Krishnapatnam Port Company ... vs Strategic Port Investments Kpc ...
2016 Latest Caselaw 4467 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                     Order delivered on: 12th July, 2016

+              I.A. No.5187/2016 in Arb.A. (Comm) No.13/2016

       KRISHNAPATNAM PORT COMPANY LIMITED         ..... Appellant
                    Through   Mr.Amit Sibal, Sr.Adv. with
                              Mr.Dhruv Dewan, Mr.Sulabh
                              Rewari, Mr.Arjun Pall, Mr. Namit
                              Suri & Mr.Vivek R, Advs.

                             versus

       STRATEGIC PORT INVESTMENTS KPC LIMITED & ORS
                                                  ..... Respondents
                     Through   Mr.Rajiv Nayar, Sr.Adv. with
                               Ms.Tine Abraham, Mr.Shankh
                               Sengupta & Ms.Prerna Jain, Advs.
                               for R-1.

       CORAM:
       HON'BLE MR.JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J. (ORAL)

1. By way of this order, I propose to decide the above said application filed by the appellant under Section 151 CPC, for condonation of delay of 144 days in re-filing the appeal.

2. The appellant has filed the accompanying appeal under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the "Act") impugning the orders on interim measures dated 22nd September, 2015 passed by the Arbitral Tribunal in arbitration proceedings bearing reference LCIA Arbitration No.142681 commenced by the respondent No.1. By way of the impugned order, the Arbitral Tribunal has passed orders against the appellant.

3. The limitation for filing the appeal is three months from the date of receipt of order. The appellant had filed the present appeal on 29th October, 2015. However, the appeal could not be cleared for listing due to various defects being pointed out by the Registry after each re- filing. As per the appellant, the grounds of the appeal was also required to be modified on account of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance, 2015 (now, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015) and the practice directions issued by this Court pursuant thereto.

4. The appellant submits that while the objections were being considered by the Registry, the Supreme Court by its order dated 30th November, 2015 passed in an application for directions filed by the appellant (being I.A. Nos.7-9/2015 in SLP (Civil) Nos.29511-29513 of 2014) kept the impugned orders in abeyance.

5. Thereafter, the appellant was making attempts to clear the objections in December 2015, however, the Registry yet again returned the appeal under objections in January 2016. In between, the respondent No.1 also served upon the appellant an application seeking recall of the order dated 30th November, 2015 passed by the Supreme Court. The said application for recall was mentioned for listing by the respondent No.1 before the Supreme Court on 12th January, 2016. The said application seeking recall came up for hearing before the Supreme Court on 1st February, 2016, 5th February, 2016, 12th February, 2016, 2nd March, 2016 and 4th March, 2016.

6. Admittedly, the said application for recall filed by the respondent No.1 was heard and disposed of by the Supreme Court on 4 th March, 2016. However, the order dated 4th March, 2016 (hereinafter referred

to as the "said order") was uploaded onto the website of the Supreme Court only on 17th March, 2016 and the certified copy of the order was made available to the appellant only on 18th March, 2016. In terms of the said order, the Supreme Court had requested this Court to make an endeavour to decide the present appeal within four weeks from the date of communication of the said order.

7. The appellant is now insisting to argue the present appeal before this Court in terms of the said order passed by the Supreme Court on merit after considering the delay of 144 days which has occurred in re- filing of the appeal, in view of peculiar reasons. It is alleged that the delay is neither intentional nor deliberate.

8. Reply on behalf of respondent No.1 to the application for condonation of delay in re-filing the appeal has been filed. Along with the reply, an application for condonation of delay in filing the reply has also been filed. The prayer of the said application is allowed and the reply is taken on the record. The prayer of the application in hand is strongly opposed by respondent No.1 on the grounds that in the application seeking condonation of delay of 144 days (i.e., 144 days beyond the permissible 30 days period as provided under the Delhi High Court Rules) in re-filing the appeal before this Court, the appellant has intentionally failed to clear the procedural objections raised by the Registry of this Court for a period of around 5 months without valid reasons. After the expiry of 30 days of the objection raised by the Registry, it is to be treated as fresh filing and then the appeal becomes time-barred. The present application is liable to be dismissed as the appellant failed to act diligently as well as to show sufficient cause.

