Velagapudi Vijaya Laxmi vs M/S. Hayagreeva Farms And ...
2023 Latest Caselaw 1364 Tel

             HON'BLE SRI JUSTICE P.NAVEEN RAO
                            AND
            HON'BLE SRI JUSTICE J. SREENIVAS RAO


      I.A.No.1 of 2022 and APPEAL SUIT No. 141 of 2022

                         Date: 24.11.2022

Between:

M/s.Shakti Press Limited at Mondha,
Unit-II, Plot No.49, Kh.No.69, Kanholibara Road,
Tah.Hingna, District Nagpur, through its
Managing Director Mr.Raghav Sharma,
Aged 57 years, Occu: Business.

                                             .... Appellant/defendant
            And

M/s.Divya Shakti Paper Mills Pvt. Ltd.,
Rep.by its Authorized Signatory,
G.Maheswar, S/o. G.Sattaiah,
Aged Major, having its Regd.Office 7 Sales
Ofice at Sy.No.252, Gaganpahad, Hyderabad.

                                             .... Respondent/plaintiff

This Court made the following :

HON'BLE SRI JUSTICE P.NAVEEN RAO AND HON'BLE SRI JUSTICE J. SREENIVAS RAO

I.A.No.1 of 2022 and APPEAL SUIT No. 141 of 2022

JUDGMENT: (Per Hon'ble Sri Justice P Naveen Rao)

Heard learned counsel for Appellant (defendant) Sri Apurva

M.Gokhale and learned counsel for respondent (plaintiff)

Sri K.K.Waghray. Parties are referred to as arrayed before trial Court.

2. Plaintiff is a private limited company registered with the

Registrar of Companies, Hyderabad. The plaintiff company is

engaged in the business of manufacturing coated and uncoated

duplex paper boards having its factory situated at Mahaboobnagar

and also having its sales and administrative office at Hyderabad.

Plaintiff has agreed to supply the required paper boards to the

defendant company. Since 2014 defendant dealt with the plaintiff

and whenever purchase orders are placed for required material, the

plaintiff has supplied and delivered the same through transport. The

plaintiff provided credit facility to the defendant and plaintiff has

opened the account, defendant also opened the account in its books

of accounts which are maintained in the regular course of business.

Whenever defendant placed the order, the plaintiff has issued

invoices and sent the goods through transport.

3. By 26.11.2015, total outstanding balance payable by the

defendant to the plaintiff was 11,59,176/- inclusive of interest on

late payments.

4. According to the plaintiff, he issued legal notice through lawyer

on 4.12.2015 demanding the payment. Again the plaintiff issued

legal notice to the defendant to furnish "C" forms for 1,04,98,059/-

failing which the defendant would be held liable to pay at @ 3% i.e.,

3,14,942/-.

5. The defendant received said legal notice and issued reply notice

dated 5.1.2016 denying the allegations leveled in the notice. He made

a counter claim stating that he incurred losses due to poor quality of

material supplied by the plaintiff and asked to pay a sum of

15,00,000/- towards the losses incurred by the defendant. The

defendant did not furnish "C" forms even after calling upon through

the legal notice.

6. Hence, plaintiff filed O.S.No.287 of 2016 in the Court of the

Hon'ble IX Senior Civil Judge, Ranga Reddy District, at L.B.Nagar, for

recovery of 14,74,118/-. Even after service of summons, defendant

failed to file written statement within the time granted by the Court.

Therefore, the Court below set the defendant Company

ex parte on 21.10.2016. Having come to know that it was set ex parte,

defendant filed I.A.No.73 of 2017 along with the written statement

praying to set aside the ex parte order. The said I.A., was allowed on

27.02.2018 on condition of payment of costs of 200/- to the

plaintiff. However, defendant failed to pay the costs. Therefore, the

I.A., was dismissed for default. Ultimately, the suit was allowed by

judgment and decree dated 20.07.2018.

7. According to defendant, he came to know about the

proceedings in the suit for the first time on 31.05.2019 when a

person from plaintiff company informed that a decree has already

been passed and unless the amount was paid immediately, execution

proceedings would be taken up. Having realized that an ex-parte

decree was passed, on 19.06.2019 petitioner filed application under

Order IX Rule 13 read with Section 151 of the Code of Civil Procedure

(CPC) to set aside the ex parte decree and judgment dated 20.7.2018.

As there was delay of 303 days in filing said application, he has filed

I.A.No.1264 of 2019 under Section 5 of the Limitation Act, 1963, to

condone the delay in filing the said application. After detailed

consideration of the matter, the trial Court declined to condone the

delay and dismissed I.A.No.1264 of 2019 by order dated 08.02.2022.

Questioning the same, Civil Revision Petition No.772 of 2022 was

filed. On consideration of respective submissions, this Court by order

dated 17.6.2022 dismissed the Civil Revision Petition No.772 of 2022.

