Brushman India Ltd & Anr vs State & Anr

Sanjeev Sachdeva, J

Petitioner impugns order dated 11.11.2009 whereby the application of the respondent seeking condonation of delay in filing a complaint under

section 138 Negotiable Instruments Act, 1881 (hereinafter referred to as the Act) has been allowed and the delay of 45 days in filing the complaint

has been condoned.

This petition was earlier dismissed by this court by order dated 19.12.2011. In Special Leave Petition (Crl) No. 3358 of 2012 the Supreme Court of

India by order dated 08.05.2014 set aside order of this Court dated 19.12.2011 and remanded the matter to this court for consideration of the entire

matter with regard to the issue of condonation of delay.

The contention of the petitioner is that the Respondent Bank was extremely negligent and has not explained each days’ delay. It is contended

that the explanation given by the respondent that there was non-availability of a constituted attorney in a particular Department could not be

considered as a sufficient cause within the meaning of section 142 of the Act. It is further contended that there was a Regional Chief Executive

available with the respondents even when the Senior Relationship Manager who was the constituted attorney had resigned and as such the complaint

could have been filed through the Regional Chief Executive. It is contended that the respondent bank was highly negligent and as such the trial court

erred in condoning the delay of 45 days in filing the complaint.

Per contra, it is the case of the respondent that the constituted attorney who was authorised and dealing with the subject account had tendered her

resignation and it took some time in appointment of another person to substitute her and execution of the power of attorney in favour of that individual

authorising him to deal with the subject complaint. Thus, a delay of 45 days took place in instituting the complaint. It is contended that a bona fide

litigant should not be made to suffer by taking a highly technical approach in condonation of delay.

Facts in brief are that. Petitioner had availed an overdraft facility of Rs. 3 crores and in discharge of the outstanding balance issued a cheque on

23.11.2008 in the sum of Rs. 3 crores which was dishonoured on 28.2.2009 for the reason “Exceeds Arrangementâ€. Statutory notice under

section 138 negotiable instruments act was issued on 15.03.2009 and was delivered on 27.03.2009. The 15 day period provided by the statutory notice

expired on 11.04.2009. The 30 day period prescribed for filing the complaint expired on 10.05.2009. Subject complaint was filed on 25.06.2009 with a

delay of 45 days.

Application under section 142 proviso was filed seeking condonation of delay of 45 days contending that the constituted attorney of the respondent

had tendered her resignation on 10.02.2009 which was accepted on 15.04.2009. The 30 day period for filing the complaint expired on 10.05.2009. The

new attorney joined the office on 18.05.2009. A power of attorney authorising him was executed on 03.06.2009 at the Bombay office. The power of

attorney was made available to him on 14.06.2009 by which time the courts had closed for summer vacations. The courts were closed till 24.06.2009

and the subject complaint was filed on reopening on 25.06.2009.

The Trial Court inter alia held that “…….Further it has to be kept in mind that technicalities of law cannot come into the way of substantial

justice.

The important condition which is to govern the discretion of the court is the potentiality of the prejudice or injustice which is likely to be caused to

the other side. One cannot lose sight of the fact that the complainant is a banking institution and not a private individual and there might be a delay in

completing necessary formalities to engage the new Authorized Representative. Considering the fact that the complainant is a banking Institution in

which public money is also involved and also the fact that a huge amount of Rs. 3 Crores is involved in the present case, I am of the considered

opinion that the interest of justice would be met if the delay in filing the present complaint case is condoned as the grounds taken by the complainant

are believable and the application is duly supported by the affidavit of the Authorized Representative of the complainant and there is no reason to

disbelieve the averments made by the complainant at this stage.â€​

Section 142 negotiable instruments act reads as under:

“142. Cognizance of offences.-

Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974).-

(a) No court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case

may be, the holder in due course of the cheque;

(b) Such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138:

Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had

sufficient cause for not making a complaint within such period.

(c) No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section

138.â€​

It may be noticed that proviso to section 142 was added by an amendment to the Act. Prior to the amendment there was no power of condonation

of delay. If the complaint was not filed within the prescribed limitation of 30 days, no court could take cognizance of the complaint.

The Supreme Court of India in Pawan Kumar Ralli v. Maninder Singh Narula, (2014) 15 SCC 24 5has held that the remedy of seeking

condonation of delay has been provided to enable a genuine litigant to pursue his case against a defaulter by overcoming the technical difficulty of

limitation.

