Current Affairs

Source: Supreme Court

Why in News?

Recently, the Supreme Court in the matter of M/S North Eastern Chemicals Industries Ltd.& Anr. v. M/S Ashok Paper Mill Ltd. & Anr., has held that an appeal must be filed within a reasonable time when no limitation period has been prescribed for filing an appeal.

What is the Background of M/S North Eastern Chemicals Industries Ltd.& Anr. v. M/S Ashok Paper Mill Ltd. & Anr. Case?

• The Appellant (M/S North Eastern Chemicals Industries Ltd.& Anr.) had received orders to supply certain goods to the Respondents (M/S Ashok Paper Mill Ltd. & Anr.)
  • After doing so, they raised certain bills which were only partly paid by the Respondents.
  • Subsequently, the Respondent was declared a sick company.
• The Appellant filed its claim under Section 16 of Jogighopa Act, 1990 for Rs. 1,58,375/- along with interest.
• The Commissioner of Payments awarded the principle sum but no interest to the Appellant.
• Aggrieved by the non-payment of such interest claimed, a writ petition before the Gauhati High Court was filed seeking direction to the Commissioner to consider an award interest on the principal amount due along with an application under Section 5 of the Limitation Act, 1963 (LA) for condonation of delay.
• The Commissioner, upon consideration of the request for a grant of interest on delayed payment, amounting to 6,83,688/- 8 granted the same.
  • Still aggrieved thereby, the appellants once again knocked on the doors of the High Court.
• The High Court directed that any additional interest, if found payable, should be paid within 60 days of the order.
• Against the said order, the respondents filed Review Application before the Supreme Court which was later allowed by the Court.

What were the Court’s Observations?

• The Bench comprising Justices Abhay S. Oka and Sanjay Karol observed that in the absence of any particular period of time being prescribed to file an appeal, the same would be governed by the principle of reasonable time, for which, by virtue of its very nature, no straitjacket formula can be laid down and it is to be determined as per the facts and circumstances of each case.
• The Court held that when no limitation stands prescribed it would be inappropriate for a Court to supplant the legislature' s wisdom by its own and provide a limitation, more so in accordance with what it believes to be the appropriate period.

What is Section 5 of the Limitation Act, 1963?

About:

• Section 5 of the LA deals with the concept of condonation of delay. It deals with extension of prescribed period in certain cases and states that -

Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.

Explanation. — The fact that the appellant or the applicant was missed by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section.

• The provision of Section 5 of LA does not necessarily imply that the power of the court to condone the delay is circumscribed by an application being filed.
• The power to condone delay can be exercised if the appellant satisfies the court that he had sufficient cause for not filing the appeal within the period prescribed.
• If an appeal is presented out of time in an explainable circumstance without a formal or written application, then the Courts should afford a reasonable opportunity to the parties to amend the matter to avoid miscarriage of justice.
• A written application for claiming relief under Section 5 is not essential and it is open to the Court to give relief without written application under this section if the interest of justice so requires.

Case Laws:

• In Ram Lal v. Rewa Coalfields Ltd. (1962), the Supreme Court held that there are two important considerations which must be kept in mind while considering the condonation of delay:
  • The expiration of the period of limitation gives rise to the legal rights in favor of the decree-holder to treat the decree passed in their favor as binding between the parties. The legal right which is accrued to the decree-holder by lapse of time should not be lightly disturbed.
  • If sufficient cause for the execution of delay is shown, then the discretion is given to the Court to condone the delay and admit the appeal. Proof of sufficient cause is a condition precedent in the exercise of discretionary jurisdiction.
• In Ram Kali Kuer v. Indradeo Chaudhary (1985), the Patna High Court held that section 5 does not provide that an application in writing must be filed before relief under the said provision can be granted.