8. This appeal is preferred challenging the judgment and decree

in O.S.No.287 of 2016. As there is delay, in filing the appeal, the

defendant filed I.A.No.1 of 2022 to condone the delay of 569 days.

9. Learned counsel for the defendant, sought to contend that he

was not aware that his application to set aside order setting him

ex parte was rejected on the ground that costs awarded by the Court

were not paid. He further asserts that his counsel has not informed

about non-payment of costs and dismissal of his application. Even

after the suit was decreed, the lawyer did not inform the same to

defendant and defendant was in the dark about the proceedings

going on in the trial Court and for negligence of the Lawyer,

defendant cannot suffer. He further contends that the trial Court

placed reliance on an e-mail sent by the plaintiff counsel on

20.07.2018 informing about passing of judgment and decree. The

said document could not have been relied upon by the trial Court

without being marked. In support of the said contention, learned

counsel also placed reliance on the circular issued by the High Court

for the State of Telangana in R.O.C.No.2750/OP CELL/2021 dated

28.09.2021 and the decision of this Court in C.R.P.No.1234 of 2020.

9.1. Learned counsel for the defendant, sought to contend that

liberal view has to be taken in matters of this nature and allow the

parties to contest the matter on merits and the trial Court erred in

not taking liberal view even though the defendant has explained the

reasons for not prosecuting the suit. In support of the said

contention, learned counsel placed reliance on the decision of the

Hon'ble Supreme Court in N.Mohan Vs. R.Madhu1.

10. Per contra, learned counsel for the plaintiff, submits that

defendant has to blame himself for not prosecuting the suit. From

the averments in the affidavit filed in support of application to

condone delay, it is clear that defendant has been in consistent touch

with his Lawyer and therefore, what is urged now is contrary to the

averments said in the application. Therefore, it cannot be said that

defendant was unaware of the progress in the case. He deliberately

kept quiet and only after summons was served in execution

proceedings, filed application to set aside ex parte decree. It was as

an after thought.

11. He also submits that even ignoring the e-mail document dated

20.07.2018, as rightly considered by the trial Court, no cogent

reasons are shown by the defendant to condone the delay. How much

of delay is caused is not important but whether a person is bona fide

in asserting facts before the Court is important. As noticed by the

trial Court, defendant was not bona fide in stating true facts.

Therefore, the trial Court rightly refused to condone the delay. The

events clearly point out that defendant was negligent in prosecuting

the suit and it is not a case where defendant was not aware of

decision in the suit. Having come to know that he was set ex parte, he

(2020) 20 SCC 302

filed I.A.No.73 of 2017 and the trial Court allowed the I.A., on

condition of payment of costs but defendant failed to pay the costs

and it is clear that he has to blame himself for what transpired

thereafter.

12. The question for consideration is whether defendant made out

a case to condone the delay of 569 days in filing this appeal.

13. Section 96 of CPC vests right in an aggrieved party to avail

remedy of appeal. Against the decision of the District Court, appeal

shall lie to the High Court. Remedy of appeal has to be availed within

90 days from the date of decree in the suit. Section 52 of the

Limitation Act vests discretion in the High Court to entertain an

appeal filed after 90 days by condoning the period of delay. Such

condonation is subject to the appellant showing sufficient cause for not

availing the remedy of appeal within 90 days.

14. Scope of Section 5 of the Limitation Act and scope of power of

Court to condone the delay in filing an appeal was subject of

consideration in plethora of precedent decisions of this Court and the

Hon'ble Supreme Court. Suffice to note few land mark decisions to

understand the concept of sufficient cause.

S.5. 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, 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 section.

14.1. In Perumon Bhagvathy Devaswom Vs Bhargavi Amma3

and N.Balakrishnan Vs M.Krishnamurthy4; the Supreme Court

considered what is meant by 'sufficient cause' and the scope of

exercising of discretion in condoning delay.

14.2. In Maniben Devraj Shah v. Municipal Corporation of

Brihan Mumbai5, the Hon'ble Supreme Court held as under:

"14. ...The law of limitation is founded on public policy. The Limitation Act, 1963 has not been enacted with the object of destroying the rights of the parties but to ensure that they approach the court for vindication of their rights without unreasonable delay. The idea underlying the concept of limitation is that every remedy should remain alive only till the expiry of the period fixed by the legislature. At the same time, the courts are empowered to condone the delay provided that sufficient cause is shown by the applicant for not availing the remedy within the prescribed period of limitation.

15. The expression "sufficient cause" used in Section 5 of the Limitation Act, 1963 and other statutes is elastic enough to enable the courts to apply the law in a meaningful manner which serves the ends of justice. No hard-and- fast rule has been or can be laid down for deciding the applications for condonation of delay but over the years this Court has advocated that a liberal approach should be adopted in such matters so that substantive rights of the parties are not defeated merely because of delay.

