In a fit case in which a party has otherwise acted bona fide and not in a negligent manner, a short delay beyond such period can, in the discretion of the court, be condoned, always bearing in mind that the other side of the picture is that the opposite party may have acquired both in equity and justice, what may now be lost by the first party’s inaction, negligence or laches. (Para 61)
GOVERNMENT OF MAHARASHTRA (WATER RESOURCES DEPARTMENT) REPRESENTED BY EXECUTIVE ENGINEER V/S M/S BORSE BROTHERS ENGINEERS & CONTRACTORS PVT. LTD.
Civil Appeal No. 995 Of 2021 (@ SLP (Civil) No.665 of 2021)
Decided On 19th March 2021
A Three-Judge Bench of the Hon’ble Supreme Court comprising Justice R. F. Nariman, Justice B.R. Gavai, and Justice Hrishikesh Roy ruled over the clubbed appeals where Condonation in delay was allowed to various government wings even though there was no sufficient cause to explain the delays.
In two of the three appeals before us, the High Courts of Bombay and Delhi dismissed the appeals filed by the Government of Maharashtra and by the Union of India respectively, refusing to condone the delay in the filing of the appeal under section 37 of the Arbitration and Conciliation Act, 1996 [“Arbitration Act”] beyond 120 days. In the third appeal, the High Court of Madhya Pradesh refused to follow the judgment of this Court in N.V. International v. State of Assam, (2020) 2 SCC 109 [“N.V. International”] stating that there is a conflict between this judgment and the judgment of a larger Bench of this Court reported in Consolidated Engg. Enterprises v. Irrigation Deptt., (2008) 7 SCC 169 [“Consolidated Engg.”]. It was, therefore, held that it was open for the High Court to condone the delay applying section 5 of the Limitation Act, 1963 [“Limitation Act”] and, as a matter of fact, a delay of what was stated to be 57 days was condoned.
The Appellants argued that (i) Section 33 of the Arbitration Act contemplates correction and interpretation of an award, the arbitral tribunal being clothed with the power to extend time without there being any outer limit. (ii) a limitation period of 60 days was laid down by section 13(1A) of the Commercial Courts Act, and though section 14 thereof commands that expeditious disposal of appeals take place within a period of six months from the date of filing such appeal, neither of the two provisions bound appellate courts not to apply section 5 of the Limitation Act to relax the period of limitation in deserving cases.
The Respondents argued that: (i) The Commercial Courts Act and in particular, on sections 13(1A) and 14, to show that the whole object of speedy disposal of appeals contained in the Commercial Courts Act would be given a go-bye if long periods of delay beyond 30 days are to be condoned since the appeal itself has to be decided within a 10period of six months. (ii) Once section 5 of the Limitation Act applies, the Court cannot impose any limits on the expression “sufficient cause” and even if there are long delays and sufficient cause is made out, such delays can be condoned.
The main object of the Arbitration Act requiring speedy resolution of disputes would be the most important principle to be applied when applications under section 5 of the Limitation Act are filed to condone delay beyond 90 days and/or 30 days depending upon whether Article 116(a) or 116(b) or 117 applies.
In the Civil Appeal arising out of SLP (C) No. 665 of 2021, the impugned judgment of the High Court of Bombay, dated 17.12.2020, has found that the Govt of Maharashtra had not approached the court bona fide because the certified copy was to be handed over to Mr. A.D. Patil of the Irrigation Department, Dhule, who is a staff from the office of the applicant. Hence it is clear that the certified copy was ready and was to be delivered on 27.05.2019. [In spite] of such a stand and document, the applicant has not controverted this or has not come up with any other stand touching this aspect. It is therefore apparent that the applicant is not coming to the Court with clean hands even while seeking the discretionary relief of condonation of delay. Apart from this, there is a long delay of 131 days beyond the 60- day period provided for filing an appeal under section 13(1A) of the Commercial Courts Act. There is no explanation worth the name contained in the condonation of delay application, beyond the usual file-pushing and administrative exigency. This appeal is therefore dismissed.
The queries as to the application of section 5 of the Limitation Act to appeals are governed by a uniform 60-day period of limitation. At one extreme, we have the judgment in N.V. International (supra) which does not allow condonation of delay beyond 30 days, and at the other extreme, we have an open-ended provision in which any amount of delay can be condoned, provided sufficient cause is shown. It is between these two extremes that we have to steer a middle course.
In the Civil Appeal arising out of SLP (C) No. 15278 of 2020, the impugned judgment of the High Court of Madhya Pradesh dated 27.01.2020 relies upon Consolidated Engg. (supra) and thereby states that the judgment of this Court in N.V. International (supra) would not apply. The judgment of the High Court is wholly incorrect inasmuch as Consolidated Engg. (supra) was a judgment which applied the provisions of section 14 of the Limitation Act and had nothing to do with the application of section 5 of the Limitation Act. N.V. International (supra) was a direct judgment which applied the provisions of section 5 of the Limitation Act and then held that no condonation of delay could take place beyond 120 days. The High Court was bound to follow N.V. International (supra), as on the date of the judgment of the High Court, N.V. International (supra) was a judgment of two learned judges of the Supreme Court binding upon the High Court by virtue of Article 141 of the Constitution. On this score, the impugned judgment of the High Court deserves to be set aside. (Para 64)
Given the aforesaid and the object of speedy disposal sought to be achieved both under the Arbitration Act and the Commercial Courts Act, for appeals filed under section 37 of the Arbitration Act that are governed by Articles 116 and 117 of the Limitation Act or section 13(1A) of the Commercial Courts Act, a delay beyond 90 days, 30 days or 60 days, respectively, is to be condoned by way of exception and not by way of rule. In a fit case in which a party has otherwise acted bona fide and not in a negligent manner, a short delay beyond such period can, in the discretion of the court, be condoned, always bearing in mind that the other side of the picture is that the opposite party may have acquired both in equity and justice, what may now be lost by the first party’s inaction, negligence or laches. (Para 61)
In the Civil Appeal arising out of SLP (C) No. 15278 of 2020 a long delay of 75 days beyond the period of 60 days Despite the fact that a certified copy of the District Court’s judgment was obtained by the respondent on 27.04.2019, the explanations given by the Respondents for the same falls woefully short of making out any sufficient cause.
Also, In the Civil Appeal arising out of SLP (C) Diary No. 18079 of 2020, there is a huge delay of 227 days in filing the appeal, and a 200-day delay in refiling. The facts of this case also show that there was no sufficient cause whatsoever to condone such a long delay.
Hence, the appeals were allowed accordingly.
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