Madhya Pradesh High Court
Madhya Pradesh Road Development ... vs M/S Vindhyachal Expressway Pvt. Ltd. on 28 February, 2024
Author: Sujoy Paul
Bench: Sujoy Paul
1
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
JUSTICE SUJOY PAUL
&
SHRI JUSTICE VIVEK JAIN
ARBITRATION APPEAL No. 308 of 2023
BETWEEN:-
1. MADHYA PRADESH ROAD DEVELOPMENT
CORPORATION LTD. REGISTERED OFFICE AT 45-
A ARERA HILLS, BHOPAL 4 6 2 0 11 (MADHYA
PRADESH)
2. MINISTRY OF ROAD TRANSPORT AND
HIGHWAYS REGIONAL OFFICE AT 2ND FLOOR,
NIRMAN BHAWAN, ARERA HILLS, BHOPAL 462011
(MADHYA PRADESH)
.....APPLICANTS
(BY SHRI MANOJ MUNSHI - ADVOCATE WITH SHRI SWASTIK SINGH,
SHRI HIRDESH GUPTA AND SHIR AKSHAY JHA - ADVOCATES FOR THE
APPELLANTS)
AND
M/S VINDHYACHAL EXPRESSWAY PVT. LTD.,
REGISTERED OFFICE At; A-104 SHAPATH -4 OPPOSITE
KARNAVATI CLUB S.G. ROAD AHMADABAD (GUJARAT)
.....RESPONDENT
(BY SHRI RAVINDRA SHRIVASTAVA - SENIOR ADVOCATE WITH SHRI
SUNIL MITTAL, SHRI AKSHAY SAPRE, SHRI NILAVA BANDOPADHYAY,
SHRI SAHIL SONKUSALE, SHRI YOGESH DALAL, MS. SANYA SHUKLA, MS.
KRATI DUBEY AND SHRI DEEPESH JOSHI - ADVOCATES FOR THE
RESPONDENT)
-----------------------------------------------------------------------------------------------------------
Reserved on : 21/02/2024
Pronounced on : 28/02/2024
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This appeal having been heard and reserved for order, coming on for
Signature Not Verified
Signed by: RAJESH KUMAR
JYOTISHI
Signing time: 2/28/2024
5:25:45 PM
2
pronouncement this day, Shri Justice Vivek Jain passed the following:-
ORDER
The present appeal has been filed calling into question the order dated 03.11.2023 passed by the Commercial Court, District Bhopal.
2. The factual matrix of the case in brief is that certain disputes arose in a contract executed between the present respondent and the appellant No.2. The appellant No.1 was a nodal agency for execution of the said contract. Appellant No.1 - M.P. Road Development Corporation is a instrumentality of the State of M.P. and appellant No.2 is Ministry of Road Transport and Highways, Government of India.
3. The dispute arising between the parties were referred to an Arbitration Tribunal consisting of three members. The arbitral award was passed on 14.01.2023 to the tune of Rs.294.00 crore (wrongly mentioned in impugned order passed by the Commercial Court as 3.88 crore). The said award was challenged by the present appellants before the Commercial Court, Bhopal in terms of Section 34 of Arbitration and Conciliation Act, 1996. The application under Section 34(1) was filed before the Commercial Court on 10.05.2023 and it was registered on 11.05.2023. Thus, it is admitted between the parties that the application was filed after a period of three months and 27 days from the date of receipt of copy of award by email on 14.01.2023. Thus, admittedly, the application under Section 34 (1) was filed by the present appellant before the Commercial Court with the delay of 27 days.
4. As per Section 34 (3) of Arbitration and Conciliation Act, 1996 (for short referred to as 'Act of 1996') special limitation is prescribed for submitting application for setting aside award, which is three months and as per proviso to Section 34(3), it has been provided that the Court may entertain the application Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 3 within a further period of 30 days, but not thereafter.
5 . T he present appellants had submitted an application under Section 34(3) for condonation of delay of 27 days, which was within the condonable period of 30 days as laid down under Section 34(3) of Act of 1996.
6. The said application was contested by the present respondent and the Commercial Court vide impugned order dated 03.11.2023 has rejected the application under Section 34(3) on the ground that day to day explanation has not been offered for the delay and therefore, the delay cannot be condoned. Resultantly, the application under Section 34(1) seeking to challenge the award has also been rejected.
7. Learned counsel for the appellant has stated that the monetary value of the award is Rs.294.00 crore and the delay was only 27 days, which was within the condonable period of 30 days. Therefore, the Commercial Court should not have scuttled the challenge made to award in such a manner and the appellants challenge to the said award was liable to be considered on merits.
8. It is further submitted that due explanation was offered in application under Section 34 (3) of Act of 1996, but the Commercial Court has wrongly rejected the said application on irrelevant considerations.
9. Learned counsel for the appellant by referring to the application under Section 34(3) filed before the Commercial Court has submitted that the contract was in the matter of concession agreement dated 25.01.2012 for development of four laning of Rewa to MP/UP Border Section of NH-7 Project on BOT basis in the State of M.P. The work was awarded by the Ministry of Road Transport and Highways, Government of India ('MoRTH' for short) and the appellant No.1, which is a instrumentality of State of M.P., was the executing nodal agency.
Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 410. It is further submitted that the award allowing the claims of present respondent to the tune of Rs.294.00 crore was passed by the Arbitral Tribunal on 14.01.2023, which was received by email on 14.01.2023. Thus, the limitation to challenge the award was till 13.04.2023, which is when the period of three months ended. It is submitted that delay was caused due to administrative exigencies, because there were many changes in the position of Managing Director of the appellant No.1, which was the main contestant in the case. Appellant No.1 being Nodal Agency of appellant No.2 for this contract, had sought administrative approval of MoRTH vide letter dated 27.01.2023 to file the application under Section 34 of Act of 1996 for setting aside the award dated 14.01.2023. Reminder was sent on 15.02.2023 for the same purpose and the MoRTH finally give their consent on 21.02.2023. Thereafter, the appellant No.1 vide its letter dated 24.03.2023 and 12.04.2023 also sought approval for appointment of Advocate and his fees schedule and got approval from MoRTH vide letter dated 26.04.2023.
11. The case file was running in almost 3000 pages and some time was taken by the Advocate to study the huge set of documents and thereafter, the matter was forwarded to legal cell of the appellants for their study. After getting final approval and vetting the contents of application, the legal department of appellants had forwarded back the draft of application with instructions to the Advocate to file the same at the earliest. Therefore, the petition was made on 09.05.2023 and filed on 10.05.2023, which is with the delay of 27 days after expiry of three months from the date of receipt of copy of award.
12. Learned counsel for the appellants further submits that the appellant No.1 is an instrumentality of the State and appellant No.2 is the Government of Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 5 India itself. The manner of construing delay in cases of State are on different footings as compared to that of the private litigants. The State and its instrumentality functions through impersonal machinery, which usually takes some more time as compared to the time taken by a private litigant to take such type of decision. Learned counsel for the appellants further stated that the explanation offered by the appellants was not excuse, but it was in fact explanation. It is argued that it was thought appropriate that the appellant No.1 being Nodal Agency of the contract should challenge the award along with the appellant No.2, which would be in the best interest of the appellants.
13. Getting approval of the same, getting approval of the Advocate and getting approval for payment of fees were three different events, which were to be settled between the appellant Nos.1 and 2 and this process took sometime. Thus, it is stated that the explanation offered by the present appellants duly narrated sufficient cause for such delay, which ought to have condoned.
14. Learned for the appellants has relied on the following judgments in support of his contentions:-
i. Chintnels India Limited vs. Bhayana Builders Private Limited (2021) 4 SCC 602.
ii. Union of India vs. Popular Construction Co. (2001) 8 SCC 470. iii. Mahindra and Mahindra Financial Services Limited vs. Maheshbhai Tinabhai Rathod and others (2022) 4 SCC 162. iv. Collector, Land Acquisition Anantnag and another vs. Ms. Katiji and others (1987) 2 SCC 107.
v. Ramlal, Motilal and Chhotelal vs. Rewa Coalfields Ltd., AIR 1962 SC 361.
vi. State of Haryana vs. Chandra Mani and others (1996) 3 SCC 132. vii. Haryana Urban Develpment Authority, Karnal vs. Mehta Construction Company and another (2022) 5 SCC 432.
Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 615. Lastly, it is contended by the learned counsel for the appellants that the respondent should not be shy of contesting the matter on merits before the Commercial Court and as huge stakes of Government to the tune of Rs.294.00 crore are involved in the matter, it is in public interest that the delay should be condoned and the matter be contested on merits.
16. Sounding a contrary note, learned Senior Counsel appearing for the respondent has argued that the considerations available to condone delay under Section 5 of Limitation Act are not relevant for the purpose of condoning the delay under Section 34(3) of the Act of 1996. Highlighting the stricter language employed in Section 34(3) of the Act of 1996, it is argued by learned counsel for the respondents that the consideration under Section 5 of the Limitation Act is that the applicant should satisfy the Court that he had sufficient cause for not preferring the appeal or application within the prescribed limitation period. On the contrary, the language employed in proviso to Section 34(3) is "prevented by sufficient cause". Thus, it is contended that by stronger language used by the legislature, which is in consonance with the purpose for which the Act of 1996 has been enacted, i.e. to ensure speedy disposal of commercial disputes.
17. It is further submitted by learned Senior Counsel that the office of appellant No.1 is located at Bhopal while Regional Office of MoRTH is also located at Bhopal and both are in the same locality. Thus, the appellants cannot rely on red-tapism to seek condonation of delay of 27 days.
18. It is further submitted by learned Senior Counsel for the respondent that delay is not required to be explained only from 13.04.2023 till 10.05.2023, but also from the very first date from 14.01.2023 when the award was passed. It is argued by learned Senior Counsel that diligency and seriousness of the Signature Not Verified appellants should flow from the very first date on which award was Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 7 communicated.
