Calcutta High Court (Appellete Side)
East Coast Ispat Private Limited vs Railway Supply Corporation Private ... on 2 September, 2022
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
Appellate Side
Present :- Hon'ble Mr. Justice I. P. Mukerji
Hon'ble Mr. Justice Subhendu Samanta
FMAT 245 of 2022
With
CAN 1 of 2022
East Coast Ispat Private Limited
Vs.
Railway Supply Corporation Private Limited
For the Appellants :- Mr. Dhruba Ghosh, Sr. Adv.
Mr. Rishad Medora,
Mr. Meghajit Mukherjee,
Mr. Vidhya Bhusan Upadhyay.
For the Respondents :- Mr. Joy Saha, Sr. Adv.
Mr. Tanish Ganeriwala,
Mr. Srijit Bose.
Judgment On :- 02.09.2022.
Subhendu Samanta, J.
The instant appeal has been preferred against the order dated May10th, 2022 passed by the learned 2nd Court of Civil Judge (Senior Division) at Alipore in Misc case No. 28 of 2021 (East Coast Private Limited Versus Railway Supply Corporation Private limited).
The respondent herein had filed a suit before the learned court below being Title Suit No. 8305 of 2014 against the present appellant for eviction and recovery of Khas possession of the subject premises together with a decree for mesne profit and other reliefs.
The appellant/defendant contested the suit by filling a written statement where they categorically denied all allegations of the respondent/ plaintiff with some positive assertion that they have paid the rent according to the agreement and were not liable to be evicted.
During the continuation of the suit trial commenced and respondent/plaintiff has produced their witness on dock and has been successfully examined and cross-examined and discharged. Since then the appellant/defendant took some adjournments for quite a considerable period of time and when the date was fixed for examination of defendant's witness, the appellant/defendant did not produce a witness and consequently learned court below after hearing the respondent/plaintiff decreed the suit on 24.07.2019. By the decree learned court below directed the appellant/ defendant to quit and vacate the suit property within 90 days from the date of passing of the decree.
Thereafter the appellant /defendant preferred a miscellaneous case being No. Misc 28 of 2021 under order 9 Rule 13 CPC for setting aside of the ex- parte decree supported by an application under Section 5 of Limitation Act for condonation of delay.
The matter was contested by the respondent/plaintiff by filling written objections against both the applications.
By the impugned order made on 10.05.2022 the learned court below rejected the application filled by the appellant under Section 5 of Limitation Act. Consequently, the Misc case preferred under Order 9 Rule 13 of the Code of Civil Procedure was also not admitted.
Hence this appeal.
The grounds which were stated before the learned court below for non appearance the appellants at the time of hearing of the suit are as follows:-
There are two directors of the appellant/defendant Company viz Smt. Sushila Gupta and Mohit Gupta. Sushila gupta used to look after the Suit on behalf of the Company.
2 At the time of evidence of the defendant's witness, both the directors of the appellant/defendant had been staying at Delhi for a considerable period of time. Due to old age and worsening mental health, of Srimati Sushila Gupta (one of the directors), who was looking after the suit could not instruct their Advocate properly; consequently no steps were taken on behalf of the defendant company. However, the director Srimati Sushila Gupta died after the ex-parte decree was passed and the other director Mohit Gupta only came to know about the status of the suit in March 2020 when execution proceeding was on the way. Due to pandemic and consequent lock-down no steps could be taken by the defendant company and they had no intentional laches for not appearing on the date of hearing of this case.
Learned court below disbelieved the contentions of the appellant, no show cause notice was required to be issued for the execution proceeding according to order 21 Rule 22 CPC as the execution proceeding was initiated within 2 years of the date of the decree.
The Learned court below was also of the opinion that the individual incapacity of the directors cannot be held as incapacity on the part of the defendant company which has a separate identity. So, learned court below has dismissed the application under Section 5 of Limitation Act and did not consider the plea of personal inconvenience of one of the directors of the defendant Company.