9. Mr.Rajiv Nayar, learned Senior counsel appearing on behalf of respondent No.1 has referred the following decisions in support of his submissions:-

(i) Asha Sharma & Ors. v. Sanimiya Vanijiya P. Ltd. & Ors.

(2009) 162 DLT 542.

(ii) Delhi Development Authority v. M/s Durga Construction Co., FAO(OS) Nos.485-86/2011, decided on 7th November, 2013.

(iii) Brij Mohan v. Sunita, (2010) 166 DLT 537.

(iv) Mahanagar Telephone Nigam Ltd., Delhi v. M/s Prakash & Co. Construction Company, OMP No.13/2013, decided on 21st January, 2013.

10. While deciding the applications being I.A. Nos.13-18/2016 in SLP(C) Nos.29511-13/2014 on 4th March, 2016 at page No.7 and 8, the observation was made by the Supreme Court after the statement was made by the parties before the Court, the relevant part has been reproduced here as under:-

"With this, we advert to the other part of the order dated 30.11.2015 by which interim orders dated 22.09.2015 passed by the Arbitral Tribunal were kept in abeyance till the disposal of the preliminary issue by the Tribunal. It was stressed by the learned counsel for the applicants that the aforesaid interim order of the Tribunal is subject matter of the appeal before the High Court of Delhi and, therefore, this Court should not have passed any order of the aforesaid nature. It was also submitted that the High Court should take up the said appeal and hear the same. Mr. C.A. Sundaram, learned senior counsel appearing for the non-applicant, has no objection for expeditious hearing of the appeal by the High Court which is filed by the non- applicant against orders dated 22.09.2015 of the Arbitral Tribunal. Having regard to the urgency involved, we request the High Court to make an endeavour to decide

the appeal within four weeks from the date of communication of this order."

11. As far as the decisions referred by the learned Senior counsel appearing on behalf of respondent No.1 in Delhi Development Authority (supra) and Mahanagar Telephone Nigam Ltd., Delhi (supra) are concerned, both the matters were pertaining to objections under Section 34 of the Act wherein the applications were filed for condonation of delay in re-filing. No doubt, in order to decide the application for condonation of delay in re-filing, sufficient cause has to be examined. However, scope of deciding such applications in the arbitration matters and in general cases are slightly different. In the arbitration matter, when the objections are filed under Section 34, there is a prescribed period of limitation and in the main filing, even the delay of one day after the expiry of three months and 30 days cannot be condoned in view of the decision of the Supreme Court in the case of Union of India v. M/s Popular Constructions Co., reported in AIR 2001 SC 4010. The Court is to take a strict view in condoning the delay in re-filing as per the scheme of the Act and settled law on this aspect. No doubt, the sufficient cause has to be shown by the party but same principles and application of mind may not apply.

12. As noted from pages 7 & 8 of the said order of the Supreme Court, the impression is given by the parties before the Supreme Court that the appeal filed by the appellant will be decided by the High Court. Even at page 8 of the said order, it is clearly observed by the Supreme Court that having regard to the urgency involved, the High Court to make endeavour to decide the appeal within four weeks from the date of communication of the said order. It is specifically mentioned by the

appellant that the order of the Supreme Court passed on 4 th March, 2016 was uploaded on the website of the Supreme Court only on 17 th March, 2016 and certified copy of the order was made available to the appellant only on 18th March, 2016. Mr.Amit Sibal, learned Senior counsel appearing on behalf of the appellant submits that once the order of the Supreme Court was available to the appellant, the appellant started process to remove the objections and ultimately, in the month of April 2016, all the objections were removed and the appeal was listed before the Court. He further submits that his client did not remove the objections prior to the date of the order passed by the Supreme Court, as he thought that the matter was subjudiced before the Supreme Court. He also submits that in any case, the appeal was filed in October, 2015 within five weeks, although the limitation of filing the appeal was three months and his client, all the time, wanted to get the appeal heard at an early date by this Court or by the Supreme Court. Since the Supreme Court has referred the matter before this Court, therefore, the objections were removed within a short time. Therefore, the application is liable to be allowed.