19. Learned Senior Counsel for the respondent further submits by referring to document Annexure A-8 that the Ministry had given concurrence to challenge the arbitration award by appellant No.1 on behalf of both the appellants on 21.02.2023 itself, but despite that the appellants did not take urgent steps to file application under Section 34(1). Thus, it is a sheer case of lethargy and no explanation has been offered by the appellants, rather it is an excuse. Learned Senior Counsel has argued at length that 'excuse' differs from an 'explanation' and the State instrumentality is not at liberty to create and project excuses. Rather they should be more vigilant and should come out with explanations. The present case, it is argued, is utterly devoid of any explanation.
20. It is further argued by learned Senior Counsel that the latest judicial trend is that no special privilege should be granted to the State instrumentality in the matter of condonation of delay and they should be treated at par with a private litigant in the matter of condonation of delay. Learned Senior Counsel has relied on the judgment of the Hon'ble Supreme Court in the case of State of M.P. v. Bherulal, (2020) 10 SCC 654 and Sheo Raj Singh v. Union of India, (2023) 10 SCC 531.
21. Learned Senior Counsel further argued at length that to demonstrate the meaning and import of stricter language employed in Section 34(3) by the using the word "prevent". Learned Senior Counsel has referred to various dictionaries and legal glossary to bring home his argument that the word prevent means some action that actually prevented someone from acting to do some act. Thus, it must be some act of hindering or impeding a process. Administrative delays, it is argued, is not an act of hindrance, but it is part of Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 8 process. Thus, administrative correspondence and communications cannot be taken to be an act, which "prevent" a State instrumentality from seeking challenge to the award within the time limit of three months.
22. It is further argued by learned Senior Counsel that days to day delay has to be explained and the present appellants have failed to explain day to day delay before the Commercial Court. Thus, the appellants cannot be given any premium for their own lethargy and inactions.
23. Learned Senior Counsel has also argued that expiry of limitation period invests invaluable right in the party in whose favour of the decree or order is made. Thus, condonation of delay brings to life an extinguished right. Thus, the Court should be slow in condonation of delay, even if it is for a short period of 27 days. It is argued by learned Senior Counsel that the award has become enforceable upon expiry of three months and the appellants just want to deny the fruits of the award to the respondent by making a belated challenge to the award, which cannot be countenanced.
24. Learned Senior Counsel for the respondent has relied on the following judgments in support of his submissions :-
"i. Ministry of Youth Affair and Sports, Department of Ports Government of India vs. Ernst and Young Pvt. Ltd. 2023 SCC OnLine Del 5182.
ii. P. Radha Bai and others vs. P. Ashok Kumar and another (2019) 13 SCC 445.
iii. A.G. Aerovision Electronics Pvt. Ltd. vs. Tata Capital Financial Services Ltd. 2018 SCC OnLine Del 10825.
iv. Simplex Infrastructure Ltd. vs. Union of India (2019) 2 SCC 455. v. Wander Ltd. and another vs. Antox India Pvt. Ltd. 1990 (Supp) SCC 727.
vi. State of Himachal Pradesh vs. Himachal Techno Engineers Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 9 (2010) 12 SCC 210.
vii. Mahindra and Mahindra Financial Services Limited vs. Maheshbhai Tinabhai Rathod and others (2022) 4 SCC 162. viii. Union of India vs. Popular Constructions Co. (2001) 8 scc 470. ix. Oil and Natural Gas Corporation Ltd. vs. Join Venture of Sai Rama Engineering Enterprises (Sree) and Megha Engineering and Infrastructure Ltd. (Meil) 2019 SCC OnLine Del 10456. x. State of Uttar Pradesh and ors. Satish Chand Shivhare and Brothers 2022 SCC OnLine SC 2151.
xi. The Secretary/Chief Commissioner Transport Department vs. M/s Gaurav Enterprises through its partner OMP (COMM) 351/2017 (Delhi High Court) xii. State of M.P. vs. Bherulal (2020) 10 SCC 654."
25. Heard learned counsel for the parties and perused the record.
26. The question that arises for consideration in the present appeal is whether the appellant herein had made out a case for condonation of delay of 27 days and whether the Commercial Court was correct in taking the view that the delay of 27 days in filing application under Section 34 of the Act of 1996 which was within the statutory limit of 30 days was not properly explained.
27. Learned counsel for the appellant has argued at length to submit that time was spent in inter office correspondence and also due to the fact that appellant No. 1 was Nodal Agency of the project while the appellant No. 2 i.e. Union of India, MoRTH was the actual agency that has awarded the contract to the present respondent. The time was spent in arriving at consensus between the parties to make a common challenge to the award before the Commercial Court in terms of the Section 34 of the Act of 1996.
28. Upon perusal of the application for condonation of delay filed before the Commercial Court as well as the documents that were brought on record before the Commercial Court and are on record before this Court also Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 10 with the memo of appeal, following facts emerges:-
( a ) The award was passed on 14.01.2023 which seems to have been communicated to the appellants on that date itself by email. The limitation was thus admittedly upto 13.04.2023.