16. In Ramlal v. Rewa Coalfields Ltd. [AIR 1962 SC 361] this Court while interpreting Section 5 of the Limitation Act, laid down the following proposition: (AIR pp. 363-64, para 7)

"7. In construing Section 5 (of the Limitation Act) it is relevant to bear in mind two important considerations. The first consideration is that the expiration of the period of limitation prescribed for making an appeal gives rise to a right in favour of the decree-holder to treat the decree as binding between the parties. In other words, when the period of limitation prescribed has expired the decree- holder has obtained a benefit under the law of limitation to treat the decree as beyond challenge, and this legal right which has accrued to the decree-holder by lapse of time should not be light-heartedly disturbed. The other consideration which cannot be ignored is that if sufficient cause for excusing delay is shown discretion is given to the court to condone delay and admit the appeal. This discretion has been deliberately conferred on the court in order that judicial power and discretion in that behalf should be exercised to advance substantial justice."

(2008) 8 SCC 321

(1998) 7 SCC 123

(2012) 5 SCC 157

17. In Collector (LA) v. Katiji [(1987) 2 SCC 107] this Court made a significant departure from the earlier judgments and observed: (SCC pp. 108-09, para 3)

"3. The legislature has conferred the power to condone delay by enacting Section 5 of the 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 a 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....."

18. In N. Balakrishnan v. M. Krishnamurthy [(1998) 7 SCC 123], the Court went a step further and made the following observations: (SCC pp. 127-28, paras 9, 11 & 13)

"9. It is axiomatic that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the

explanation thereof is satisfactory. Once the court accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on wholly untenable grounds or arbitrary or perverse. But it is a different matter when the first court refuses to condone the delay. In such cases, the superior court would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammelled by the conclusion of the lower court.

xxx

11. Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. The law of limitation fixes a lifespan for such legal remedy for the redress of the legal injury so suffered. Time is precious and wasted time would never revisit. During the efflux of time, newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a lifespan must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. The law of limitation is thus founded on public policy. It is enshrined in the maxim interest reipublicae up sit finis litium (it is for the general welfare that a period be put to litigation). Rules of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time.

xxx

13. It must be remembered that in every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time, then the court should lean against acceptance of the explanation. While condoning the delay, the court should not forget the opposite party altogether. It must be borne in mind that he is a loser and he too would have incurred quite large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant, the court shall compensate the opposite party for his loss."

(emphasis supplied)

14.3. On review of precedent decisions in Esha Bhattacharjee v.

Raghunathpur Nafar Academy6, the Supreme Court summarized

(2013) 12 SCC 649

the principles to be applied while deciding a condonation of delay

petition as under:

"21. From the aforesaid authorities the principles that can broadly be culled out are

21.1. (i) There should be a liberal, pragmatic, justice-oriented, non- pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.

21.2. (ii) The terms "sufficient cause" should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact- situation.

21.3. (iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis.

21.4. (iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.

21.5. (v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.

21.6. (vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.

21.7. (vii) The concept of liberal approach has to encapsule the conception of reasonableness and it cannot be allowed a totally unfettered free play.

21.8. (viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.

21.9. (ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.

21.10. (x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.

21.11. (xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.

21.12. (xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception.

21.13. (xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude.

22. To the aforesaid principles we may add some more guidelines taking note of the present day scenario. They are: -

22.1. (a) An application for condonation of delay should be drafted with careful concern and not in a half hazard manner harbouring the notion that the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system.

22.2. (b) An application for condonation of delay should not be dealt with in a routine manner on the base of individual philosophy which is basically subjective.

22.3 (c) Though no precise formula can be laid down regard being had to the concept of judicial discretion, yet a conscious effort for achieving consistency and collegiality of the adjudicatory system should be made as that is the ultimate institutional motto.

22.4. (d) The increasing tendency to perceive delay as a non- serious matter and, hence, lackadaisical propensity can be exhibited in a non- challant manner requires to be curbed, of course, within legal parameters."

(emphasis supplied)

15. From the precedent decisions, it is discernible that the Court is

vested with power to condone the delay in filing an appeal if sufficient

cause is shown by the litigant. While assessing the reasons for delay

and the quantum of delay, Court should adopt liberal approach. It is

not necessary that person should explain every day's delay in literal

sense. When substantial justice and technical considerations are

pitted against each other cause of substantial justice should be

preserved. Any course of action adopted by the Court must serve the

ends of justice. Once the Court is convinced that delay is properly

explained and is non-deliberate, court must lean in favour of

condoning the delay.

