Appeal under CommerciAl Courts Act- If delay
condonable
Section 13(1-A) of the Commercial Courts
Act, 2015
The
provisions of The Commercial Courts Act 2015 ( In short CCA) as amended and up
to date are known for its rigour and strict compliance and no deviation from
the strict stipulation is contemplated and courts of law has always been veering
round to ensure the strict compliance of the legal prescription as codified in
the CCA. In the present discussion, however, the delay if caused in appeal to
be filed before the appellate authorities after judgment and decree passed by
the District Judge ( Commercial Courts) is being deliberated. The appeal before
the Commercial Appellate Division of the High Court shall only relate to
appeals under Section 13 of CCA to the judgment and decree as afore stated as
also against such other Order or orders where the appeal is provided for under
Order XLIII of the Code of Civil Procedure. The limitation period for filing
the appeal before the High Court is Sixty (60) days, however, whether any
condonation in delayed filing of the appeal is condonable or not and if in
exceptional cases, the condonation of delay could be made out or not is also deliberated
herein and if so, what are such circumstances when the delay could be condoned
and what are the limits or fetters attached thereto, if any shall be
deliberated herein based on settled judicial precedents.
The
Supreme Court in a matter captioned as Jharkhand Urja Utpadan Nigam Ltd &
Anr VERSUS M/S Bharat Heavy Electricals Limited Special Leave to Appeal
(C) No.9580/2025 has comprehensively dealt with the aspect while taking note of
the judicial precedents and reliance placed on behalf of the petitioner/appellant.
The
backdrop of the case for ready reference and relevant in the context is that
the SLP preferred against the judgment and order passed by the High court of
Jharkhand at Ranchi dated 14.02.2025 in Commercial Appeal No. 1 of 2025 by
which the High Court had rejected the Interim Application No. 11269 of 2024
filed by the petitioner herein under Section 5 of the Limitation Act, 1963,
thus, declining to condone the delay of 301 days in filing the main appeal
under Section 13(1-A) of the Commercial Courts Act, 2015 for short, the “Act,
2015”.
FACTUAL BACKGROUND
That
M/s. Bharat Heavy Electricals Limited, a Central Government Company, instituted
a civil suit against the petitioners herein for recovery of Rs. 26,59,34,854/-
with interest at the rate of 15.75 per cent per annum calculated quarterly till
realization from 12.11.2014 on the basis of the award passed by the MSME
Council Kanpur.
In
filing the statutory appeal, there was a delay of 301 days and thus, the
petitioners prayed for condonation of delay. The High Court had rejected the
plea on the premise that no sufficient cause was assigned by the petitioners
for the purpose of condonation of delay. Before the Supreme Court, it was
pleaded by the petitioner as under:
(i)
the High Court committed a serious error in dismissing the commercial appeal on
the ground of limitation without considering the true purport of the provisions
of Order XX Rule 1 CPC inserted specially for the commercial courts.
(ii)
The High Court failed to take into consideration an important question of law
that the pronouncement of the judgment in the open court in accordance with the
amended provisions of Order XX Rule 1 CPC cannot be the starting point of
limitation, unless, a free copy of the judgment is provided to the parties in
the manner provided under Order XX Rule 1 CPC.
It
was canvassed that Order XX Rule 1 CPC should be construed as mandatory and not
directory in so far as providing a copy of the order is concerned.
Reliance
placed on the following judgments rendered by the Supreme Court:
(i)
Housing Board, Haryana v. Housing
Board Colony Welfare Association and Others reported in (1995) 5 SCC 672 and
(ii)
Sagufa Ahmed and Others. v. Upper Assam
Polywood Products Private Limited and Others reported in (2021) 2 SCC 317.
THE COMMERCIAL COURTS ACT
The
objective of Commercial Courts, Commercial Division and Commercial Appellate
Division of High Courts Act, 2015 was
speedy resolution of commercial disputes. The “Commercial disputes” have been
defined with an inclusive definition and it covers almost all disputes arising
out of the commercial activities. The Act provides for a Schedule which amends
certain provisions of CPC. These provisions are applicable to Commercial
Disputes of Specified Value. The Act has clarified that the provisions of the
CPC as amended by the Act would have an overriding effect over any rules of the
High Court, or the amendments to the CPC made by a State Government.
