Oriental
Aroma Chemical Indus. Ltd. Vs. Gujarat Indisl. Devt. Corp.& ANR. [2010] INSC
151 (26 February 2010)
Judgment
IN THE
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal No.2075 of
2010 (Arising out of S.L.P. (C) No.10965 of 2009) Oriental Aroma Chemical
Industries Ltd. ...Appellant Versus Gujarat Industrial Development Corporation
...Respondents and another
G.S.
Singhvi, J.
1.
Leave granted.
2.
Whether the Division Bench of Gujarat High Court was justified in
condoning more than four years' delay in filing of appeal by the respondents
against judgment and decree dated 30.10.2004 passed by Civil Judge (Sr.
Division) Gandhinagar (hereinafter referred to as "the trial Court")
in Special Civil Suit No.32 of 2001 is the question which arises for
consideration in this appeal.
3.
The appellant was allotted a piece of land for setting up an
industrial unit at Ankleshwar subject to the terms and conditions embodied in
agreement of licence dated 2.4.1976 which, among other things, provided for
consumption of specified quantity of water by the appellant. The agreement also
provided for payment of 70% of the cost of agreed quantity of water
irrespective of consumption. In 1982, respondent No.1 demanded non utilization
charges amounting to Rs.4068/-, which were deposited by the appellant. After
some time, respondent No.1 demanded Rs.2,69,895/- towards water charges. For
next 10 years, the parties entered into long correspondence on the issue of
levy of water charges, etc. Finally, respondent No.1 issued bill dated
13.1.1996 requiring the appellant to pay Rs.22,96,207/- towards water charges.
The appellant challenged the same in Special Civil Suit No.32 of 2001. The
summons issued by the trial Court were duly served upon the respondents but no
written statement was filed on their behalf to controvert the averments
contained in the plaint and none appeared on the dates of hearing despite the
fact that the case was adjourned on more than one occasion. The suit was
finally decreed on 30.10.2004 and it was declared that the appellant is not
liable to pay Rs.22,96,207/- by way of minimum charges for water for the period
between 1978 and 16.4.2001 and, thereafter, till the water was supplied by
respondent No.1. After few months, the appellant filed another suit which was
registered as Civil Suit No.222 of 2005 and prayed that respondent 3 No.1 be
directed to issue no objection certificate in its favour. The summons of the
second suit were also served upon the respondents, but neither the written
statement was filed nor any one appeared on their behalf. The second suit was
also decreed on 12.12.2007 and respondent No.1 was directed to issue no
objection certificate to the appellant. In compliance of the decree passed in
the second suit, the concerned authority of the Corporation issued no dues
certificate dated 9.7.2008.
4.
After four months and fifteen days of taking action in furtherance
of the decree passed in the second suit, the respondents filed an appeal
against judgment and decree dated 30.10.2004 passed in Special Civil Suit No.32
of 2001. They also filed an application under Order 41 Rule 3A of the Code of
Civil Procedure read with Section 5 of the Limitation Act for condonation of
delay by making the following assertions:
"1.
That this appeal is preferred against the judgment and decree of the learned
Civil Judge (SD), Gandhinagar passed on 30.10.2004. That the suit was filed for
permanent injunction and declaration and on the ground that the advocate of the
GIDC has appeared but no written statement was filed and, therefore, the
learned Judge resorted to Order 8 Rule 11 of the Civil Procedure Code and
granted the declaration as prayed for in the plaint. That after the decree
being passed, the present plaintiff filed another suit being Civil Suit No.222
of 2005 and in which the decree was passed on 12.12.2007. That particular
decree is to be challenged before this Honourable Court and, therefore, in
2008, after the second decree was passed, it was brought to the notice of the
Legal Department as well as to the Executive Engineer at GIDC, Ankleshwar as to
how this has happened and it seems that because of numerous transfers as well
as it is also 4 possible that the party might have arranged or joined hands
with some employee of the Corporation and thereby after engaging advocate, no
body has gone to the advocate for the purpose of giving instruction or filing
the written statement and as a result thereof, decree is passed and only in the
month of January/February, the law department came to know and therefore, an
inquiry was made into the matter but the GIDC could not trace out as to at
whose hands the mistake or mischief was done, however, when after inquiry
everything was noticed and, therefore, the application for certified copy was
made on 17.11.2008 and on 18.11.2008, the copy was ready and the same was sent
to the advocate and thereafter the present appeal is preferred.
