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Rajasthan High Court · body

2022 DIGILAW 2713 (RAJ)

IFCI Ltd. v. Satyatej Mercantile Pvt Ltd.

2022-11-04

SUDESH BANSAL

body2022
ORDER 1. Appellant-Defendant has moved application (I.A.No.1/2022), stating inter alia that appellant-IFCI Limited is a Government of India undertaking and Public Financial Institution, which has preferred this first appeal, assailing the judgment and decree dated 12.02.2019, whereby and whereunder suit for payment of Rs.18 lakhs and Rs.50,000/- per month continuously, as rent and warehousing charges, has been decreed against the appellant, on account of non-removal of 24 looms from the property of Modern Syntax (India) Limited, which was put in public auction under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, for which respondent-plaintiff stood highest bidder and therefore, after finalizing his bid, sale deed dated 20.11.2009 has been executed in favour of plaintiff. It has been stated that in execution of the impugned decree, respondent-decree holder has already recovered amount of Rs.68,58,555/- on 20.09.2019 and thereafter, again bank account of appellant has been attached for an amount of Rs.21,24,000/- vide order dated 10.10.2022 in execution proceedings by the Court of Additional District Judge No.1, Alwar, therefore, there is urgency in the matter and it has been prayed that since first appeal is delayed by 57 days, so an application (CMCC 1367/2019) under Section 5 of the Limitation Act, 1963 (hereinafter referred as ’the Act of 1963’) has also been filed. Hence in such circumstances matter may be heard earliest. 2. For reasons mentioned in the application, supported with the order-sheet of the Court of Additional District Judge No.1, Alwar, dated 10.10.2022, in respect of attachment of bank account of the appellant, the application for early hearing (I.A.No.1/2022), is allowed. 3. With consent of learned counsel for both parties, heard on the application (CMCC 1367/2019), filed under Section 5 of the Act of 1963, seeking condonation of delay in filing first appeal. 4. In the application, appellant has indicated that there is delay of 64 days in filing first appeal but Registry of High Court has pointed out the delay of only 57 days, therefore, appellant has moved application (I.A.No.1/2020) to correct the period of delay from 64 days to 57 days only. 5. Respondent-plaintiff filed reply on 07.08.2019, to the application of appellant, filed under Section 5 of the Act of 1963, and has seriously opposed the application. 6. This Court, vide Order dated 11.11.2019, directed the counsel for appellant to file additional affidavit in order to explain the delay. 5. Respondent-plaintiff filed reply on 07.08.2019, to the application of appellant, filed under Section 5 of the Act of 1963, and has seriously opposed the application. 6. This Court, vide Order dated 11.11.2019, directed the counsel for appellant to file additional affidavit in order to explain the delay. In compliance thereof, an additional affidavit of Mr. V. Sreekumaran Nair, General Manager (Law), of appellant has been placed on record on 20.11.2019. Respondent-plaintiff has also filed counter affidavit on 06.12.2019. 7. It has been stated in the application under Section 5 of the Act of 1963 that the impugned judgment and decree dated 12.02.2019 was passed ex parte and appellant came to know about the judgment and decree only on 04.07.2019, thereafter, the first appeal has been filed immediately on 15.07.2019. It has been indicated in the application that the counsel for appellantdefendant had ensured that he will inform and shall call upon the appellant-defendant, as and when its presence shall be necessary, but he did not call upon appellant-defendant at the time when appearance of appellant was necessary. Later on, when appellant-IFCI contacted to its counsel, then he informed that suit has been decreed ex parte vide judgment and decree dated 12.02.2019 and supplied the copy of the judgment. It is stated that though the counsel for appellant had obtained certified copy of the judgment on 20.02.2019, but he never informed the appellant. It has been submitted that on account of negligence on the part of counsel, the party should not be punished and the delay in filing the appeal be condoned. In additional affidavit, it has been stated that since there is no branch/office of appellant-IFCI at Alwar and the office of appellant-IFCI at Jaipur has also been closed for administrative reasons, as such appellant was dependent on the information given by the counsel, who had ensured the appellant that he will inform and shall call upon the authorized person of IFCI Limited as and when it shall be necessary. It has also been stated in the additional affidavit that prior to 04.07.2019, appellant had no knowledge about the judgment and decree dated 12.02.2019. It has also been stated in the additional affidavit that prior to 04.07.2019, appellant had no knowledge about the judgment and decree dated 12.02.2019. 