(b) The appellant No. 1 made a request to the appellant No. 2 to give its concurrence to file application under Section 34 of the Act of 1996 vide letter dated 27.01.2023. By this letter it was pointed out to the MoRTH that appellant No. 1 is the authority acting for and on behalf of MoRTH as per the concession agreement and this permission is required for further necessary action. This letter is brought on record as Annexure A/6.
(c) By letter dated 15.02.2023 (Annexure A/7), the appellant No. 1 submitted a reminder to the MoRTH.
(d) Vide letter dated 21.02.2023 (Annexure P/8) the MoRTH informed the appellant No. 1 that the competent authority in the Ministry has given concurrence to challenge the award by appellant No. 1 on behalf of appellant No. 1 as well as MoRTH.
(e) Thereafter, a letter dated 24.03.2023 was sent by the appellant No. 1 to the appellant No. 2 proposing the name of counsel to be appointed and also the fees being claimed by the said counsel and approval was sought from the MoRTH because the financial liability was to fall on MoRTH. This letter is Annexure A/9.
(f) Vide letter dated 12.04.2023, a reminder was sent to MoRTH by the appellant No.1.
(g) By letter dated 26.04.2023 the Regional Officer of MoRTH located at Bhopal, after obtaining approval of competent authority in the Ministry approved the fees payable to the Advocate as claimed by him.
2 9 . It is the contention of the appellant that after the Ministry at New Delhi approved the fees schedule of the Advocate, the appellant No. 1 instructed the Advocate to file application under Section 34 of the Act of 1996 and the Advocate was required to study the case papers running into 3000 pages which took time and thereafter the draft was vetted by the legal department and then application under Section 34 was filed on 10.05.2023 and Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 11 the delay is natural and not something which can be said to be an excuse and not an explanation.
30. Learned counsel for the appellants has also stated that the final approval letter issued by MoRTH clearly mentioned that it has been issued after obtaining approval of competent authority of the Ministry. It is contended that the Regional Officer had to obtain approval of competent authority of the Ministry located at New Delhi and then the Regional Officer communicated approval to the appellant No. 1 on 26.04.2023. The aforesaid facts clearly show that on the date, the limitation expired i.e. on 13.04.2023, a reminder was pending before the MoRTH to give approval to fee schedule which had been submitted to MoRTH on 24.03.2023. MoRTH approved the fee schedule and communicated the fact of approval vide letter dated 26.04.2023. Thus, after expiry of limitation period the delay can be divided into two spells i.e. from 13.04.2023 till 26.04.2023 which is period for which approval was pending before MoRTH and second spell from 26.04.2023 till 10.05.2023 which was the time spent in study of the case, preparation of application and filing of the same.
31. It has been vehemently argued by the counsel for respondent that there was no legal requirement for both the appellants to arrive at a consensus to challenge the award together. The appellant No. 1 could have challenged the award on its own without waiting for consent of the Ministry.
32. In the opinion of this Court, it is for the party or parties to the lis to decide to challenge the award by filing a joint application or filing separate application. The appellant no. 1 was only a nodal agency of the project which has been awarded by appellant No. 2. If the appellant No. 1 felt that in absence of challenge to award by appellant No. 2, its application would not be effective, Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 12 such a logic and reasoning adopted by the appellant No. 1 cannot be said to be something which may dis-entitle the appellants from challenging the award as some time was spent in arriving at consensus.
33. The facts of the case show that the time which was spent was the time spent in arriving at a consensus to challenge the award jointly and in approval of the professional fees claimed by Advocate which was submitted to the appellant No. 1 and then sent for approval to appellant no. 2. As discussed above, the challenge to award by the appellant No. 1 without there being challenge by appellant no. 2 would not have made the challenge by appellant no. 1 alone effective. Thus, if to make an effective challenge to award, some time was spent in arriving at an consensus, it cannot be said to be an excuse. It appears to be a sufficient cause in terms of proviso to Section 34 (3) of the Act of 1996.
34. It has been argued at length that the language employed in Section 34(3) is "prevent" which is stricter language than the language employed in Section 5 of Limitation Act. Thus, it has been argued at length that the Commercial Court was justified in rejecting the application for condonation of delay because what has been shown by the appellants as sufficient cause, is not cause but excuse. It has been argued that the word "prevent" is stricter and it required stricter standard for condonation of delay.
35. The learned senior counsel for the respondent has argued that the factum of approval etc. is not a event which "prevented" the appellants from challenging the award. In the opinion of this Court the word "prevent" does not mean only obstruction by physical force. "Prevent" may be something which may hinder or impede or stop happening of any event. As has already held Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 13 above, the time spent at arriving at consensus was something which was bona fide and thus it can be said to be a sufficient cause which prevented the appellants from making an application within the prescribed limitation of three months.
