2025 (4) TMI 1528 - SC - Indian Laws

Rejection of Interim Application filed by the petitioner herein under Section 5 of the Limitation Act 1963 - declination to condone the delay of 301 days in filing the main appeal under Section 13(1-A) of the Commercial Courts Act 2015 - HELD THAT - One of the avowed objects of the provisions of the Commercial Courts Act read with amended provisions of CPC applicable to the Commercial Courts is to ensure that there is no unnecessary delay in disposal of the commercial suit. Once specific time lines are fixed and there is a strict procedure provided in terms of the Commercial Courts Act parties are by the statute put to notice that they have to very carefully contest the suits filed as commercial suits and that failing to comply with statutory timelines and a strict procedure certain adverse consequences may flow on account of lack of application by a contesting party. Merely because Order XX Rule I enjoins a duty upon the commercial courts to provide the copies of the judgment that does not mean that the parties can shirk away all responsibility of endeavoring to procure the certified copies thereof in their own capacity. Any such interpretation would result in frustrating the very fundamental cannons of law of limitation and the salutary purpose of the Act 2015 of ensuring timely disposals. Conclusion - The High Court did not err in rejecting the condonation of delay application. The limitation period for filing the appeal commenced from the date of pronouncement of the judgment irrespective of whether the certified copy was provided or not. The petitioners failure to apply for the certified copy within the limitation period and their inaction for over 300 days constituted negligence. Petition dismissed.

Issues Presented and Considered

The core legal questions considered by the Court were:

(i) Whether the High Court erred in dismissing the commercial appeal on the ground of limitation without properly considering the amended provisions of Order XX Rule 1 of the Code of Civil Procedure (CPC) as applicable to Commercial Courts under the Commercial Courts Act, 2015;

(ii) Whether the pronouncement of judgment in open court under the amended Order XX Rule 1 CPC is the starting point of limitation, or whether limitation begins only after a free copy of the judgment is provided to the parties as mandated by the said provision;

(iii) Whether the expression "pronounced judgment and copies thereof shall be issued to all the parties to the dispute through electronic mail or otherwise" in Order XX Rule 1 CPC is mandatory or directory;

(iv) Whether the delay of 301 days in filing the appeal under Section 13(1-A) of the Commercial Courts Act, 2015, can be condoned under Section 5 of the Limitation Act, 1963;

(v) The applicability and interpretation of Section 5 of the Limitation Act, 1963 in the context of appeals under the Commercial Courts Act, 2015, especially in light of the object of speedy disposal of commercial disputes.

Issue-wise Detailed Analysis

1. Interpretation of Order XX Rule 1 CPC as amended by the Commercial Courts Act, 2015

Legal Framework and Precedents: The Commercial Courts Act, 2015, aims at speedy resolution of commercial disputes and amends several provisions of the CPC, including Order XX Rule 1 CPC. The amended provision mandates that the Commercial Court shall pronounce judgment within ninety days of conclusion of arguments and issue copies thereof to all parties via electronic mail or otherwise.

Precedents cited included Housing Board, Haryana v. Housing Board Colony Welfare Association and Others, and Sagufa Ahmed and Others v. Upper Assam Polywood Products Private Limited and Others, where the Court held that where rules enjoin a duty of communicating an order or judgment, the limitation period runs from the date of such communication.

Court's Interpretation and Reasoning: The Court examined whether the issuance of judgment copies is mandatory for the commencement of limitation. It held that the provision in Order XX Rule 1 CPC is directory and not mandatory. The Court rejected the contention that limitation would not commence until the copy of the judgment is provided by the Registry, even if not demanded by the parties.

The Court distinguished the facts of Housing Board, Haryana, where active efforts were made by the appellants to procure the order and the delay was due to the order not being signed and communicated. Here, no such efforts were made during the limitation period to obtain the certified copy. Similarly, the reliance on Sagufa Ahmed was found misplaced as the appellants there had made efforts to procure the order.

Key Evidence and Findings: The appellants delayed applying for the certified copy until eight months after the judgment pronouncement and 150 days after the limitation period expired. The Court found this inaction and negligence fatal to their claim for condonation.

Application of Law to Facts: The Court emphasized that the object of the Commercial Courts Act, 2015 is speedy disposal of commercial disputes. Allowing parties to delay appeals on the ground of non-communication of judgment copies without making efforts to procure them would frustrate this object. Therefore, parties must be diligent in procuring copies themselves if not provided within a reasonable time.

Treatment of Competing Arguments: The petitioners argued for a mandatory interpretation of the provision to protect litigants from delay caused by non-communication. The Court rejected this, reasoning that commercial entities, especially government undertakings, cannot be equated with individual consumers who may be financially burdened by obtaining certified copies.