Learned advocate for the appellant submitted before this court that learned court below has committed error in not appreciating the facts and circumstances of this case. It was the positive assertion of the learned Advocate for the appellant that Srimati Sushila Gupta, the director representing the appellant company used to give instruction to the Learned Advocate. She became very fragile and old and was suffering from dementia. Consequently, she died on 01.09.2019 after the suit was decreed ex-parte on 24.07.2019. The other employees of the defendant company 3 was not in a position to instruct counsel in respect of the case. Thus, no steps could be taken before the leaned court below when the date was fixed for examination for the defendant's witness.
He further argued that the personal incapacity of the director Suhila Gupta, placed the defendant company in a position that the other employees could not have such capacity to instruct the Learned Advocate in proceeding the suit. So, the incapacity of one of the directors was unintentional. Thus the conduct of the defendant company was also unintentional. He further argued that the only other director of the company Mr. Mohit Gupta who was regularly travelling out of Calcutta for official work and was not aware of the suit proceeding as they were solely handled by Late Srimati Sushila Gupta. The said director Mr. Mohit Gupta had learnt about the status of the Title Suit after becoming aware of the execution application in March 2020, when some people on behalf of the respondent/ plaintiff appeared on the Suit Property to take possession of the same. But the learned court below has misappreciated the fact and misguided himself regarding the receiving of the show cause notice of execution proceeding. He further argued that learned court below has committed error in passing the impugned judgment and Order by rejecting the application under Section 5 of Limitation Act.
In support of his contention Learned Advocate for the appellant cited an unreported Judgment passed by a Division Bench of this Hon'ble court in Subham Private Limited vs. Eastern Coal Private Limited dated 3rd September 2015.
He also cited a decision of Hon'ble Supreme Court of India in Collector, Land Acquisition,Anantnag and Anr. vs Mst.Katiji and others. Reported in 1988(19)ECR 565(SC).
4 Learned Advocate for the respondent/plaintiff heavily contested the matter before us. He categorically argued that the appellant herein adopted a dilatory tactics in proceeding with the suit since the beginning. He further argued that they were aware about the fact that there is no chance to succeed in the case so; they have intentionally delayed the proceeding by several unscrupulous acts.
The defendant appellants have disclosed nothing in their written statement regarding their defence whatsoever.
The only witness of the plaintiff respondent has been cross-examined by the defendant between 07.08.2015 to 07.09.2016 over 12 hearing dates for a period of more than one year.
After the closure of evidence of respondent/plaintiff, the appellant/ defendant did not examine any witness but at that stage of the suit appellant have filed a frivolous application before the learned court below under Order 39 Rule 1 and 2 read with section 151 CPC.
To fulfil their purpose of delaying the suit the application for injunction was kept pending before the learned court below for more than 2 years. Ultimately they could not take steps and learned court below had no option but to dismiss the application. The order of learned court below would reveal the conduct of the appellant/defendant regarding their reluctant approach in proceeding with the suit.
The learned court below had satisfied itself that the appellant/ defendant was prolonging the proceeding of the suit. Thus, on 21.01.2019 the petitions were dismissed and the suit was posted for arguments. Learned Advocate for the respondent/plaintiff categorically argued before this court that the conduct of the appellant/defendant was mala fide and delay caused by them was purely intentional.
5 He further argued that the statement made in the application under Section 5 of the Limitation Act and in the application under Order 9 Rule 13 CPC are false and cannot be entertained.
He also contended that the learned court below has correctly held the statement in the petition under Section 5 of Limitation Act regarding the date of knowledge of the ex- parte decree by one of the Director Mr Mohit Gupta upon receiving a notice of the execution petition in March 2020, is false and fabricated. No notice of execution petition was ever been served upon the defendant. He further argued that no explanation has been offered or mentioned either in the petition under Section 5 of the Limitation Act or in the petition under Order 9 Rule-13 CPC as to why no steps were taken by the Director Mr. Mohit Gupta in respect of the suit. Though the Master data of the appellant/defendant company will reveal that Mohit Gupta is the sole Director of the defendant Company. The Learned Advocate for the respondent cited some decisions reported in (2013)12 SCC 649(Esha Bhattacharjee vs. Managing Committee of Raghunathpur Nafar Academy and (2021)6 SCC 418, Rahul S. Sha Vs. Jinendra Kumar Gandhi and Others).