36. It has been argued that the appellant No. 1 could have appointed an Advocate even in anticipation of approval of the fees from the appellant No. 2. Upon perusal of the record, it is clearly evident that the appellant No. 1 had sent the same for approval to appellant No. 2 because MOU dated 30.09.2009, fees of the Advocate is to be borne and approved by MoRTH and this fact was being pointed out by appellant No.1 to appellant No. 2. The appellant No. 1 could not have incurred liability which was to be borne by the appellant No. 2 without its consent. Advocate cannot be expected to proceed ahead without settling the professional fee and thus, these facts also make out sufficient cause preventing filing of application to challenge the award.
37. So far as the time spent after final approval dated 26.04.2023 is concerned, it is mentioned in the application for condonation of delay filed before the Commercial Court that the Advocate was supplied case papers running into 3000 pages and after studying the case file and other documents, the application was prepared on 08.05.2023 which was forwarded to the legal cell of the appellant for study. After the same was vetted and approved by legal cell of the appellants, the draft was forwarded to the concerning Advocate at the earliest and it was filed on 10.05.2023. Thus, the delay of 12 days is on account of the Advocate going through 3000 pages of case material and preparing the application.
38. Stake in this case is very high to the extent of Rs. 294.00 crores. An Advocate is expected to apply the best of his professional wisdom in drafting a Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 14 pleading and to take all possible grounds and narrate all relevant facts in drafting the pleading. If the Advocate took 12 days time to study the case papers running into 3000 pages, find out the relevant facts and to arrive at grounds to be taken by applying his professional wisdom and then drafting the application, 12 days time cannot be said to be a time spent which is excessive.
39. It has been argued by learned senior counsel for respondent that no premium can be given to the instrumentality of the State for delay caused by red-tapism in legal matters. Learned counsel for the respondent has argued at length that Government Agencies and instrumentalities are not entitled for any special limitation and special treatment in the matter of limitation just to protect their red-tapism.
40. Learned counsel has relied upon the judgment of Hon'ble Apex Court in the case of Simplex Infrastructure Ltd. Vs. Union of India reported in (2019) 2 SCC 455. In the said case it has been held that the Court could not have condoned the delay of 514 days on account of administrative correspondence and obtaining approval. However, upon perusal of the para 20 of this judgment, it is evident that the said case is one of condonation of 514 days which is certainly beyond 30 days period for which delay is condonable as per Section 34(3) of the Act of 1996. Thus, this judgment cannot be employed to hold that the delay caused within the cononable period of 30 days cannot be condoned in the present case.
41. Learned Senior counsel for the respondent has further relied upon the judgment of Hon'ble Supreme Court in the case of State of Uttar Prades & others Vs. Satish Chand Shivhare and Brothers 2022 SCC OnLine SC 2151. The Hon'ble Supreme Court in the said case has held that liberal Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 15 approach does not mean that appeal should be allowed, even if the cause for delay shown is glimsy. It has been held that the Court should not waive limitation for all practical purposes by condoning inordinate delay caused by a tardy negligent manner of the functioning. However, the said case was condonation of delay of 337 days in filing appeal under Section 37 of Act of 1996. The delay was beyond the statutory limit of 120 days for filing appeal under Section 37 of the Act of 1996. The Hon'ble Supreme Court held that the petitioner therein failed to show sufficient cause for condonation of inordinate delay of 337 days. The considerations for condoning delay of 337 days cannot be strictly employed for condoning delay of 27 days, though it is true that the cause shown is relevant and not the length of delay.
42. Learned Senior Counsel for the respondent has also relied on judgment of Hon'ble Supreme Court in the case of Sheoraj Singh Vs. Union of India (2023) 10 SCC 531. Learned senior counsel has stated that the Hon'ble Supreme Court has held in the said case that 'explanation' is different from an 'excuse'. An 'explanation' is designed to give someone all the facts and lay out the cause for something. Thus, care must be taken to distinguish and 'explanation' from an 'excuse'. An 'excuse' is offered by a person to deny responsibility and consequences when under attack. It is sort of defensive action. It has further been held that it is only 'excuses' and not 'explanation' that is more often accepted for condonation of long delay and such condonation of long delay is often made to safeguard public interest from those hidden forces whose sole agenda is to ensure that a meritorious claim does not reach the higher court for adjudication. Thus, it has been argued that the Commercial Court was right in refusing to condone the delay of 27 days, even though it was within the condonable limit.
Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 1643. In the aforesaid judgment the Hon'ble Supreme Court has in fact held that condonation of delay caused by Union of India to be just and proper. In the present case, admittedly the value of award is Rs. 294.00 crores and the delay is 27 days. As narrated above in this order the matter was continuously under correspondence between the appellant No. 1 and appellant No. 2. In the aforesaid judgment Hon'ble Supreme Court has held as under:-
"41. Having bestowed serious consideration to the rival contentions, we feel that the High Court's decision [Union of India v. Sheo Raj, 2011 SCC OnLine Del 5511] to condone the delay on account of the first respondent's inability to present the appeal within time, for the reasons assigned therein, does not suffer from any error warranting interference. A s the aforementioned judgments have shown, such an exercise of discretion does, at times, call for a liberal and justice-oriented approach by the courts, where certain leeway could be provided to the State. The hidden forces that are at work in preventing an appeal by the State being presented within the prescribed period of limitation so as not to allow a higher court to pronounce upon the legality and validity of an order of a lower court and thereby secure unholy gains, can hardly be ignored. Impediments in the working of the grand scheme of governmental functions have to be removed by taking a pragmatic view on balancing of the competing interests."