7.1 It has also been stated that property was auctioned by the appellant to the respondent on the principle of ’As is where is basis’ under the SARFAESI Act, 2002, and respondent purchased the property in public auction, having full knowledge of fact that at the time of auction and taking the possession of the property, 24 looms of M/s Modern Syntax (India) Limited, were kept in the premises, which had been attached by the Custom and Excise, Department. These Looms were handed over to respondentplaintiff on Superdari. There was no agreement or condition between the appellant and respondent, for payment of rent or warehousing charges, in case of non-removal of the 24 looms from the property, purchased by the respondent in the public auction. However, learned trial court vide impugned ex parte judgment and decree dated 12.02.2019, has saddled the liability upon the appellant to pay arrears of rent to the tune of Rs.18,00,000/- and regular rent/warehousing charges @ Rs. 50,000/- per month to the plaintiff until removal of 24 looms. 8. Learned counsel for appellant submits that there is no mala fides on the part of appellant in filing first appeal with delay of 57 days and taking the cause assigned by the appellant as ’Sufficient Cause’, delay of 57 days be condoned and the first appeal be considered, heard and decided on merits. He has placed reliance on the judgment delivered in case of Collector (L.A.) Vs. Katiji [ (1987) 2 SCC 107 ] and N. Balakrishnan Vs. M Krishnamurhty [ (1998) 7 SCC 123 ]. On the basis of principles laid down in the aforesaid judgments, it has been urged that court should adopt a liberal approach in construing the term ’Sufficient Cause’ so as to advance substantial justice and since first appeal is a valuable right, therefore, in the interest of justice, the delay of only a period of 57 days, in filing first appeal, may be condoned. 9. Per contra, learned counsel for respondent has fervently and vehemently opposed the application filed under Section 5 of the Act of 1963, seeking condonation of delay, in filing first appeal alleging inter alia that appellant has not given the name of advocate who gave such an assurance as alleged by the appellant. 9. Per contra, learned counsel for respondent has fervently and vehemently opposed the application filed under Section 5 of the Act of 1963, seeking condonation of delay, in filing first appeal alleging inter alia that appellant has not given the name of advocate who gave such an assurance as alleged by the appellant. Respondent has pointed out that appellant-defendant has submitted written statement of the suit before the trial court, but thereafter no one appeared on their behalf, so the trial court passed an order dated 06.05.2016 to proceed ex parte against the defendant. In counter affidavit, it has been contended that on 17.11.2018, Advocate Sh. Sudarshan Pandit appeared on behalf of appellant-defendant before the trial court, but later on he too did not appear on 14.12.2018. Respondent stated that it is not understandable that appellant, which is a Government of India undertaking, did not have a watch upon day-to-day proceedings of the suit. It has been denied that appellant came to now about the judgment and decree dated 12.02.2019 only on 04.07.2019 and it has been contended that appellant himself was negligent in contesting the suit is also negligent in filing the first appeal too after a considerable delay, therefore, the delay is not liable to be condoned. 10. Learned counsel for respondent has argued that the cause assigned by the appellant may not be construed as ’Sufficient Cause’ in the given facts and circumstances and therefore, the delay be declined to be condoned. Learned counsel for respondent has placed reliance on the judgment delivered in case of Oriental Aroma Chemical Industries Ltd. Vs. Gujarat Industrial Development Corporation [ (2010) 5 SCC 459 ] and Maniben Devraj Shah Vs. Municipal Corporation of Brihan, Mumbai [ (2012) 5 SCC 157 ]. 11. Heard. Considered. 