13. Mr.Rajiv Nayar, learned Senior counsel appearing on behalf of respondent No.1 has also heavily relied upon the judgment of Asha Sharma & Ors. (supra). Having gone through the said judgment passed by the Division Bench of this Court, it appears that the facts and circumstances of the said case as well as of the present case are different. Paras 23 & 24 of the said judgment reads as under:-

"23. It is trite law that Rules of Procedure being hand- mades of justice, a party should not be refused relief merely because of some mistakes, negligence or inadvertence. Rules of Procedure are designed to facilitate justice and further its ends. But, even if we take a rather liberal approach in this matter, we are unable to find any

good ground for condonation of delay in filing this appeal. None of the reasons given in the application is convincing or logical. The impression we gather is that the appellants deliberately delayed filing of the appeal so as to prolong the litigation. It cannot be said that even if the appellants were totally negligent and careless and have not come forward with any worthwhile explanation for the delay, the court ought to condone the delay in re-filing. The Rules framed by the High Court cannot be allowed to be taken so casually and there will be no sanctity behind the rules if every delay in re-filing, is to be condoned irrespective of howsoever unreasonably long and unexplained it be, and howsoever mandatory be the nature of the documents, non-filing of which renders the Appeal defective. We cannot condone the delay merely because an application for condonation of delay has been filed. No court would not like to reject an appeal as time barred unless there are strong reasons, which compel the court to take such a view. Some indulgence and a liberal view in such matters is well-accepted but to say that the court has no option in the matter and must accept the Memorandum of Appeal irrespective of the nature of the objections and delay in re- filing, even where there is no reasonable explanation to justify the delay, would only be travesty of justice and will be as good as removing the relevant Rule in High Court Rules and Orders, from the Statute Book.

24. These days we find a growing tendency to file an incomplete Memorandum of Appeal and then take unreasonably long time to remove the defects, even where such defects can be cured within a very short time. Such a practice cannot be said to be conducive to be fair and reasonable and therefore needs to be curbed. An unduly liberal and benevolent approach will only give encouragement to such unfair practices and therefore is not called for. When an Appeal comes up for hearing long after expiry of the prescribed period of limitation, it springs surprise on opposite party, which assumes finality in his favour on account of non-filing of Appeal within a reasonable period."

14. From the said paras, it appears that the Division Bench felt that the party was trying to delay the matter and at the same time, the

delay was unexplained. Therefore, the Court had no other option but to take a view against the said party and the unfair practice was not accepted in the said case. However, in the present case, the facts and circumstances are different, as initially the present appeal was filed on 29th October, 2015 within five weeks despite of limitation of three months. Simultaneously, the appellant also approached the Supreme Court. The order of the Tribunal was stayed by the Supreme Court. It is the respondent No.1 who was to move an application before the Supreme Court who ultimately passed the order requesting this Court to decide the appeal.

15. Learned counsel for the appellant has rightly pointed out that respondent No.1 ought to have raised the objection before the Supreme Court when the judgment was rendered about the delay in removing the objections. Assuming for the sake of arguments, if the objections are removed in re-filing within 30 days about progress of appeal in this Court, the position would have been the same as if parties would have taken the adjournments in view of subjudice of the pending applications in the Supreme Court. In the facts and circumstances of the present case, I am of the view that the appellant has been able to show the sufficient cause to condone the delay of 144 days which has occurred in re-filing of the abovementioned appeal. The said delay appears to be bonafide and in case the same is not condoned, the appellant will suffer an irreparable loss and injury, coupled with the fact that the directions are issued by the Supreme Court in the month of March, 2016 to decide the appeal by this Court.

16. The prayer of this application is allowed and the delay in re-filing the appeal is condoned.

17. The application is accordingly disposed of.

Arb. A.(Comm.) No.13/2016, I.A. No.5184/2016 (for stay) and I.A. No.5185/2016 (for permission to place on record the additional documents) Reply has not been filed by respondent No.1. Let the same be filed within three weeks. Rejoinder, if any, be filed within two weeks thereafter.

List the appeal before Court on 26th August, 2016.

(MANMOHAN SINGH) JUDGE JULY 12, 2016