GENERAL STATIONVERY MFG. CO. v. J. K. PAPER LTD. (EARLIER AS CENTRAL PULP MILLS LTD. )
2005-06-16
R.S.GARG, RAVI R.TRIPATHI
body2005
DigiLaw.ai
R. S. GARG, J. ( 1 ) RULE. Mr. K. S. Nanavati, learned Senior Advocate with Mr. Paritosh M. Calla waives service of Rule for the respondent. ( 2 ) PRESENT is an application filed under Section-5 of the Limitation Act, 1963, seeking condonation of delay of 510 days in filing the appeal. The order under challenge was passed in Company Petition No. 313 of 2000 on 30. 8. 2001 and the appeal came to be filed on 17th February, 2003. ( 3 ) SHORT facts leading to the present appeal are that the petitioner claims himself to be a creditor of the M/s. Central Pulp Mills Ltd. He had already issued a statutory notice to the Company and has also filed a Winding Up Petition No. 250 of 2003 on the grounds that the Company had become insolvent or is unable to discharge its liabilities in accordance with law to the tune of the amount which is recoverable for and on behalf of the present appellant. ( 4 ) M/s. Central Pulp Mills Ltd. , according to the appellant became sick and thereafter an application came to be filed before the BIFR somewhere in the year 1992. The appellant lodged his claim before the BIFR. During pendency of the application before the BIFR, the appellant made an application before the High Court for sanctioning a Scheme, the Scheme was sanctioned by the order impugned on 30th August, 2001 and thereafter this fact was brought to the notice of the BIFR. The BIFR though took exception to the conduct of M/s. Central Pulp Ltd. , and observed in para-19 of its order dated 30th April, 2002 that the High Court was not informed about the fact that the case was being heard in BIFR and an appeal had already been preferred to AAIFR. It also observed that the BIFR was not informed about the filing of the Scheme. The BIFR ultimately observed that by virtue of the Courts order, basic structure of the SS for CPML, which was a sick industrial company for which a rehabilitation scheme had been sanctioned by the Board in 1992 ceased to exist. JKPL Paper Ltd. , in their balance-sheet dated 30th June, 2001 have mentioned that their net worth was positive on that date, the Board accordingly discharged the company.
JKPL Paper Ltd. , in their balance-sheet dated 30th June, 2001 have mentioned that their net worth was positive on that date, the Board accordingly discharged the company. The appellants were not a party to the Scheme who were contesting their claim before the BIFR. It appears from their application that after the order dated 30th August, 2001 was passed by this Court, the facts were not informed to the appellants nor were brought to the notice of the BIFR immediately. According to them, the facts were brought to the notice of the BIFR on 30. 10. 2001 and even at that time, the orders etc. passed by the High Court were not submitted to the BIFR. According to the appellant, the details of the orders etc. , were filed before the BIFR on 30th April, 2002 and immediately thereafter on 2nd May, 2002, they wrote to the Company to supply them the details of everything, but the Company delayed the matter, therefore, a reminder had to be issued on 5. 8. 2002. It is further submitted that the applicant/appellant received a letter from the Company which was written on 2. 10. 2002 with which the Gujarat High Courts order dated 30. 8. 2001 and Orissa High Courts order dated 14. 8. 2001 sanctioning the Scheme were attached. The appellant says that it called upon the respondent Company to furnish a copy of the pleadings and other documents submitted in the Court along with his petition for sanctioning the Scheme vide his letter dated 21. 12. 2002 and as they could not get any response from the Company, their representative came to the High Court and with the permission of the Registrar, inspected the records and obtained the documents in the last week of January, 2003. It is further submitted that the appellants perused the papers and sought advice on the issue and after appreciating that the present respondent Company did not disclose true and correct facts to the Court and did not convene meeting of the creditors, though their interest was substantially and seriously prejudiced on account of the acceptance of the Scheme, they proposed to file an appeal. The submissions are that under the set of the circumstances and for the reasons stated in the application, the delay deserves to be condoned.