Learned Advocate for the respondent pointed out that by virtue of the principles laid down in the above mentioned judgment (Esha Bhattacharjee) in para 21.5, 21.7 and 21.8 the case of the appellant cannot invite a favourable consideration.
He also pointed out that by virtue of decision of the Hon'ble Apex Court reported in Rahul S. Shah's case (2021) 6 SCC 418 paragraph 21 and 22 the Judgment, the Court has repeatedly pointed out that delay cannot be condoned when it obstructs a bona fide decree holder to enjoy the fruits of litigation.
On the basis of the above argument Learned Advocate for the respondent submitted that the instant appeal is liable to be dismissed. 6 Findings Heard the Learned Advocate for the parties at length. First of all, let me consider whether the findings of the learned court below regarding the incapacity of one of the directors of a Company can be construed as an incapacity of the company itself. Learned advocate for the appellant cited an unreported decision passed by a Division Bench of this Court in Shivam Coke Private Limited vs. Eastern Coalfield Limited and Anr. on 3rd September 2015, wherein the ill health of one of the directors of a Company was considered by the court for condoning the delay in preferring the appeal. The fact and scenario of this case fit into the facts of this citation.
Actually, the director of a Company and the Company are separate identities. But when the director is acting on behalf of the company, his behaviour, act, omission, applications, wrong doings, etc squarely affect the company. If one company is dependent upon one director for completion of a duty, and at this juncture, if the director becomes incapable of doing the same the company is no doubt becomes liable and have to face the consequences of director's incapacity.
In this case, it has been pleaded that the appellant/defendant company placed their reliance upon one of the Directors Sushila Gupta to conduct the case on behalf of the company. The illness and mental inability of the director has been pleaded, and it has also been a fact that the said director had died. So, in this case the incapacity or inability of the director Sushila Gupta to conduct the case affected the company. Thus, in my view, in the present case the incapacity of the director can be considered as unintentional incapacity of the company itself. In such view, the opinion of learned court below is actually not correct in the facts and circumstances of this case.
7 Let me consider the ratio of judgments cited by the Learned Advocates for the parties.
In Collector, Land Acquisition Anantnag and Anr. vs. Mst Katiji and others. The Hon'ble Supreme Court has formulated that -
"3. The legislature has conferred the power to condone delay by enacting Section 5 of the Indian 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 lawn in a meaningful manner which sub serves 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 Katiji and others vs. Land Acquisition, Anantnag & Anr. hierarchy. And such a liberal approach is adopted on principle as it is realized 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 legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.'' 8 In Esha Bhattacharjee vs. Managing Committee of Raghunathpur Nafar Academy & Ors. The Hon'ble Supreme Court has formulated some principles for condonation of delay as follows-
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 fide 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 encapsulate 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 require 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 scrutinised and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception. 9 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 haphazard 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 delay with in a routine manner on the basis 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 nonchalant manner requires to be curbed, of course, within legal parameters.
Learned Advocate for the respondent has also cited a decision of Hon'ble Apex Court reported in Rahul S. Shah's case (2021) 6 SCC 418. He pressed hard the finding of the Hon'ble Apex Court in paragraphs 21 and 22 of the cited judgment and pointed out that the delay cannot be condoned when it was intentional and when it obstructed a bona fide decree holder to enjoy the fruits of the litigation. After considering the above mentioned authorities and the principles laid down therein it appears to me that the Hon'ble Apex court has always pointed out that the term "sufficient cause" as defined to be construed liberally in justice oriented platform. It has observed that "the expression sufficient cause employed by the legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which sub-serves the ends of justice that if the life purpose for the existence of the institution of the Courts".