Conclusion: The Court concluded that the limitation period begins from the date of pronouncement of judgment and not from the date of communication of the certified copy. The provision in Order XX Rule 1 CPC is directory, and parties must apply for copies if not received within reasonable time.

2. Condonation of Delay under Section 5 of the Limitation Act, 1963

Legal Framework and Precedents: Section 5 of the Limitation Act, 1963 empowers courts to condone delay if sufficient cause is shown. The Supreme Court's prior ruling in Government of Maharashtra was pivotal, where it was held that the expression "sufficient cause" is not elastic enough to cover long delays beyond the prescribed appeal period under the Commercial Courts Act, 2015. The Court emphasized that condonation of delay beyond 60 days should be the exception, not the rule, especially given the object of speedy dispute resolution.

Court's Interpretation and Reasoning: The Court applied this precedent to the instant case, where the delay was 301 days, significantly exceeding the 60-day limit plus a reasonable extension. The Court held that such an inordinate delay caused by negligence and lack of bona fide could not be condoned.

Key Evidence and Findings: The judgment was pronounced in the presence of the petitioners' counsel on 09.10.2023. The application for certified copy was made only on 30.08.2024, the copy was ready on 07.09.2024, and the appeal was filed on 04.10.2024. The Court found that the petitioners' legal department and counsel failed in their duty to monitor the case and apply for the certified copy in a timely manner.

Application of Law to Facts: The Court emphasized the duty of litigants, especially government undertakings with legal departments, to diligently track their cases and ensure timely action. The negligence of counsel and legal officers in not applying for the certified copy promptly was held to be a sufficient ground for refusing condonation.

Treatment of Competing Arguments: The petitioners blamed the respondent for not communicating the judgment or demanding payment under the decree. The Court rejected this, stating that the petitioners cannot take advantage of their own negligence or that of their counsel.

Conclusion: The Court dismissed the petition for condonation of delay, holding that the delay of 301 days was inordinate and caused by negligence, and thus not liable to be condoned under Section 5 of the Limitation Act.

Significant Holdings

"Order XX Rule 1 CPC as amended and made applicable to the Commercial Courts is to be treated as only directory and not mandatory. So notwithstanding the provision contained in the amended Order XX Rule 1 CPC (mandating issuance of copies to the parties to the dispute through electronic mail or otherwise), if such copies are not issued within a reasonable time, the parties to the dispute have to apply for the same, and after obtaining it, prefer an appeal within the time prescribed in Section 13(1-A) of the Commercial Courts Act, 2015."

"One of the core tenets of the law of limitation is to enthuse diligence amongst parties as to their rights. The law of limitation cannot be read in such a manner whereby parties stop showing any modicum of regard for their own rights and on the pre-text of untimely communication continue to litigate without being vigilante themselves."

"Given the object sought to be achieved under the Commercial Courts Act, 2015 i.e., the speedy resolution of the disputes, expression 'sufficient cause' in Section 5 of the Limitation Act, 1963 is not elastic enough to cover long delays beyond the period provided by the appeal provision itself; and that the expression 'sufficient cause' is not itself a loose panacea for the ill of pressing negligent and stale claims."

"The delay of 301 days in filing this appeal - way beyond 60 days plus 60 days permitted by the judgment of the Supreme Court to be condoned in exercise of power under Section 5 of the Limitation Act, 1963 - is not liable to be condoned."

"The applicants cannot blame the respondent for not communicating to them about the disposal of the appeal and for not making any demand of payment in terms of the decree of the Commercial Court. They also cannot take advantage of the negligence of the counsel engaged by them in not informing the applicants about the judgment of the Commercial Court."

Core Principles Established

(i) The amended Order XX Rule 1 CPC applicable to Commercial Courts is directory, not mandatory, regarding issuance of judgment copies; limitation period begins from pronouncement of judgment, not from receipt of copy.

(ii) Parties must exercise due diligence in procuring certified copies of judgments if not provided within reasonable time; failure to do so cannot justify delay in filing appeals.

(iii) The object of the Commercial Courts Act, 2015 is speedy resolution of commercial disputes, and the law of limitation must be strictly construed to promote this objective.

(iv) Condonation of delay under Section 5 of the Limitation Act, 1963 in commercial appeals is to be granted sparingly, only in exceptional cases where bona fide and due diligence are shown; long delays caused by negligence are not condonable.

(v) Government instrumentalities litigating as commercial entities are subject to the same strict standards of diligence and limitation as private parties.

Final Determinations on Each Issue

The Court held that the High Court did not err in rejecting the condonation of delay application. The limitation period for filing the appeal commenced from the date of pronouncement of the judgment, irrespective of whether the certified copy was provided or not. The petitioners' failure to apply for the certified copy within the limitation period and their inaction for over 300 days constituted negligence. Consequently, the delay was not liable to be condoned under Section 5 of the Limitation Act, 1963. The petition was dismissed accordingly.

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