Relying upon various judgments, the Supreme Court of India in Maniben Devraj Shah v. Municipal Corpn. of Brihan Mumbai, (2012) 5 SCC 157

explained the idea underlying concept of limitation and the approach to be adopted by courts while dealing with an application seeking condonation of

delay. The Supreme Court inter alia held:

“14. We have considered the respective arguments/submissions and carefully scrutinised the record. The law of limitation is founded on public

policy.

The Limitation Act, 1963 has not been enacted with the object of destroying the rights of the parties but to ensure that they approach the court for

vindication of their rights without unreasonable delay. The idea underlying the concept of limitation is that every remedy should remain alive only till

the expiry of the period fixed by the legislature. At the same time, the courts are empowered to condone the delay provided that sufficient cause is

shown by the applicant for not availing the remedy within the prescribed period of limitation.

The expression “sufficient cause†used in Section 5 of the Limitation Act, 1963 and other statutes is elastic enough to enable the courts to

apply the law in a meaningful manner which serves the ends of justice. No hard-and-fast rule has been or can be laid down for deciding the

applications for condonation of delay but over the years this Court has advocated that a liberal approach should be adopted in such matters so that

substantive rights of the parties are not defeated merely because of delay.

In Ramlal v. Rewa Coalfields Ltd. [AIR 1962 SC 361] this Court while interpreting Section 5 of the Limitation Act, laid down the following

proposition: (AIR pp. 363-64, para 7)

“7. In construing Section 5 (of the Limitation Act) it is relevant to bear in mind two important considerations. The first consideration is that the

expiration of the period of limitation prescribed for making an appeal gives rise to a right in favour of the decree-holder to treat the decree as binding

between the parties. In other words, when the period of limitation prescribed has expired the decree-holder has obtained a benefit under the law of

limitation to treat the decree as beyond challenge, and this legal right which has accrued to the decree-holder by lapse of time should not be light-

heartedly disturbed. The other consideration which cannot be ignored is that if sufficient cause for excusing delay is shown discretion is given to the

court to condone delay and admit the appeal. This discretion has been deliberately conferred on the court in order that judicial power and discretion in

that behalf should be exercised to advance substantial justice.â€​

In Collector (LA) v. Katiji [(1987) 2 SCC 107 ]this Court made a significant departure from the earlier judgments and observed: (SCC pp. 108-09,

para 3)

“3. The legislature has conferred the power to condone delay by enacting Section 5 of the Limitation Act of 1963 in order to enable the courts to

do substantial justice to parties by disposing of matters on ‘merits’. The expression ‘sufficient cause’ employed by the legislature is

adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justiceâ€"that being the life-purpose for

the existence of the institution of courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in

this Court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted

on principle as it is realised that:

(1) Ordinarily a litigant does not stand to benefit by lodging an appeal late.

(2) Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against

this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.

(3) ‘Every day's delay must be explained’ does not mean that a pedantic approach should be made. Why not every hour's delay, every second's

delay? The doctrine must be applied in a rational common sense pragmatic manner.

(4) When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the

other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.

(5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not

stand to benefit by resorting to delay. In fact he runs a serious risk.

(6) It must be grasped that judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of

removing injustice and is expected to do so.

Making a justice-oriented approach from this perspective, there was sufficient cause for condoning the delay in the institution of the appeal. The fact

that it was the ‘State’ which was seeking condonation and not a private party was altogether irrelevant. The doctrine of equality before law

demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in an even-handed manner.

There is no warrant for according a step-motherly treatment when the ‘State’ is the applicant praying for condonation of delay. In fact

experience shows that on account of an impersonal machinery (no one in charge of the matter is directly hit or hurt by the judgment sought to be

subjected to appeal) and the inherited bureaucratic methodology imbued with the note-making, file-pushing, and passing-on-the-buck ethos, delay on its

part is less difficult to understand though more difficult to approve. In any event, the State which represents the collective cause of the community,

does not deserve a litigant-non-grata status. The courts therefore have to be informed with the spirit and philosophy of the provision in the course of

the interpretation of the expression ‘sufficient cause’. So also the same approach has to be evidenced in its application to matters at hand with

the end in view to do even-handed justice on merits in preference to the approach which scuttles a decision on merits.â€​

(emphasis in original)

In N. Balakrishnan v. M. Krishnamurthy [(1998) 7 SCC 123 ], the Court went a step further and made the following observations: (SCC pp. 127-

28, paras 9, 11 & 13)

“9. It is axiomatic that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not say that such discretion

can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes

delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range

can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient, it is the result of positive exercise of

discretion and normally the superior court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on

wholly untenable grounds or arbitrary or perverse. But it is a different matter when the first court refuses to condone the delay. In such cases, the

superior court would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even

untrammelled by the conclusion of the lower court.

