entirety, the term for which he was elected even though he may loose the battle at the end. Therefore, the judge trying the case must handle the prayer for adjournment with firmness. The defendant seeking extension of time beyond the limits laid down by the provision may not ordinarily be shown indulgence."

9. The reliance of the Petitioner on Thirumalai Chemicals Ltd. is misconceived, as the Court was dealing with Section 19 FEMA where no upper limit is prescribed for the period of limitation and on sufficient cause delay of any number of days can be condoned. In the present case the grounds taken for condonation of delay are that after the dismissal of the writ

petition in view of the decision in Raj Kumar Shivhare the Petitioner had to arrange for funds and thereafter file of the writ petition got misplaced in the office of the counsel. It may be noted that the Appellant was pursuing his remedies with due diligence as immediately after the order of the Tribunal dated 2nd February, 2007 he filed a writ petition before the High Court of Gujarat in May, 2007 and on the return of the said petition for want of territorial jurisdiction a writ petition was filed before this Court on 29 th September, 2007. Thus, a party who has been all through pursuing his remedies cannot be non-suited on the count that the period of limitation prescribed under Section 35 of the FEMA is mandatory. In view of the law laid down by the larger Bench of the Hon'ble Supreme Court in Kailash Vs. Nanhku & Ors. while dealing with a similar provision under Order VIII Rule 1 CPC, the delay in filing the appeal is condoned.

10. Application is disposed of.

CRL.A. 493/2011

List this appeal before Roster Bench on 9th August, 2012.

(MUKTA GUPTA) JUDGE JULY 06, 2012 'ga'