2. That a
long span from 30.10.2004 to 18.11.2008, practically four years time is passed
and this has happened only because of some mistake or mischief on the part of
the staff and, therefore, the appeal could not be preferred, otherwise it is a
matter of substantial right of the GIDC where the water charges are leveled in
spite of water being used or not and when the bills were already drawn, there
was not intention on the part of the GIDC not to contest the suit. But it is
difficult to trace out how this has happened and, therefore, when the inquiry
was conducted in detail, the facts were brought to the notice and on that basis
the cause has arisen to file this appeal and the delay of 1067 days cause in
filing the appeal is required to be condoned in the interest of justice."
On
notice, a detailed reply was filed on behalf of the appellant in the form of an
affidavit of its Director, Shri Sanjay Kantilal Shah, paragraphs 4.16, 5 and 6
whereof read as under:
"4.16.
That the First Appeal preferred by the appellant has been preferred with Civil
Application No.14201 of 2008 and the said application for condonation of delay
under Order 41 Rule (3A) read with Section 5 of the Limitation Act. As a matter
of fact, the petitioner company being a Government Corporation is bound to
follow the rules and regulations as it is and cannot deviate itself from the
provisions of law. As a matter of fact in filing the present First Appeal there
is a delay of more than 4 years. Moreover, in the second suit, the 5 decree and
judgment is already passed and thereafter now the petitioner has no right to
challenge the order of the Civil Suit No.32/2001. But for the reasons best
known to the appellant the correct number of days has not been mentioned in the
condonation of delay application. As a matter of fact, the petitioner being a
Government Corporation has to follow the rules and regulations strictly and is
required to give proper explanation as to why the Appeal has not been preferred
within the time frame and if they were so, being aggrieved by the order passed
by the Ld. Civil Judge (SD) Gandhinagar. If the condonation of delay is taken
into consideration the said page is only a 4 pages wherein no proper
explanation as to what the petitioner was doing for the past year has been
given in the said and thereby also the said application is required to be
dismissed in limine.
5.
With regard to para -1 of the Civil Application, I most humbly and
respectfully submit that it is true that the decree passed by the Ld. Civil
Judge (S.D) Gandhinagar on 13.10.2004. It is also true that in the said Suit,
the advocate for the GIDC had appeared but had not filed written statement and
therefore, the Ld. Judge has passed the order under the provisions of the Code
of Civil Procedure and granted declaration as prayed for in the plaint. It is
also true that after decree was passed, the present respondent filed another
suit being Civil Suit No.222/2005 and the said decree was passed on 12.12.2007.
It is not true that in the year 2008 after the second decree was passed it was
brought to the knowledge of the Legal Department that the earlier decree was
required to be challenged. Lack of legal knowledge cannot be said to be ground
to condone the delay. If the facts had not been brought well in time then for
the said it cannot be said that the respondent company is required to be
punished. As a matter of fact nothing has been mentioned on Affidavit as to who
did not give proper instructions or as to who had possibly played the mischief
and as to who had joined the hand with the respondent company. It is only the
blame game which is being played and allegations are being leveled in order to
save its own skin but there is no truth behind the facts mentioned therein and
thereby there is no way as to how the present application can ever be allowed.
Moreover the respondent is not knowing any persons of the G.I.D.C. (as on today
or at any time).
6.
