SUPREME COURT HOLDS WHEN LAW DOES NOT SPECIFY TIME PERIOD FOR FILING APPEAL, COURT MAY ALLOW THE APPEAL BASED ON FACTS AND CIRCUMSTANCES OF THE CASE

A two Judge Bench of the Supreme Court comprising of Justice Abhay S. Oka and Sanjay Karol passed a Judgment dated 11.12.2023 in a recent case of M/S North Eastern Chemicals Industries (P) Ltd.& Anr Vs M/S Ashok Paper Mill (Assam) Ltd. & Anr.  Civil Appeal No. 2669 of 2013 and observed that when a general or specific law doesn’t specify a time limit for filing an appeal, the Court must decide whether to allow the appeal or not based on the facts and circumstances of the case and whether the delay could prejudice the other party.

Facts

i) In the present case, M/s North Eastern Chemicals Industries (P) Ltd., the Claimant-Appellant Company herein received orders from M/S Ashok Paper Mill (Assam) Ltd., the Respondent Company herein to supply certain goods.

ii) The Appellant filed a Claim under Section 16 of the Jogighopa (Assam) Unit of Ashok Paper Mills Limited (Acquisition and Transfer of Undertaking) Act, 1990 (Jogighopa Act) (Appointment of Commissioner of Payments) for a sum of Rs. 1,58,375/- along with interest-against the Respondent Company in CP/Cat.VI/91/153 before the Commissioner of Payments, Assam.

iii) The Sick Industrial Companies (Special Provisions) Act, 1935 designated the Respondent Company as a “Sick Company”. The Government of Assam passed the Jogighopa Act in 1990 to address the industry’s dire need for revitalization. Under the said Jogighopa Act, the Respondent Company was acquired.

iv) The Commissioner of Payments passed an Order dated 30.10.1994 by awarding the sum of principal amount of Rs. 1,58,375/- without interest. The Order was communicated to the Appellant Company by Letter dated 16.07.1997. The Appellant Company accepted the principal amount under protest bearing Letter No. Ref- NECIL/97-98 dated 16.07.1997 and raised grievance in respect of non-payment of any interest for the periods of January 1983 to March 1993 and from March 1993 to the date of payment and claimed the total amount of interest Rs. 21,49, 698/- @ 18% interest per annum .

v) Thereafter, aggrieved by the Order dated 30.10.1994 passed by the Commissioner of Payments for non-payment of the interest, the Appellant Company filed a Writ Petition bearing P. No. 4210 of 1997 before the Guwahati High Court (High Court) seeking direction to the Commissioner of Payments to award interest on the principal amount due. The High Court passed an Order dated 10.11.1997 directing the Commissioner of Payments to consider the claims within a period of 3 months.

vi) Thereafter, the Commissioner of Payments granted the interest of an amount of Rs. 6,83,688/- against the total claim of interest of Rs.21,49,610/- to the Appellant Company.

vii) Aggrieved by the High Court Order dated 10.11.1997 of grant of interest of Rs. 6,83,688/-, the Appellant Company once again filed Writ Petition before the High Court in P./ 4520 / 2002.

viii) The High Court passed an Order dated 19.05.2004 by observing that the entitlement of interest of the Appellant Company could not be questioned and, referred the matter back to the Commissioner of Payments to calculate the interest payable afresh, in accordance with Section 4 of the Interest on Delayed Payments to Small-Scale and Ancillary Industrial Undertakings Act 1993 (1993 Act) (Date from which rate which interest is payable) and under Section 5 of the 1993 Act (Recovery of amount due), if any additional interest is found payable, the same shall be paid within 60 days of the Order.

ix) Aggrieved by the Order of the High Court dated 19.05.2004, the Respondent Company filed a Review Petition before the High Court bearing RP No. 91 of 2004 stating that the amount payable against the bills pending, have already been paid and therefore no ground for re-calculation of interest is made out.

x) The High Court, vide Order dated 20.12.2004, came to the conclusion that the 1993 Act was brought into force, on 23.09.1992, with retrospective effect and the provisions for delayed payment interest was made effective from 23.09.1992. While disposing of the Review Petition, the High Court clarified that interest on delayed payment has to be calculated, with effect from 23.09.1992, on the principal as well as the normal interest due. The High Court dismissed the Review Petition filed by the Respondent Company and directed the Commissioner of Payments to re-calculate the amount of interest in terms of the provisions of the 1993 Act for any amount due on or after 23.09.1992.

xi) The Commissioner refused to pass any direction regarding payment of any further interest to the Appellant, vide Order dated 13.04.2005, bearing No. DI(V)APM/NEC/199/2005/26, in accordance with the instructions provided in the Review Petition filed by the Respondent.

xii) Aggrieved by the Order dated 13.04.2005 of the Commissioner of Payments, the Appellant Company herein filed a Civil Appeal 18 of 2008, before the Ld. District Judge, Kamrup, Guwahati (Trial Court) and also filed an Application under Section 5 of the Limitation Act 1963 (Extension of prescribed period in certain cases) seeking condonation of delay in filing the Appeal.

xiii) The Ld. Trial Court passed an Order dated 14.05.2009, thereby, holding that as no specific time has been provided for preferring an Appeal upon dissatisfaction with the decision of the Commissioner, the Appeal was admitted.

xiv) Aggrieved by the Trial Court Order dated 14.05.2009, the Respondent Company filed a Civil Revision Petition 263/2009 before the High Court.

xv) The High Court passed an Order dated 11.07.2011 and allowed the Civil Revision Petition, thereby, holding that the Appeal was erroneously admitted by the Ld. Trial Court and as a result, the High Court held that Appeal No. 18/2008 is not maintainable on the ground of limitation.