The submissions are that under the set of the circumstances and for the reasons stated in the application, the delay deserves to be condoned. As the appellant was not a party to the Scheme, he also filed Civil Application No. 22 of 2003 seeking permission to file an appeal. ( 5 ) THE respondents have submitted that from the averments made in the application, it would clearly appear that the appellant was absolutely negligent and but for writing letters to the respondent Company, was not taking any positive action in the matter. It is also submitted that from the perusal of the averments which relate to the submission of the information to the BIFR, it would clearly appear that the facts were brought to the notice of the BIFR, before which the appellant was a party, on 30th April, 2002, but instead of taking cognizance of the facts and the details of the documents, the appellant started writing letters and even after receiving the copies of the orders passed by this Court and Orissa High Court, did not come to make inquiries, but wasted sufficient time up to 21. 12. 2002 and even thereafter did not take any steps up to the last week of January, 2003. His submission is that there are no good reasons, much less sufficient reasons for condoning the delay. ( 6 ) MR. Joshi, learned counsel for theh appellant, placing reliance upon the judgment of the Supreme Court in the matter of Land Acquisition Officer Vs. Mst. Katiji and others [ (1987) Vol. 2 Supreme Court Cases 107] and N. Balkrishnan Vs. Krishnamurthy, [ (1998) Vol. 7 Supreme Court Cases 123] submits that a good cause should not suffer because of some inadvertence because of some lapses which may not amount to negligence or are not caused because of the malafides or delaying tactics. His submissions are that a party-litigant does not stand to benefit by causing delay and as refusal to condone the delay may result in meritorious matter being thrown out at the threshold and as substantial justice is to be given priority over the technicalities, for the reasons stated in the application, the delay deserves to be condoned. Mr.
His submissions are that a party-litigant does not stand to benefit by causing delay and as refusal to condone the delay may result in meritorious matter being thrown out at the threshold and as substantial justice is to be given priority over the technicalities, for the reasons stated in the application, the delay deserves to be condoned. Mr. Nanavati, learned counsel for the other side, on the other hand, submitted that the question of bonafides must float on the surface of the Civil Application and delay can be condoned if there are no laches, lapses or negligence on the part of the appellant. According to him, a sufficient cause is to be liberally construed, but every manufactured reason or concocted plea is not to be taken so liberally for condoning the delay. ( 7 ) IN the matter of Collector, Land Acquisition (supra), in para-3, the Supreme Court has observed as under:-"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 the matters on `merits. The expression "sufficient cause" employed by the legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose for the existence of the institution of courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted on principle as it is 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 days delay must be explained" does not mean that a pedantic approach should be made. Why not every hours delay, every seconds delay? The doctrine must be applied in a rational common sense pragmatic manner. 4.
3. "every days delay must be explained" does not mean that a pedantic approach should be made. Why not every hours delay, every seconds 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 the case of N. Balakrishnan (supra), the Supreme Court has again observed that acceptability of explanation for the delay is the sole criterion, length of delay is not relevant. The Supreme Court has further observed that in absence of anything showing mala fide or deliberate delay as a dilatory tactic, the Court should normally condone the delay. ( 9 ) IT is to be seen that the present appellant had lodged his claim before the BIFR, when the rehabilitation scheme was under consideration. For long many years, he proceeded with his claim and all of a sudden, he was informed before the BIFR that a scheme was sanctioned by the High Court. True it is that the present appellant was not a party to the proceedings before the High Court. It is also true that no notice was ever issued to him and it is also true that the appellant was never taken in confidence or was informed either directly or through BIFR that Company Petition No. 313 of 2000 has been filed before the High Court for sanctioning the Scheme, but the fact also remains that for the first time during hearing before the BIFR on 13. 10.
10. 2001, the Companys representative disclosed the facts and the appellant came to know that the status of the present respondent, then known as Central Pulp Mills Ltd. , had undergone change in view of the Scheme of the compromise and/or arrangement with J. K. Corporation Limited, which had been sanctioned by the Gujarat High Court. A person who was relentlessly pursuing his claim right from 1992 up to 13. 1. 2001 does not suffer any surprise or shock, but simply sits over the subject and awaits compliance of the direction of the BIFR whereunder the present respondent was asked to furnish the necessary details. We would accept the statement of the appellant that the directions issued by the BIFR were complied with on 30th April, 2002. Undisputedly, on the said date, the documents were filed before the BIFR. It is not disputed before us that at least on 30th April, 2002, the appellant gained knowledge of the orders, Scheme, approval of the Scheme, date of the order and the number of the petitions which were finally disposed of by the High Court. ( 10 ) A person who was pursuing his claim for almost about nine years, does not do anything, but writes a letter on 2. 5. 2002 to the Company to furnish the relevant documents to him. He does not take the notes nor does he inspect the records, nor does he ask the BIFR to supply him the copies of the documents being a party to the proceedings. The matter does not end here, the appellant who claims himself to be a rustic and non-law knowing man, awaits response for three months, does not engage any lawyer, he does not ask anybody nor depute any party or representative to come to Ahmedabad and inspect the records or take further action in the matter. The appellant is non-law knowing man, is being stated by us, because, when we had put a question to the counsel for the appellant as to why steps were not taken and whether the appellant had legal cell or not, we were informed that the appellant is a partnership firm and they are not well-equipped with law. ( 11 ) AFTER 2. 5. 2002, some steps to show bona fides ought to have been taken by the appellant, but he does not. He sits tied over the subject up to 5. 8.