With regard to para-2 of the Civil Application, I most humbly and
respectfully say and submit that it is true that more than 4 years time has
been passed from the date of the decree but as to who has played the mischief
or mistake or had it been intentionally filed within the time frame that is for
the reasons best known to the appellant corporation and that is something on
which the petitioner company would not like to comment at this juncture. No
proper justification or explanation has been brought on record as to what was
happening for the past 4 years, has also not given anything in detail and
neither true and correct facts have been mentioned nor the calculation in
respect of the days have been made properly and thereby also on all the said
counts, the present application is required to be dismissed with exemplary
cost."
5. The
Division Bench of the High Court referred to the judgments of this Court in
State of Bihar and others v. Kamleshwar Prasad Singh and another, 2000 AIR SC
2388, N. Balakrishnan v. M. Krishnamurthy, JT 1998 (6) SC 242, State of Haryana
v. Chandra Mani and others AIR 1996 SC 1623, Spl. Tehsildars, Land Acquisition,
Kerala v. K.V. Ayisumma AIR 1996 SC 2750, Punjab Small Industries and Export
Corporation Ltd. and others v. Union of India and others 1995 Suppl.
(4) SCC
681, P.K. Ramachandran v. State of Kerala and another (1997) 7 SCC 566 and
Collector, Land Acquisition, Anantnag v. Mst. Katiji AIR 1987 SC 1353 and
condoned the delay by making a cryptic observation that the cause shown by the
respondents is sufficient. The relevant portion of the High Court's order is
reproduced below:
"Applying
the principles laid down by the Supreme Court to the facts of the present case,
we are satisfied that sufficient cause 7 is made out by the applicant for
condonation of delay. Over and above, in view of the fact that reasons
mentioned in this application have not been controverted by the other side and
also in view of the principles governing the discretionary exercise of power
under Section 5 of the Limitation
Act, 1963, we are of the view that sufficient cause
has been stated for not filing the appeal in time and hence, delay caused in
filing appeal is to be condoned and the application is required to be
allowed."
(Emphasis
supplied)
7.
Shri L.N. Rao, learned senior counsel appearing for the appellant
argued that the impugned order is liable to be set aside because the High Court
allowed the application for condonation of delay by erroneously assuming that
the delay was of 1067 days only. Learned senior counsel pointed out that appeal
against judgment and decree dated 30.10.2004 was filed on 24.11.2008 i.e.,
after more than four years, but by scoring out the figures and words "4
years and 28" in paragraphs 2 and 3 of the application and substituting
the same with figure "1067", the respondents misled the High Court in
believing that delay was of 1067 days. He then referred to affidavit dated
16.2.2009 of Shri Sanjay Kantilal Shah to show that substantial grounds had
been put forward on behalf of the appellant for opposing the respondents'
prayer for condonation of delay of more than four years and submitted that the
Division Bench of the High Court committed serious error in condoning the delay
by assuming that no reply had been filed by the appellant. Learned senior
counsel also invited the Court's attention to affidavits dated 25.11.2009 and
4.2.2010 of Shri Pravin 8 Keshav Lal Modi and Shri Harishbhai Patel
respectively filed in this Court on behalf of the respondents as also the list
of events attached with the second affidavit to show that the functionaries of
respondent No.1 were very much aware of the proceedings of Special Civil Suit
No.32 of 2001 and Civil Suit No.222 of 2005 and submitted that the High Court
should not have accepted patently incorrect assertions contained in the
application for condonation of delay, which was supported by an affidavit of
none else than the General Manager of respondent No.1, Shri R.B. Jadeja, that
the Law Department came to know about the judgment of Special Civil Suit
No.32/2001 only in January/February, 2008.
8.
Shri Anip Sachthey, learned counsel for the respondents fairly
admitted that the appeal was filed after lapse of more than four years of
judgment dated 30.10.2004 but submitted that this Court should not interfere
with the discretion exercised by the High Court to condone the delay and the
respondents should not be penalized simply because the advocates appointed by
the Corporation did not bother to file written statement and appear before the
trial Court on the dates of hearing.
Learned
counsel emphasized that this Court has repeatedly taken cognizance of the
lethargy and callousness with which litigation is conducted on behalf of the
State and its agencies/instrumentalities at various levels and condoned the
delay so as to enable them to contest the 9 matters on merit and submitted that
similar approach may be adopted in the present case and the appellant may be
compensated by award of adequate cost.