(Emphasis Supplied) 4 4 . While arriving at the aforesaid conclusion the Hon'ble Supreme Court considered the earlier judgment of the Supreme Court wherein the delay caused by the Government or its instrumentalities were condoned. The relevant is as under:-
"26. G. Ramegowda v. LAO [G. Ramegowda v. LAO, (1988) 2 SCC 142] , while summarising the position of law on "sufficient cause", had the occasion to observe that the contours of the area of discretion of the courts in the matter of condonation of delays in filing appeals have been set out in a number of pronouncements of this Court. It was observed to be true that there is no general Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 17 principle saving the party from all mistakes of its the counsel. Noting that there is no reason why the opposite side should be exposed to a time-barred appeal if there was negligence, deliberate or gross inaction or lack of bona fides on the part of the party or its the counsel, it was further observed that each case will have to be considered on the particularities of its own special facts. However, this Court reiterated that the expression "sufficient cause" in Section 5 must receive a liberal construction so as to advance substantial justice and generally delays in preferring appeals are required to be condoned in the interest of justice where no gross negligence or deliberate inaction or lack of bona fides is imputable to the party seeking condonation of the delay. This was followed by these words : (SCC p. 148, paras 15 & 17) "15. In litigations to which Government is a party there is yet another aspect which, perhaps, cannot be ignored. If appeals brought by Government are lost for such defaults, no person is individually affected; but what, in the ultimate analysis, suffers is public interest. The decisions of Government are collective and institutional decisions and do not share the characteristics of decisions of private individuals.
***
17. Therefore, in assessing what, in a particular case, constitutes "sufficient cause" for purposes of Section 5, it might, perhaps, be somewhat unrealistic to exclude from the considerations that go into the judicial verdict, these factors which are peculiar to and characteristic of the functioning of the government. Governmental decisions are proverbially slow encumbered, as they are, by a considerable degree of procedural red tape in the process of their making. A certain amount of latitude is, therefore, not impermissible. It is rightly said that those who bear responsibility of Government must have "a little play at the joints". Due recognition of these limitations on governmental functioning -- of course, within reasonable limits -- is necessary if the judicial approach is not to be rendered unrealistic. It would, perhaps, be unfair and unrealistic to put government and private parties on the same footing in all respects in such matters. Implicit in the very nature of governmental functioning is procedural delay incidental to the decision-making process."Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 18
27. Katiji [Collector (LA) v. Katiji, (1987) 2 SCC 107] was also noticed by a Bench of three Hon'ble Judges of this Court in State of Haryana v. Chandra Mani [State of Haryana v. Chandra Mani, (1996) 3 SCC 132] where we find the following discussion :
(Chandra Mani case [State of Haryana v. Chandra Mani, (1996) 3 SCC 132] , SCC p. 138, para 11) "11. ... When the State is an applicant, praying for condonation 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 difficult to understand though more difficult to approve, but the State represents collective cause of the community. It is axiomatic that decisions are taken by officers/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 in justice-
oriented approach rather than the technical detection of sufficient cause for explaining every day's delay. The factors which are peculiar to and characteristic of the functioning of the governmental conditions would be cognizant to and requires adoption of pragmatic approach in justice-oriented process."
28. This Court in Tehsildar (LA) v. K.V. Ayisumma [Tehsildar (LA) v. K.V. Ayisumma, (1996) 10 SCC 634] , had the occasion to observe that it would not be necessary for the State to provide a day-to-day explanation of delay while seeking condonation of the same. The relevant observations therein read as follows : (SCC p. 635, para 2) " 2 . It is now settled law that when the delay was occasioned at the behest of the Government, it would be very difficult to explain the day-to-day delay. The Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 19 transaction of the business of the Government was being d o n e leisurely by officers who had no or evince no personal interest at different levels. No one takes personal responsibility in processing the matters expeditiously. As a fact at several stages, they take their own time to reach a decision. Even in spite of pointing at the delay, they do not take expeditious action for ultimate decision in filing the appeal. This case is one of such instances. It is true that Section 5 of the Limitation Act envisages explanation of the delay to the satisfaction of the court and in matters of Limitation Act made no distinction between the State and the citizen. Nonetheless adoption of strict standard of proof leads to grave miscarriage of public justice. It would result in public mischief by skilful management of delay in the process of filing the appeal. The approach of the Court should be pragmatic but not pedantic. Under those circumstances, the Subordinate Judge has rightly adopted correct approach and had condoned the delay without insisting upon explaining every day's delay in filing the review application in the light of the law laid down by this Court. The High Court was not right in setting aside the order. Delay was rightly condoned."