16. In exercising its discretion to condone delay, the Court is

required to see whether delay is satisfactorily explained; there was no

deliberate, wanton delay in prosecuting the litigation; litigant was not

resorting to dilatory tactics; whether explanation lacks bona fides of

litigant. The Court should also keep in mind the prejudice that may

be caused to decree holder. The right accrued to decree holder by

lapse of time due to his own failure to prosecute legal remedy within

reasonable time cannot be lightly ignored. When the delay is long, as

in this case, the scrutiny is rigid and burden is heavy on the litigant

to explain every aspect of his conduct and behaviour, fairly and freely

during the interregnum. Such assertions should not be fanciful.

17. In matters concerning delay in filing an appeal against ex parte

decree, the amount of delay is not crucial but what is relevant is

whether the appellant has shown 'sufficient cause' for the delay and

whether appellant was bona fide in prosecuting the suit. As the

shadows of delay enlarge the onus to explain the reasons to the

satisfaction of the Court is more rigid.

18. Paragraph Nos.2 and 3 in the affidavit filed in support of

I.A.No.1 of 2022, discloses that defendant has been in consistent

touch with his Lawyer. Therefore, it is not a case where defendant

could blame the Lawyer to overcome the inordinate delay caused in

filing application to set aside the ex parte decree. There is further

delay in preferring this appeal. On this delay, at any rate, he can not

blame that Lawyer. There is no explanation for further delay in

preferring this Appeal. He could not have waited for some more time

to prefer the appeal. It cannot be assumed that defendant was not

aware of the developments in the suit and need to file appeal.

Defendant wants to piggyback by blaming the lawyer for all his ills.

19. On going through the record, even ignoring the communication

dated 20.07.2018, the chronology of events preceding to passing

ex parte decree clearly point out that defendant himself to be blamed

for being negligent in not prosecuting the suit. As a litigant, it is the

primary duty of defendant to monitor the progress of the case and

attend to proceedings before the Court. After the case is disposed of

by trial Court, he should take steps to prefer Appeal immediately or

within a reasonable time, whereas applicant wakes up leisurely at his

convenience first to seek to set aside ex parte decree and then at

snails pace to file this Appeal.

20. In the facts of this case, it is clear that defendant has not

shown 'sufficient cause' to condone the delay and that defendant was

not prosecuting the suit and remedies bona fidely. It is evident from

his own averments in I.A.No.1 of 2022 that he has been in constant

touch with his Lawyer. Therefore, he cannot now try to blame the

Lawyer to gain sympathy from this Court. By his own failings, he has

allowed the rights crystallized in favour of the decree holder. He was

negligent in prosecuting the suit and lacks bona fides in his claim for

delay in filing this appeal.

21. Learned counsel for defendant seeks to assert that earlier

dismissal of C.R.P.No.772 of 2022 cannot come in the way of

consideration of application to condone the delay in filing appeal and

the same has to be independently considered. In support of said

contention, learned counsel placed reliance on decision of Hon'ble

Supreme Court in N.Madhu (supra).

22. We have gone through the decision in N.Madhu. It is no doubt

true that earlier dismissal of the application to condone the delay in

seeking to file application to set aside ex parte decree may not come

in the way of consideration of application to condone the delay in

preferring an appeal against the judgment and decree in the suit, but

in the instant case, reasons assigned by the defendant seeking

condonation of the delay in filing this appeal are the same reasons

which were asserted in the application for condonation of delay in

I.A.No.1264 of 2019 in O.S.No.287 of 2016 filed to set aside the

ex parte decree. The reasons assigned therein were considered by the

trial Court while dismissing I.A.No.1264 of 2019 against which

C.R.P.No.772 of 2022 was filed. In C.R.P.No.772 of 2022 same

contentions as urged before the trial Court were urged.

23. This Court on detailed consideration of the submissions and

legal position on the issue of condonation of delay in filing application

to set aside ex parte decree, dismissed the revision by order dated

17.6.2022. The order in C.R.P.No.772 of 2022 has become final and

the same is staring at the defendant. Except reiterating the same

grounds in this application, no new grounds are urged.

No explanation is offered for further delay in availing this remedy.

24. For the aforesaid reasons, we are not satisfied with the reasons

assigned by the defendant to condone delay of 569 days in preferring

the Appeal. Accordingly, I.A.No.1 of 2022 is dismissed. Consequently

Appeal Suit stands dismissed. Miscellaneous applications, if any

pending stand closed.

_____________________________ JUSTICE P.NAVEEN RAO

_____________________________ JUSTICE J.SREENIVAS RAO

Date: 24.11.2022 TVK/KKM

HON'BLE SRI JUSTICE P.NAVEEN RAO AND HON'BLE SRI JUSTICE J. SREENIVAS RAO

I.A.No.1 of 2022 and APPEAL SUIT No. 141 of 2022

Date: 24.11.2022

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