2011 (2) TMI 1635 - HC - Indian Laws

Summary

Issues:
Delay in filing application to set aside exparte decree under Sec.5 of Limitation Act.

Analysis:
The appeal arose from the dismissal of an application to set aside an exparte decree due to a delay of 1932 days in filing the application. The Appellant argued that the delay was due to the company being declared as a Sick company by BIFR under Sec.22 of SICA, which suspended proceedings before the Court. The Respondent contended that the delay was not satisfactorily explained and that the Appellant had knowledge of the decree but failed to act promptly.

The Respondent sent a letter in 2006 requesting settlement of dues, which was acknowledged by an employee of the Appellant. The single Judge held that the Appellant had knowledge of the decree and should have taken steps to set it aside promptly. The Appellant argued that the delay should be condoned due to the BIFR proceedings and the bar under Sec.22 of SICA.

The main contention was whether the delay was satisfactorily explained and if the Appellant had notice of the decree. The Court emphasized the importance of proving sufficient cause for delay under Sec.5 of the Limitation Act and the discretion vested in the Court to condone delay.

The Court considered the explanation provided by the Appellant, who engaged counsel in 2001 and claimed to have no knowledge of the decree until 2006. The Appellant argued that the employee who received the letter had already left the company, and thus, no negligence could be attributed to them.

The Court held that the delay was satisfactorily explained by the Appellant, especially considering the BIFR proceedings and the circumstances surrounding the receipt of the letter. The single Judge's order was set aside, and the Appellant was directed to file a new application, which the Judge was requested to consider.

In conclusion, the Court allowed the appeal, emphasizing the need for a liberal approach in condoning delay while also considering the circumstances and explanations provided by the parties involved.