( 11 ) AFTER 2. 5. 2002, some steps to show bona fides ought to have been taken by the appellant, but he does not. He sits tied over the subject up to 5. 8. 2002 and on 5. 8. 2002, sends a reminder to the respondent-Company to supply all the documents. With the letter dated 2. 10. 2002, he received copies of the orders dated 30th August, 2001 and 14. 8. 2001 passed by the Gujarat High Court and Orissa High Court respectively, instead of taking any action even after receiving the said orders, he writes a letter to the Company on 21. 10. 2002 i. e. , almost after about 2 months and 19 days. In para-5 of the application, he nowhere states that why steps were not taken by him even after receiving the said documents and what took him to delay the matter up to 21. 10. 2002. The pleadings are shrouded by the mysteries which the appellant is not ready and willing to unfold. When he had received the documents somewhere in October, 2002, then, it was expected of him to come to Ahmedabad, look into the proceedings or in any case challenge the order dated 30. 8. 2001 in the Letters Patent Appeal at his earliest. ( 12 ) FROM 30th April, 2002 up to 21. 12. 2002, despite information available to him and despite the documents having been received by him, he did not propose to challenge the order in the Letters Patent Appeal. His submission is that he had no documents with him, therefore, he asked for the documents and after two orders were received by him, he again wanted to see the documents whether there was an application to the High Court seeking exemption of holding of the shareholders meting. We are unable to concede to all these pleadings. It is yet to be seen that after the letter dated 21. 12. 2003 was written, the simple statements are that the applicants submitted an application for inspection and certified copies of the relevant pleadings and documents to the Registrar of the Gujarat High Court and thereafter, inspected the relevant documents in or about last week of January, 2003. From 21. 12. 2002, again, there is delay of about more than one month.
2003 was written, the simple statements are that the applicants submitted an application for inspection and certified copies of the relevant pleadings and documents to the Registrar of the Gujarat High Court and thereafter, inspected the relevant documents in or about last week of January, 2003. From 21. 12. 2002, again, there is delay of about more than one month. It appears that the plea of inspecting the records in the last week of January, 2003 has been manufactured to justify filing of the appeal on 13. 2. 2003. True it is that the criterion is the sufficient cause and not length of the delay, but in a given case, where a person knows about the order long back and does not take any steps to challenge the order before the appellate forum, then, his conduct would become non-palatable and he would be called upon to explain the delay. It is also true that a litigant does not stand to benefit by causing delay and refusal to condone the delay may result in nipping in the bud of a meritorious matter and substantial justice must override the technical consideration, but the question still would be that the circumstances which show absolute recklessness and carelessness on the part of the appellant should be taken to be his bona fides and the delay can be condoned simply on awarding the cost or so. ( 13 ) WE have already observed that since after 30th April, 2002, the appellant did not act vigilantly. The learned counsel for the appellant further submitted that non-vigilance does not mean negligence. In our considered opinion, when the recklessness or non-vigilance is floating on the record and gives a dent to the conduct of the appellant, then, such non-vigilance may tantamount to negligence. In the present matter, the appellant for the first time, received information on 30th October, 2001. We may accept that he was justified in awaiting the submission of the details before the BIFR up to 30th April, 2002, but since after 30th April, 2002, he has not exhibited his bona fide conduct. Taking into consideration the totality of the circumstances, we are of the opinion that the appellant has failed to make out a sufficient cause for condonation of delay in filing the appeal.
Taking into consideration the totality of the circumstances, we are of the opinion that the appellant has failed to make out a sufficient cause for condonation of delay in filing the appeal. ( 14 ) IT is also to be noticed that the appellant has already filed Winding Up Petition No. 250 of 2003, wherein he is pursuing his claim. We are sure that if he makes out a cause for winding up of the Company, this Court certainly would grant relief in the said Company Petition. In the present petition, we are unable to give him any relief. Civil Application No. 23 of 2003, for the reasons aforesaid is rejected. Consequently, Civil Application No. 22 of 2003 and O. J. Appeal No. 9 of 2003 is also dismissed. .