***

Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their

remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. The law of limitation fixes a lifespan

for such legal remedy for the redress of the legal injury so suffered. Time is precious and wasted time would never revisit. During the efflux of time,

newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a lifespan must be fixed for each

remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. The law of limitation is thus founded

on public policy. It is enshrined in the maxim interest reipublicae up sit finis litium (it is for the general welfare that a period be put to litigation). Rules

of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy

promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time.

***

It must be remembered that in every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn

down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the

court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party

deliberately to gain time, then the court should lean against acceptance of the explanation. While condoning the delay, the court should not forget the

opposite party altogether. It must be borne in mind that he is a loser and he too would have incurred quite large litigation expenses. It would be a

salutary guideline that when courts condone the delay due to laches on the part of the applicant, the court shall compensate the opposite party for his

loss.â€​

***** ***** *****

In Vedabai v. Shantaram Baburao Patil [(2001) 9 SCC 106] , the Court observed that a distinction must be made between a case where the delay

is inordinate and a case where the delay is of few days and whereas in the former case the consideration of prejudice to the other side will be a

relevant factor, in the latter case no such consideration arises.

***** ***** *****

What colour the expression “sufficient cause†would get in the factual matrix of a given case would largely depend on bona fide nature of the

explanation. If the court finds that there has been no negligence on the part of the applicant and the cause shown for the delay does not lack bona

fides, then it may condone the delay. If, on the other hand, the explanation given by the applicant is found to be concocted or he is thoroughly negligent

in prosecuting his cause, then it would be a legitimate exercise of discretion not to condone the delay.

The Supreme Court of India in several decisions has held that the exercise of the discretionary power can be interfered by the High Court only if

the order passed is violative of some fundamental or basic principle of justice and fair play or suffers from any patent or flagrant error N. Balaji v.

Virendra Singh, (2004) 8 SCC 312 & B.T. Purushothama Rai v. K.G. Uthaya, (2011) 14 SCC 86.

At the cost of repetition, it may be seen that Petitioner had taken an overdraft facility from the respondent bank of Rs. 3 crores. Subject cheque

issued by the petitioner is of Rs. 3 crores. The cheque was dishonoured for the reason “Exceeds Arrangementâ€. Statutory notice under section

138 negotiable instruments act was issued on 15.3.2009 and delivered on 27.3.2009. In the meantime, the constituted attorney of the respondent had

tendered her resignation on 10.02.2009 which was accepted on 15.04.2009. The 15 day period provided by the statutory notice expired on 11.4.2009.

The 30 day period prescribed for filing the complaint expired on 10.05.2009. The new attorney joined the office on 18.05.2009. A power of attorney

authorising him was executed on 03.06.2009 at the Bombay office. The power of attorney was made available on 14.06.2009 by which time the courts

had closed for summer vacations. The courts were closed till 24.06.2009 and the subject complaint was filed on 25.06.2009 with a delay of 45 days.

The delay in this case is not inordinate. Liberal approach has to be adopted while considering an application seeking condonation of delay.

Respondent had rendered a reasonable explanation for the delay in filing the complaint. The delay is only of a few days. Nothing has been pointed out

to show that there was negligence on the part of the respondent or that the delay lacks bona fide. In the facts of the present case refusing to condone

delay of a few days would imply that a meritorious case is being thrown out by adopting a hyper-technical approach. In case delay is condoned no

prejudice would be caused to the petitioner as petitioner would have an opportunity to defend the case on merits.

Further, discretion has been exercised by the trial court in a positive manner to further the cause of justice. As noted above it is the settled

proposition of law that when discretion is exercised by the trial court in a positive manner, the Superior Court is not to interfere with the same unless

the same is contrary to the settled principles of law or is perverse, which is not so in the present case.

Keeping in view the facts and circumstances of the case as noticed above, I am of the view that there is no infirmity in the order of the trial court

in exercising discretion in favour of the respondent and condoning the delay of 45 days in filing the complaint.

In view of the above, I find no merit in the petition, the petition is accordingly dismissed. There shall be no orders as to costs.

List the matter before the Trial Court on 29.11.2018. Since over a decade has been spent in these proceedings at the stage of condonation of delay

alone, the trial court is directed to expedite the proceedings and conclude the same, preferably within a period of four months from today.

Order Dasti under signatures of Court Master.