45. In the case of State of Nagaland Vs. Lipok A.O. & others (2005) 3 SCC 752 it has been held as under:-
"9. What constitutes sufficient cause cannot be laid down by hard- and-fast rules. In New India Insurance Co. Ltd. v. Shanti Misra [(1975) 2 SCC 840] this Court held that discretion given by Section 5 should not be defined or crystallised so as to convert a discretionary matter into a rigid rule of law. The expression "sufficient cause" should receive a liberal construction. In Brij Indar Singh v. Kanshi Ram [ILR (1918) 45 Cal 94 : AIR 1917 PC 156] it was observed that true guide for a court to exercise the discretion under Section 5 is whether the appellant acted with reasonable diligence in prosecuting the appeal. In Shakuntala Devi Jain v. Kuntal Kumari [(1969) 1 SCR 1006 : AIR 1969 SC 575] a Bench of three Judges had held that unless want of bona fides of such inaction or negligence as would deprive a party of the protection of Section 5 is proved, the application must not be thrown out or any delay cannot be refused to be condoned.
10. In Concord of India Insurance Co. Ltd. v. Nirmala Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 20 Devi [(1979) 4 SCC 365 : 1979 SCC (Cri) 996] which is a case of negligence of the counsel which misled a litigant into delayed pursuit of his remedy, the default in delay was condoned. In Lala Mata Din v. A. Narayanan [(1969) 2 SCC 770] this Court had held that there is no general proposition that mistake of counsel by itself is always sufficient cause for condonation of delay. It is always a question whether the mistake was bona fide or was merely a device to cover an ulterior purpose. In that case it was held that the mistake committed by the counsel was bona fide and it was not tainted by any mala fide motive.
11. In State of Kerala v. E.K. Kuriyipe [1981 Supp SCC 72] it was held that whether or not there is sufficient cause for condonation of delay is a question of fact dependent upon the facts and circumstances of the particular case. In Milavi Devi v. Dina Nath [(1982) 3 SCC 366] it was held that the appellant had sufficient cause for not filing the appeal within the period of limitation. This Court under Article 136 can reassess the ground and in appropriate case set aside the order made by the High Court or the Tribunal and remit the matter for hearing on merits. It was accordingly allowed, delay was condoned and the case was remitted for decision on merits.
12. In O.P. Kathpalia v. Lakhmir Singh [(1984) 4 SCC 66] a Bench o f three Judges had held that if the refusal to condone the delay results in grave miscarriage of justice, it would be a ground to condone the delay. Delay was accordingly condoned. In Collector, Land Acquisition v. Katiji [(1987) 2 SCC 107] a Bench of two Judges considered the question of limitation in an appeal filed by the State and held that Section 5 was enacted in order to enable the court to do substantial justice to the parties by disposing of matters on merits. The expression "sufficient cause" is adequately elastic to enable the court 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. This Court reiterated that the expression "every day's delay must be explained" does not mean that a pedantic approach should be made. The doctrine must be applied in a rational, common-sense, pragmatic manner. When substantial justice and technical considerations are pitted against each other, cause of Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 21 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. 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. Judiciary is not respected 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. Making a justice-oriented approach from this perspective, there was sufficient cause for condoning the delay in the institution of the appeal. The fact that it was the State which was seeking condonation and not a private party was altogether irrelevant. The doctrine of equality before law demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in an even-handed manner. There is no warrant for according a stepmotherly treatment when the State is the applicant. The delay was accordingly condoned.
13. Experience shows that on account of an impersonal machinery (no one in charge of the matter is directly hit or hurt by the judgment sought to be subjected to appeal) and the inherited bureaucratic methodology imbued with the note-making, file- pushing, and passing-on-the-buck ethos, delay on its part is less difficult to understand though more difficult to approve. The State which represents collective cause of the community, does not deserve a litigant-non-grata status. The courts, therefore, have to be informed with the spirit and philosophy of the provision in the course of the interpretation of the expression of sufficient cause. Merit is preferred to scuttle a decision on merits in turning down the case on technicalities of delay in presenting the appeal. Delay as accordingly condoned, the order was set aside and the matter was remitted to the High Court for disposal on merits after affording opportunity of hearing to the parties. In Prabha v. Ram Parkash Kalra [1987 Supp SCC 339] this Court had held that the court should not adopt an injustice-oriented approach in rejecting the application for condonation of delay. The appeal was allowed, the delay was condoned and the matter was remitted for expeditious disposal in accordance with law".
46. The Hon'ble Supreme Court in para 16 of the aforesaid judgment has also held that the adoption of strict standard of proof sometime fails to protect public justice and it would be result in public mischief by local management of Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 22 delay in the process of filing an appeal. In the case of Sheoraj Singh (Supra) it has been held by the Hon'ble Supreme Court that an exercise of discretion by the High Court has to be tested on the anvil of liberal and justice oriental approach as propounded in various decisions referred in the said judgment. It has also been held that the law of limitation is founded on public policy and some lapse on the part of the litigant by itself would not be sufficient to deny the condonation of delay as the same could cause miscarriage of justice.