12. At the outset, this Court finds that it is not disputed fact between parties that appellant is a Public Financial Institution and a Govt. of India undertaking, which is custodian of the public money. In the additional affidavit of appellant, it has been stated that since there is no branch/office of IFCI at Alwar and the Office of IFCI at Jaipur has also been closed for administrative reasons, therefore, counsel for appellant had ensured that he will inform and shall call upon the authorized person of IFCI Limited as and when it shall be necessary. However, counsel did not call upon the appellant in any manner either in writing or orally at any time and it is a negligence on the part of counsel for appellant for not giving information about the judgment and decree dated 12.02.2019, despite obtaining certified copy of the same on 20.02.2019. It has been stated that appellant-IFCI came to know about the judgment and decree dated 12.02.2019 only on 04.07.2019, when they contacted to his counsel and then he supplied copy of judgment and decree. Respondent in their counter affidavit, has nowhere denied/disputed that there is no branch/office of the appellant-IFCI at Alwar. Undisputedly, respondent himself has indicated the address of appellant-defendant as 61-Nehru Place, New Delhi- 110019. Merely on account of the fact that appellant has not mentioned the name of his advocate, the reason assigned by the appellant that his advocate did not inform about passing of the judgment and decree dated 12.02.2019, cannot be disbelieved. 13. This Court has observed that the respondent has nowhere stated that there is mala fides on the part of appellant for not filing first appeal within statutory period of limitation, if appellant was having knowledge of the judgment and decree dated 12.02.2019. Even if for a moment, it is assumed that the appellant has been remained negligent in not filing first appeal within time, but no mala fides have been attributed on the part of appellant and therefore it may not be assumed that the delay of 57 days is deliberate and suffer from any mala fides. This Court finds that though there may be negligence on the part of appellant in not pursuing the proceedings of suit vigilantly and appellant remained ex parte, after filing written statements, nevertheless it is undisputed that delay in filing first appeal is only for a short period of 57 days. It is difficult to believe that the appellant has gained any benefit, by not filing the first appeal within time. 14. It cannot be disputed that first appeal is a statutory and valuable right of party, which should not be curtailed ordinarily, that too only on account of delay of 57 days, which too does not suffer from mala fides. Stakes of appellant in the first appeal are high. 15. 14. It cannot be disputed that first appeal is a statutory and valuable right of party, which should not be curtailed ordinarily, that too only on account of delay of 57 days, which too does not suffer from mala fides. Stakes of appellant in the first appeal are high. 15. It is also well settled that the term ’Sufficient Cause’ should be construed liberally and there is no hard and fast straight jacket formula to determine as to what cause is sufficient and what is not. It depends upon the facts and circumstances of each case. This Court is not oblivious to the legal position that first appeal is a statutory and valuable right of party, which should not be curtailed ordinarily and the court should made an endeavor to decide the first appeal on merits, instead of dismissing the first appeal for technical grounds. In case at hand, delay in filing first appeal is only for a period of 57 days, which too does not suffer from any mala fides and stakes of appellant, being a public sector institution, are high in the present first appeal. 16. This Court deems it just and proper to refer few of the judgments of Hon’ble the Supreme Court, in order to gather fundamental principles, which are required to be taken into consideration at the time of considering application for condonation of delay in filing appeals and in what manner, the term ’Sufficient Cause’ should be construed: 16.1 In case of Improvement Trust, Ludhiana Vs. Ujagar Singh [ (2010) 6 SCC 786 ], the property of trust was auctioned in execution of award for compensation. Appellant-trust filed application under Order 21 Rule 90 CPC, but such application was dismissed in default due to non-appearance. Appellant-trust filed Miscellaneous Appeal before the District Judge, Ludhiana, but the said appeal was barred by limitation by two months and few days. So an application under Section 5 of the Limitation Act, was filed to condone the delay, but the appellate court dismissed the application stating that no good and sufficient ground was given to condone the delay and consequently the appeal was also dismissed. Appellant preferred appeal before the High Court, which was treated as Civil Revision, but the same was also dismissed by the High Court. Review application was filed by appellant but the same too was dismissed. Matter