Supreme Court Analysis

Aggrieved by the High Court Order dated 11.07.2011, the Appellant filed Civil Appeal No. 2669 of 2013 before the Hon’ble Supreme Court. The Apex Court passed a Judgment dated 11.12.2023 and made the following questions to be determined in the present case:

A) Whether Article 116 of the Limitation Act 1963, applies to proceedings under the Jogighopa Act.

B) Contingently, if the Limitation Act does not apply then, in the absence of Limitation being placed within the text of the Statute in question, could the Appeal filed against the Order of the Commissioner of Payments be held as maintainable, having been filed after a period of nearly three years from the said order?

1) That the term “Court” is not defined under the Civil Procedure Code 1908 (CPC). The terms ‘decree’ is defined in Section 2(2) and ‘order’ is defined in Section 2(14) of CPC. The said definitions are reproduced as follows:

“Section 2(2) “decree” means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within 1*** section 144, but shall not include.

(a) any adjudication from which an appeal lies as an appeal from an order, or

(b) any order of dismissal for default.

 Explanation. A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final.”

“Section 2(14) “order” means the formal expression of any decision of a Civil Court which is not a decree.”

2) Section 3 of the Indian Evidence Act, 1872 defines the word “Courts” as under:-

“Court: includes all Judges and Magistrates, and all persons, except arbitrators, legally authorised to take evidence.”

3) In Sarathy v. SBI (2000) 5 SCC 355, the Supreme Court made the following observations in respect of the term Court:

“The Court approved the rule laid down in these cases that in order to constitute a court in the strict sense of the term, an essential condition is that the court should have, apart from having some of the trappings of a judicial tribunal, power to give a decision or a definitive judgment which has finality and authoritativeness which are the essential tests of a judicial pronouncement.”

4) That Article 116 of the Limitation Act 1963 provides the following period of limitation for an appeal:

a) To a High Court i.e., 90 days from the date of order/decree; and

b) To any other court from an order, 30 days from the date of order/decree.

5) According to Section 22(6) of the Jogighopa Act (Admission of rejection of claim), the powers vested in the Commissioner of Payments are as follows:

“(6) The commissioner shall have the power to regulate his own procedure in all matters arising out of the discharge of his functions, including the place or places at which he will hold his sittings and shall, for the purpose of making an investigation under this Act, have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908, in respect of the following matters, namely:-

(a) The summoning and enforcing the attendance of any witness and examining him on oath :

(b) The discovery and production of any document or other material object producible as evidence ;

(c) The reception of evidences on affidavits;

(d) The issuing of any commission for the examination of witness.

6) On the perusal of Jogighopa Act, the Supreme Court held that the Commissioner  of Payments, for the purpose of making and conducting investigation under the Act, shall have the powers vested as in a Civil Court under the CPC to the limited extent as mentioned in Section 22(6) (a), (b), (c), (d) hereinabove.

7) That the Supreme Court held that the vesting of selected few powers upon a Tribunal, or as in the present case, a Statutory Authority, does not equate the same to be a Court within the meaning of the CPC.

8) That only certain parts of the Jogighopa Act are governable by CPC.

9) That Section 22 (8) Jogighopa Act which states that in case the Commissioner under Jogighopa Act is the Judge of a High Court, then an Appeal from an Order of such Commissioner shall lie before not less than two Judges of the High Court. Therefore the present Appeal cannot be said to be an Appeal under the CPC governed by Article 116 of the Limitation Act 1963.

10) In State of Punjab & Ors. v. Bhatinda District Cooperative Milk Producers Union (2007) 11 SCC 363, the Supreme Court observed in respect of the exercise of a statutory right.

“18. It is trite that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period. What, however, shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors.”

11) In Jagdish v. State of Karnataka (2021) 12 SCC 812 the Supreme Court held that where the statute in question does not prescribe a limitation, the rights conferred therein must be exercised within a reasonable time.

12) In SEBI v. Bhavesh Pabari (2019) 5 SCC 90 the Supreme Court held that the reasonable time concept has to be applied and judged in each case as per its own peculiar facts.

13) In Ajaib Singh v. Sirhind Coop. Marketing-cum-Processing Service Society Ltd (1999) 6 SCC 82 the Supreme Court held that when the defense of delay is used in a circumstance where there is no statute-mandated limitation, the party must demonstrate the precise harm or loss they incur if the delay is allowed. To put it another way, in the absence of a specified restriction, it would be wrong for judges to reject a plea based only on delay without first considering the type of laws or prejudice that the opposing party may have suffered in the particular facts and circumstances of the case.

14) Therefore, the Supreme Court came to a conclusion that in the cases where there is no specific limitation provided by the Limitation Act or by the special statute governing the dispute, the court must conduct a comprehensive review of the case facts and circumstances in order to determine whether a delay could prejudice one party.

15) Hence, applying the aforesaid principles to the present case, the Apex Court held that the Jogighopa Act does not provide for any specific time period within which appeal has to be filed against the Order of the Commissioner of Payments. Therefore, the Appellant’s Appeal cannot be said to be barred by time.

Conclusion

Thus, based on the aforesaid observations, the Supreme Court allowed the Appeal filed by the Appellant Company and remitted the matter back to the Ld. Trial Court to determine whether the Respondent Company is liable to pay the interest or not. As result, the Order of the High Court dated 11.07.2011 was set aside.

K. Suneel Kumar

Associate

The Indian Lawyer