4 7 . It has been held in another recent judgment of Hon'ble Supreme Court in the case of Haryana Urban Development Authority, Karnal Vs. Mehta Construction Company and another 2022(5)SCC 432 as under:-
"8. In the present case, it is an accepted position that the application for setting aside of the award dated 20-12-2013 was made on 28-3-2014 accompanied by an application for condonation of delay. The Court, therefore, had the power to condone the eight days' delay, which was less than thirty days, in terms of the proviso to sub-section (3) to Section 34 of the Act. In the application seeking condonation of delay, it was inter alia stated that after receiving a copy of the award at about 6.50 p.m. on 20-3- 2014, the appellant had engaged an empanelled advocate and the records pertaining to the arbitration case were constructed and examined. The short delay had also occurred as sanctions and approvals were required from the higher/competent authority.
9. Given the aforesaid background and the short condonable delay which had occurred, we do not think that the High Court and the Additional District Judge, Karnal were justified in refusing to condone the delay. The application for condonation of delay in filing of the objections should have been allowed.
13. We have briefly noted the provisions of the Act only to highlight that the objections under Section 34 of the Act did require consideration and in-depth examination and should not have been dismissed without proper and full application of mind with reference to the provisions of the Limitation Act and the Act.
14. In these circumstances, and for the reasons stated, we have no option but to allow the present appeal and set aside the impugned Signature Not Verified order dated 11-12-2019 [Haryana Urban Development Authority Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 23 (HUDA) v. Mehta Construction Co., 2019 SCC OnLine P&H 6257] passed by the High Court as well as the order dated 8-1-
2018 passed by the Additional District Judge, Karnal.
15. We would remit the matter to the file of the Additional District Judge, Karnal, who would hear the objections afresh and on merits without being influenced by the earlier orders and also the present order. We clarify that the observations made in this order are for the disposal of the present appeal and would not be treated as observations that are binding on the Additional District Judge, Karnal, when he examines and decides the objections under Section 34 of the Act on merits.
4 8 . T he aforesaid case was also a case of condonation of delay in preferring the application under Section 34(3) of the Act of 1996 filed on behalf of an instrumentality of the State.
49. The the Hon'ble Supreme Court in the case of Collector Land Acquisition Anantnag and another Vs. Ms. Katiji and others (1987) 2 SCC 107, has held as under:-
"Making a justice-oriented approach from this perspective, there was sufficient cause for condoning the delay in the institution of the appeal. The fact that it was the "State" which was seeking condonation and not a private party was altogether irrelevant. The doctrine of equality before law demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in an even-handed manner. There is no warrant for according a step-motherly treatment when the "State" is the applicant praying for condonation of delay. In fact experience shows that on account of an impersonal machinery (no one in charge of the matter is directly hit or hurt by the judgment sought to be subjected to appeal) and the inherited bureaucratic methodology imbued with the note-making, file-pushing and passing-on-the-buck ethos, delay on its part is less difficult to understand though more difficult to approve. In any event, the State which represents the collective cause of the community, does not deserve a litigant-non-grata status. The courts therefore have to be informed with the spirit and philosophy of the provision in the course of the interpretation of the expression "sufficient cause".
So also the same approach has to be evidenced in its application Signature Not Verified Signed by: RAJESH KUMAR JYOTISHI Signing time: 2/28/2024 5:25:45 PM 24 to matters at hand with the end in view to do even-handed justice on merits in preference to the approach which scuttles a decision on merits. Turning to the facts of the matter giving rise to the present appeal, we are satisfied that sufficient cause exists for the delay. The order of the High Court dismissing the appeal before it as time-barred, is therefore, set aside. Delay is condoned. And the matter is remitted to the High Court. The High Court will now dispose of the appeal on merits after affording reasonable opportunity of hearing to both the sides."
50. The commercial Court has held in the impugned order that the explanation for the delay after 13.04.2023 is not properly explained, thus, it refused to condone the delay of 27 days caused after 13.04.2023. As discussed by us in detail above, the delay of 27 days caused has been properly explained by the appellants.
51. In view of the factual situation of this case and the law as applicable in the present factual situation of the case as discussed in detail above, we are of the opinion that the Commercial Court has erred in refusing to condone the delay of 27 days which was within the limit of condonable delay of 30 days.
52. The appellants had no doubt offered sufficient cause for condonation of delay. The cause shown was an explanation and not excuse. Consequently, the order under appeal passed by the Commercial Court is set-aside. The application for condonation of delay filed by the appellant under Section 34(3) of the Act of 1996 stands allowed. The Commercial Court is directed to proceed with disposal of the application under Section 34 of the Act of 1996 in accordance with law. No order as to costs.
53. Appeal is allowed, in the above terms.
(SUJOY PAUL) (VIVEK JAIN)
JUDGE JUDGE
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Signed by: RAJESH KUMAR
JYOTISHI
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25
rj/mishra
Signature Not Verified
Signed by: RAJESH KUMAR
JYOTISHI
Signing time: 2/28/2024
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