went to the Supreme Court. Appellant preferred appeal before the High Court, which was treated as Civil Revision, but the same was also dismissed by the High Court. Review application was filed by appellant but the same too was dismissed. Matter went to the Supreme Court. Hon’ble the Supreme Court, while allowing the appeal and condoning the delay, observed that ’Be that as it may, we are of the opinion that the delay in filing first appeal before the District Judge, Ludhiana, for setting aside the sale has not been so huge warranting its dismissal on such hypertechnical ground’. It was observed that no sooner the appellant came to know about dismissal of its objection filed before the executing court, under Order 21 Rule 90 CPC, he made inquiries and filed the appeal. Honble the Supreme Court clearly observed that ’it is pertinent to point out that unless mala fides are writ large on the conduct of party, generally as a normal rule, delay should be condoned. In the legal arena, an attempt should always be made to allow the matter to be contested on merits rather than to through it out on such technicalities.’ 16.2 . In case of Ram Nath Sao Vs. Gobardhan Sao [ (2002) 3 SCC 195 ], the expression of ’Sufficient Cause’ within the meaning of Section 5 of the Limitation Act, 1963, was considered by Hon’ble the Supreme Court, placing reliance on its previous judgments delivered in case of State of W.B. Vs. Administrator, Howrah Municipality [ (1972) 1 SCC 366 ], it was held that while considering the expression ’Sufficient Cause’ within the meaning of Section 5 of the Act of 1963, this Court laid down that the said expression should receive liberal construction so as to advance substantial justice when no negligence or inaction or want of bona fides is imputable to a party. The Hon’ble Supreme Court, after discussing the umpteen number of judgments, observed that ’Acceptance of explanation furnished should be the rule and refusal, an exception, more so when no negligence or inaction or want of bona fides can be imputed to the defaulting party.’ It was observed that while considering the matter, the courts have to strike a balance between the resultant effect of the order it is going to pass upon the parties either way as whereas by taking a pedantic and hypertechnical view, the explanation furnished for condonation of delay should not be rejected when stakes are high and/or arguable points of fact and law involved in the case, causing enormous loss and irreparable injury to the party against whom the lis terminates, either by default or inaction and defeating valuable right of such party to have a decision on merits. Simultaneously, if a valuable right has accrued to the opposite party, same should not be lightly defeated by condoning the delay in a routine-like manner. 16.3 In the case of N. Balakrishnan (Supra), there was a delay of 883 days in filing application for setting aside ex parte decree for which application for condonation of delay was filed. The trial court having found that sufficient cause was made out for condonation of delay, condoned the delay but when the matter was taken to the High Court of Judicature at Madras in a revision application under Section 115 of the Code, it was observed that the delay of 883 days in filing the application was not properly explained and it was held that the trial court was not justified in condoning the delay resulting into reversal of its order whereupon this Court was successfully moved which was of the view that the High Court was not justified in interfering with order passed by trial court whereby delay in filing the application for setting aside ex parte decree was condoned and accordingly order of the High Court was set aside. K.T.Thomas, J., speaking for the Court succinctly laid down the law observing thus in paras 8, 9 and 10: "8. The appellant’s conduct does not on the whole warrant to castigate him as an irresponsible litigant. What he did in defending the suit was not very much far from what a litigant would broadly do. K.T.Thomas, J., speaking for the Court succinctly laid down the law observing thus in paras 8, 9 and 10: "8. The appellant’s conduct does not on the whole warrant to castigate him as an irresponsible litigant. What he did in defending the suit was not very much far from what a litigant would broadly do. Of course, it may be said that he should have been more vigilant by visiting his advocate at short intervals to check up the progress of the litigation. But during these days when everybody is fully occupied with his own avocation of life an omission to adopt such extra vigilance need not be used as a ground to depict him as a litigant not aware of his responsibilities, and to visit him with drastic consequences. 