8. We
have considered the respective submissions. The law of limitation is founded on
public policy. The legislature does not prescribe limitation with the object of
destroying the rights of the parties but to ensure that they do not resort to
dilatory tactics and seek remedy without delay.
The idea
is that every legal remedy must be kept alive for a period fixed by the
legislature. To put it differently, the law of limitation prescribes a period
within which legal remedy can be availed for redress of the legal injury. At
the same time, the courts are bestowed with the power to condone the delay, if
sufficient cause is shown for not availing the remedy within the stipulated
time. The expression "sufficient cause" employed in Section 5 of the
Indian Limitation
Act, 1963 and similar other statutes is elastic
enough to enable the courts to apply the law in a meaningful manner which sub
serves the ends of justice. Although, no hard and fast rule can be laid down in
dealing with the applications for condonation of delay, this Court has
justifiably advocated adoption of a liberal approach in condoning the delay of
short duration and a stricter approach where the delay is inordinate -
Collector, Land Acquisition, Anantnag v. Mst. Katiji (1987) 2 SCC 107, N.
Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123 and 10 Vedabai v. Shantaram
Baburao Patil (2001) 9 SCC 106. In dealing with the applications for
condonation of delay filed on behalf of the State and its
agencies/instrumentalities this Court has, while emphasizing that same
yardstick should be applied for deciding the applications for condonation of
delay filed by private individuals and the State, observed that certain amount
of latitude is not impermissible in the latter case because the State
represents collective cause of the community and the decisions are taken by the
officers/agencies at a slow pace and encumbered process of pushing the files
from table to table consumes considerable time causing delay - G. Ramegowda v.
Spl. Land Acquisition Officer (1988) 2 SCC 142, State of Haryana v. Chandra
Mani (1996) 3 SCC 132, State of U.P. v. Harish Chandra (1996) 9 SCC 309, State
of Bihar v. Ratan Lal Sahu (1996) 10 SCC 635, State of Nagaland v. Lipok Ao
(2005) 3 SCC 752, and State (NCT of Delhi) v. Ahmed Jaan (2008) 14 SCC 582.
9.
In the light of the above, it is to be seen whether the
respondents had offered any plausible/tangible explanation for the long delay
of more than four years in filing of appeal and the High Court was justified in
condoning the delay.
10.
A reading of the impugned order makes it clear that the High Court
did make a bald reference to the application for condonation of delay filed 11
by the respondents but allowed the same without adverting to the averments contained
therein and the reply filed on behalf of the appellant.
Not only
this, the High Court erroneously assumed that the delay was of 1067 days,
though, as a matter of fact, the appeal was filed after more than four years.
Another erroneous assumption made by the High Court was that the appellant had
not filed reply to controvert the averments contained in the application for
condonation of delay. It may have been possible for this Court to ignore the
first error in the impugned order because by deleting the figures and words
"4 years and 28" in paragraphs 2 and 3 of the application and
substituting the same with the figure 1067, the respondents misled the High
Court in believing that the delay was of 1067 days only but it is not possible
to fathom any reason why the Division Bench of the High Court omitted to
consider the detailed reply which had been filed on behalf of the appellant to
contest the prayer for condonation of delay. Notwithstanding this, we may have
set aside the impugned order and remitted the case to the High Court for fresh
disposal of the application filed by the respondents under Section 5 of the Limitation Act but, do not consider it proper to adopt that course,
because as will be seen hereinafter, the respondents did not approach the High
Court with clean hands.
11.
The statement containing the list of events annexed with the
affidavit of Shri Harishbhai Patel shows that before filing suit, the appellant
had issued notice dated 5.2.2001 to which respondent No.1 sent reply dated
13.3.2001. The summons of Special Civil Suit No. 32/2001 instituted by the
appellant were served upon the respondents sometime in the month of April/May
2001. On 16.5.2001, General Manager (Law) instructed Ms. Rekhaben M. Patel to
appear on behalf of the respondents. Executive Engineer, Ankleshwar was also
directed to contact the advocate for preparing the reply affidavit. On
23.5.2001, Deputy Executive Engineer, Ankleshwar forwarded the comments to Ms.