Learned Advocate for the respondent pointing out paragraphs 21.4 and 21.5 of Esha Bhattacharjee's Judgment (2013)12 SCC 649 argued that the deliberate causation of delay and gross negligence on the part of 10 counsel or litigant is to be taken note of. He further argued that in this case lack of bona fide on behalf of the appellant was glaring. In considering the submission of the learned advocate for the respondent it appears to me that though the appellant/defendant has taken some adjournments before the learned court below, but it is also not disputed factually or otherwise that one of the directors Sushila Gupta was not mentally capable to instruct learned Advocate at that time of proceeding of the suit. Thus, the conduct, of appellant/defendant as alleged, cannot be construed as lack of bona fide or gross negligence on their part. In this present scenario the conduct, behaviour and attitude of the appellant appears to me as justifiable.
This is one of the in-famous cases between land lord and tenant. Herein the land lord has got an ex parte decree. However, after the decree has been passed the tenant came to set aside the ex parte decree along with an application under Section 5 of the Limitation Act. Its general principle that the application under Section 5 of the Limitation Act would be construed liberally, if sufficient cause has been shown. In this type of cases, there are catena of judgments of High Courts and Hon'ble Apex Court wherein long delay has been condoned. Let me consider whether the cause shown by the appellant before this court can be considered as sufficient or not. Learned trial Court has passed an order wherein he has categorically disbelieved the factum of sufficient cause, as shown by the appellant before him. It is the finding of the learned court below that the statements in Section 5 of the Limitation Act are actually not correct the other finding is that, the incapacity of one of the directors of the Company cannot be construed as the in-capacity of the entire Company.
It is a fact that one of the Directors has died after the passing of the decree. It is the specific averment of the respondents before this court that the appellant has adopted dilatory tactics before the learned court below to prolong the proceeding of the suit. He has cited several orders and 11 instances wherein the conduct of the appellant/defendant is very much glaring. However, considering the totality of the dispute in the lis in question, it appears that the instant suit is not in a nascent stage. In this suit, the defendant has appeared and contested by filing written statement. The evidence by plaintiffs witness has been completed; now the evidence of defendant's witness and argument has only been left. So, the litigation can be said to be at its final stage. In my view only two effective dates are required to complete the proceeding; i.e. one for defendant's witness and another for argument.
At the stage the plaintiff/respondent has obtained an ex parte decree. The ex parte decree in its nature is a decree which has not been actually a final decree. The dispute between the parties was not finally determined in the ex parte Decree; so the ex parte decree cannot be said to be an actual fruit of the litigation because the fruit is yet to flourish. The litigation must be an end by the duel of opponent parties. Without the duel being made, the decree i.e. the ex -parte decree cannot be said to be a final conclusion of the lis. Considering the present scenario of the case in hand, it appears that there is every chance of contested determination of the suit. The judgments of Hon'ble Apex Court as well as dictum of several High Courts has adopted the liberal view in interpreting Section 5 of the Limitation Act. The Indian Courts are to act for disposal of contested litigation between the litigants in a fair manner. So in my view justice can only be sub served; if litigation can be disposed of in a contested manner. In the present case the litigation is actually at its final stages so in my view the learned Court below has committed an error for not allowing the appellant/defendant to contest the case. Merely, taking some adjournments during the proceeding of the suit should not act as a curse upon a party who later intends to contest the suit. I find no justification for rejecting application under Section 5 of the Limitation Act by the Learned court below.
12 Thus the appeal appears to me meritorious and it is allowed. The impugned order passed by the Leaned Court below on 10.05.2022 in Misc Case No. 281 of 2021is hereby set aside.
The application under Section 5 of the Limitation Act filed by the Appellant/Defendant as well as the application under Order 9 Rule 13 (The Misc Case Bearing No. 28 of 2021) is allowed.
The judgment in Title Suit No. 8305 of 2014 dated 24.07.2019 is hereby also set aside.
Appellant is directed to appear before the Ld. Court below within one week from the date of passing of this Judgment along with his witness/witnesses, and to proceed with this Suits without any adjournments.
Learned court below is directed to allow the Defendant/Appellant to adduce his witness for a single day and also fixed another date for arguments and he is also directed to dispose of the Title Suit by 30th November 2022, after hearing both the parties by pronouncing a contested Judgment with framing of issues.