9. It is axiomatic that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on wholly untenable grounds or arbitrary or perverse. But it is a different matter when the first court refuses to condone the delay. In such cases, the superior court would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammeled by the conclusion of the lower court. 10. The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice. 10. The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice. The time- limit fixed for approaching the court in different situations is not because on the expiry of such time a bad cause would transform into a good cause." 16.4 In case of Oriental Aroma Chemical Industries (Supra), as relied upon by learned counsel for respondent, the Hon’ble Supreme Court affirmed the principles laid down in respect of condonation of delay in cases of Collector (L.A.) (Supra) and N. Balakrishnan (Supra), as referred by learned counsel for appellant and has observed in Paras 14 & 15 as under: "14. We have considered the respective submissions. The law of limitation is founded on public policy. The legislature does not prescribe limitation with the object of destroying the rights of the parties but to ensure that they do not resort to dilatory tactics and seek remedy without delay. The idea is that every legal remedy must be kept alive for a period fixed by the legislature. To put it differently, the law of limitation prescribes a period within which legal remedy can be availed for redress of the legal injury. At the same time, the courts are bestowed with the power to condone the delay, if sufficient cause is shown for not availing the remedy within the stipulated time. 15. The expression "sufficient cause" employed in Section 5 of the Limitation Act, 1963 and similar other statutes is elastic enough to enable the courts to apply the law in a meaningful manner which sub serves the ends of justice. Although, no hard and fast rule can be laid down in dealing with the applications for condonation of delay, this Court has justifiably advocated adoption of a liberal approach in condoning the delay of short duration and a stricter approach where the delay is inordinate - Collector (L.A.) Vs. Katiji [ (1987) 2 SCC 107 ], N. Balakrishnan Vs. M. Krishnamurthy [ (1998) 7 SCC 123 ] and Vedabai Vs. Shantaram Baburao Patil [ (2001) 9 SCC 106 ]." In this case, the appellant was allotted a peace of land for setting up an industrial unit subject to the terms embodied in the agreement of licence, which provided for payment of 70% of the cost of agreed quantity of water irrespective of consumption. Shantaram Baburao Patil [ (2001) 9 SCC 106 ]." In this case, the appellant was allotted a peace of land for setting up an industrial unit subject to the terms embodied in the agreement of licence, which provided for payment of 70% of the cost of agreed quantity of water irrespective of consumption. Respondents demanded water charges to the tune of Rs.22,96,207/-, which was challenged by the appellant by filing civil suit. The suit was decreed vide judgment dated 30.10.2004 and appellant was held not liable to pay minimum charges for consumption of water, claimed by respondents. Respondents filed an appeal against the judgment and decree dated 30.10.2004, which was delayed by a period of four years and twenty eight days. The Division Bench of High Court, condoned the delay by making cryptic observation that the cause shown by respondent is sufficient and period of delay was treated as 1067 days, whereas the period of delay was four years and twenty eight days. This order of division bench was challenged by the appellant before the Supreme Court. Hon’ble the Supreme Court, on appreciation of the details for explaining the delay of more than four years, observed that respondents did not approach High Court with clean hands. It was observed that Law Department of respondent was very much aware of the proceedings of first as well as the second suit and an officer of the rank of General Manager (Law) issued instructions to advocate to appear and file Vakalatnama in the month of May 2001, thereafter, again in Month of May 2005, however, respondent boldly stated that Law Department came to know about the ex parte decree in January/February 2008. The Supreme Court noticed that respondents went to the extent of suggesting that the parties may have arranged or joined hands with some employee of the Corporation and that may be the reason why after engaging advocates, nobody contacted to the Law Department for the purpose of filing written statement. The Supreme Court noticed that the conduct of respondents is unfair and mala