Rekhaben M. Patel. On 18.4.2002, the appellant filed an application for ex
parte proceedings against the respondents. On 30.11.2002, the trial Court
directed the respondents to appear on 12.12.2002 with indication that if they
fail to do so, ex parte proceedings will be held. Thereupon, General Manager
(Law) wrote letter dated 10.12.2002 to Ms. Rekhaben to remain present on the
next date of hearing i.e., 12.12.2002. On 30th December, 2002, Deputy Executive
Engineer, Ankleshwar wrote to the advocate in the matter of submission of
para-wise comments. On 2.1.2003, the Executive Engineer is said to have sent a
letter to the advocate informing her about the next date of hearing i.e.,
10.1.2003 and asked her to remain present. After almost one year and ten
months, the trial Court pronounced the ex parte judgment and decreed the suit.
The summons of the second suit were 13 received sometime in May, 2005. On
20.6.2005, Shri B.R. Sharma, Advocate was instructed to appear on behalf of the
respondents. On 10.1.2006, Deputy Executive Engineer, Ankleshwar informed the
new advocate about the next date of hearing which was 23.1.2006. The second
suit was decreed on 12.12.2007.
12.
During the course of hearing, learned counsel for the respondents
fairly conceded that in the second suit filed by the appellant there was a
specific mention of decree dated 30.10.2004 passed in Special Civil Suit No.
32/2001. He also conceded that even though the first suit remained pending
before the trial Court for three years and five months and the second suit
remained pending for more than two years, none of the officers of the Law
Department or the Engineering Department of respondent No.1 appeared before the
Court.
From what
we have noted above, it is clear that the Law Department of respondent No.1 was
very much aware of the proceedings of the first as well as the second suit. In
the first case, Ms. Rekhaben M. Patel was appointed as an advocate and in the
second case Shri B.R. Sharma was instructed to appear on behalf of the respondents,
but none of the officers is shown to have personally contacted either of the
advocates for the purpose of filing written statement and preparation of the
case and none 14 bothered to appear before the trial Court on any of the dates
of hearing. It is a matter of surprise that even though an officer of the rank
of General Manager (Law) had issued instructions to Ms. Rekhaben M. Patel to
appear and file vakalat as early as in May 2001 and Manager (Law) had given
vakalat to Shri B.R. Sharma, Advocate in the month of May 2005, in the
application filed for condonation of delay, the respondents boldly stated that
the Law Department came to know about the ex parte decree only in the month of
January/February 2008. The respondents went to the extent of suggesting that
the parties may have arranged or joined hands with some employee of the
corporation and that may be the reason why after engaging advocates, nobody
contacted them for the purpose of giving instructions for filing written
statement and giving appropriate instructions which resulted in passing of the
ex parte decrees. In our view, the above statement contained in para 1 of the
application is not only incorrect but is ex facie false and the High Court
committed grave error by condoning more than four years' delay in filing of
appeal ignoring the judicially accepted parameters for exercise of discretion
under Section 5 of the Limitation
Act.
13.
In the result, the appeal is allowed. The impugned order of the
High Court is set aside and the application for condonation of delay filed by
the respondents is dismissed. As a corollary, the appeal filed by the 15
respondents against judgment and decree dated 30.10.2004 shall stand dismissed
as barred by time. However, it is made clear that the disposal of this appeal
shall not absolve the higher functionaries of respondent No.1 from the
responsibility of conducting a thorough probe into the matter so that
accountability of the defaulting officers/officials may be fixed and the loss,
if any, suffered by respondent No.1 recovered from them after complying with
the rules of natural justice.
......................................J. [G.S. Singhvi]
......................................J. [Asok Kumar Ganguly]
New Delhi,
Dated: February 26, 2010.
Back