Accordingly, the instant appeal and the connected application (CAN 1 of 2022) if pending is disposed of.
(Subhendu Samanta, J.) I. P. MUKERJI, J.:-
I have had the privilege of going through the draft judgment prepared by my learned brother. I am in full agreement with the conclusions that his lordship has reached and also the reasons advanced by him in reaching them.
While considering whether an applicant has been able to show sufficient cause for condonation of delay in preferring an appeal or application or 13 sufficient cause for not being present in court when an ex-parte decree or order was passed against him, the principles of law laid down by the Supreme Court and the High Courts in various decisions down the years have to be collated and some kind of a uniform principle or standard identified and applied by the courts.
It is true that a litigant does not gain anything by abstaining from litigation or not appearing in court. The litigant runs a very serious risk if the delay is not condoned or if his effort to set aside the ex-parte decree or order does not meet with success. But very often, a speculating litigant would take this risk. Say for example, a tenant whose tenancy has been lawfully terminated. He knows that he has no known right to remain in the premises. An eviction decree is likely to be passed. It would suit him fine to abstain from attending court hearings, suffer the decree ex-parte and then take a chance to set it aside. Even after suffering a contested or ex-parte decree, it might suit him to refrain from preferring an appeal and jump into the court, the moment the landlord was trying to execute the decree. Therefore in such type of cases, an examination of the merits of the applicant's case is necessary while considering whether he had "reasonable cause."
Usually, a litigant entrusts his case to a lawyer expecting that he would take steps in the matter. It is quite legitimate for a litigant not to keep on making enquiries regarding the matter, because he is expected to do other work and keep up to his engagements believing that his lawyer would be doing the needful. The lawyer is also a professional and has other work. The litigant has some obligation to atleast from time to time make enquiries about his case and remind the lawyer about it. Now, if in spite of this, the lawyer neglects the matter, does not keep the client informed of its developments or misleads the client into believing that care is being taken of his case, when no such care is taken, an application under Section 5 of 14 the Limitation Act, 1963 by a litigant explaining these circumstances would certainly constitute reasonable cause.
The government machinery is impersonal and long. A decision, before it is finally taken to lodge a case or appeal, has to be examined at various levels, note sheets prepared, approved and thereafter, final approval taken. Thus, the case or appeal is got ready. Some leniency has to be shown to the government when the question of limitation is concerned. But this leniency should not be to such an extent so as to encourage gross inaction, negligence or corruption.
Special consideration should be made of the situation caused by the outbreak of the covid pandemic. People were advised to stay at home as far as possible, work from home and avoid groups and gatherings. As a result, there was very minimal human interaction, less work, loss of economic resources, less business, less production and so on. When the lives of the people were at stake and with worsening economic condition, it is to be presumed that a person would have more priorities than litigation. In those circumstances, if litigation was delayed, a liberal view ought to be taken for the delay during that period which stretches beyond the exclusion of time granted by the Supreme Court, during this period. The goal of the court should be to promote substantial justice. Its approach should be reasonable.
At the same time, inordinate delay or delay to deprive the adversary of the fruits of the order obtained by him or deliberate delay to deprive the opponent of a right must be strictly addressed by the court. Gross negligence should not be condoned.
As observed by my brother in his judgment that the real culmination of litigation is substantive adjudication in the presence of all the parties. Victory in a matter on a technical ground does not stand on the same 15 pedestal. Rather the court should avoid disposal of matters on technical grounds.
No doubt in this case, there is much in the conduct of the appellant and its directors which is undesirable. But the fact is that the suit is not very old, being of 2014. The trial of the suit has also proceeded substantially before the appellant, stopped appearing in court.
When it is possible to conclude the trial within a short period and thus have a result on contest, it would be preferable to leave the suit undecided on merits. Therefore, I fully concur with the conclusions reached by my brother on the question of condonation of delay and limiting the time for trial of the suit.
Certified photocopy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.
(I. P. MUKERJI, J.) 16