fides, therefore, without proper explanation of huge delay of four years and twenty eight days, the Supreme Court declined to condone the delay. The Supreme Court noticed that the conduct of respondents is unfair and mala fides, therefore, without proper explanation of huge delay of four years and twenty eight days, the Supreme Court declined to condone the delay. The facts of the present case are entirely different as discussed hereinabove and in the present case the delay is only of 57 days and further no mala fides are attributed on the part of appellant, therefore, the ratio propounded by Hon’ble the Supreme Court in case of Oriental Aroma Chemical Industries (Supra) is not applicable to the present case. 16.5 In case of Maniben Devraj Shah Vs. Municipal Corporation of Brihan, Mumbai [ (2012) 5 SCC 157 ], as referred by learned counsel for respondent, after considering all the previous judgments referred by appellant as well as respondent, the Hon’ble Supreme Court observed that a distinction must be made between the delay of few days and inordinate delay, causing prejudice to the other side. For ready reference, Para Nos.20, 21, 22, 23 and 24 are being extracted as under: "20. In Vedabai v. Shantaram Baburao Patil [ (2001) 9 SCC 106 ], the Court observed that a distinction must be made between a case where the delay is inordinate and a case where the delay is of few days and whereas in the former case the consideration of prejudice to the other side will be a relevant factor, in the latter case no such consideration arises. 21. In State of Nagaland v. Lipok Ao [ (2005) 3 SCC 752 ], the Court referred to several precedents on the subject and observed that the proof of sufficient cause is a condition precedent for exercise of discretion vested in the Court: 8...What counts is not the length of the delay but the sufficiency of the cause and shortness of the delay is one of the circumstances to be taken into account in using the discretion. 22. The Court also took cognizance of the usual bureaucratic delays which takes place in the functioning of the State and its agencies/instrumentalities and observed: 13. 22. The Court also took cognizance of the usual bureaucratic delays which takes place in the functioning of the State and its agencies/instrumentalities and observed: 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. 23. What needs to be emphasised is that even though a liberal and justice-oriented approach is required to be adopted in the exercise of power under Section 5 of the Limitation Act and other similar statutes, the Courts can neither become oblivious of the fact that the successful litigant has acquired certain rights on the basis of the judgment under challenge and a lot of time is consumed at various stages of litigation apart from the cost. 24. What colour the expression ’sufficient cause’ would get in the factual matrix of a given case would largely depend on bona fide nature of the explanation. If the Court finds that there has been no negligence on the part of the applicant and the cause shown for the delay does not lack bona fides, then it may condone the delay. If, on the other hand, the explanation given by the applicant is found to be concocted or he is thoroughly negligent in prosecuting his cause, then it would be a legitimate exercise of discretion not to condone the delay. 17. If, on the other hand, the explanation given by the applicant is found to be concocted or he is thoroughly negligent in prosecuting his cause, then it would be a legitimate exercise of discretion not to condone the delay. 17. Keeping in mind judgments of Hon’ble the Supreme Court and views opined by the Hon’ble Supreme Court, required to be considered at the time of condonation of delay and at the time of construing the term ’Sufficient Cause’, this Court is of unequivocal opinion that at least for the purpose of condonation of delay in filing first appeal, the term ’Sufficient Cause’ should be construed liberally and unless and until, there are no mala fides attributed on the part of appellant in causing delay in first appeal deliberately and knowingly to achieve some undue advantage, ordinarily the delay should be condoned, more so when the delay is not too much enormous and stakes of appellant are high. Applying such proposition of law to facts of the present case, which have been discussed in detail in foregoing paragraphs, this Court deems it just and proper to condone the delay of 57 days in filing the first appeal. As a result, application (CMCC 1367/2019) filed under Section 5 of the Limitation Act, is allowed and the application (I.A.No.01/2020) also stands disposed of. 18. List the present first appeal for admission on 09.11.2022.