Section
16 of the Act, 2015 reads thus:
“16.
Amendments to the Code of Civil Procedure, 1908 in its to commercial disputes.—
(1)
The provisions of the Code of Civil Procedure, 1908 (5 of 1908) shall, in their
application to any suit in respect of a commercial dispute of a Specified
Value, stand amended in the manner as specified in the Schedule.
(2)
The Commercial Division and Commercial Court shall follow the provisions of the
Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, in the trial
of a suit in respect of a commercial dispute of a Specified Value.
(3)
Where any provision of any Rule of the jurisdictional High Court or any
amendment to the Code of Civil Procedure, 1908 (5 of 1908), by the State
Government is in conflict with the provisions of the Code of Civil Procedure,
1908 (5 of 1908), as amended by this Act, the provisions of the Code of Civil
Procedure as amended by this Act shall prevail.”
(iii)
Section 13 of the Act, 2015 provides for appeals. The same reads thus:
“13.
Appeals from decrees of Commercial Courts and Commercial Divisions.—
(1)
Any person aggrieved by the judgment or order of a Commercial Court below the
level of a District Judge may appeal to the Commercial Appellate Court within a
period of sixty days from the date of judgment or order. (1A) Any person
aggrieved by the judgment or order of a Commercial Court at the level of
District Judge exercising original civil jurisdiction or, as the case may be,
Commercial Division of a High Court may appeal to the Commercial Appellate
Division of that High Court within a period of sixty days from the date of the
judgment or order: Provided that an appeal shall lie from such orders passed by
a Commercial Division or a Commercial Court that are specifically enumerated
under Order XLIII of the Code of Civil Procedure, 1908 (5 of 1908) as amended
by this Act and section 37 of the Arbitration and Conciliation Act, 1996 (26 of
1996)
(2)
Notwithstanding anything contained in any other law for the time being in force
or Letters Patent of a High Court, no appeal shall lie from any order or decree
of a Commercial Division or Commercial Court otherwise than in accordance with
the provisions of this Act.”
The
Order XX Rule 1 of the CPC reads as :
“1.
Judgment when pronounced.—
(1)
The Court, after the case has been heard, shall pronounce judgment in an open
Court, either at once, or as soon thereafter as may be practicable and when the
judgment is to be pronounced on some future day, the Court shall fix a day for
that purpose, of which due notice shall be given to the parties or their
pleaders: Provided that where the judgment is not pronounced at once, every
endeavour shall be made by the Court to pronounce the judgment within thirty
days from the date on which the hearing of the case was concluded but, where it
is not practicable so to do on the ground of the exceptional and extraordinary
circumstances of the case, the Court shall fix a future day for the
pronouncement of the judgment, and such day shall not ordinarily be a day
beyond sixty days from the date on which the hearing of the case was concluded,
and due notice of the day so fixed shall be given to the parties or their
pleaders.
The
Commercial Court, Commercial Division, or Commercial Appellate Division, as the
case may be, shall, within ninety days of the conclusion of arguments,
pronounce judgment and copies thereof shall be issued to all the parties to the
dispute through electronic mail or otherwise.
(2)
Where a written judgment is to be pronounced, it shall be sufficient if the
findings of the Court on each issue and the final order passed in the case are
read out and it shall not be necessary for the Court to read out the whole
judgment.
(3)
The judgment may be pronounced by dictation in open Court to a shorthand writer
if the Judge is specially empowered by the High Court in this behalf: Provided
that, where the judgment is pronounced by dictation in open Court, the
transcript of the judgment so pronounced shall, after making such correction
therein as may be necessary, be signed by the judge, bear the date on which it
was pronounced, and form a part of the record.”
The
expression “pronounced judgment and copies thereof shall be issued to all the
parties to the dispute through electronic material or otherwise”. According to
the Supreme Court, the argument canvassed on behalf of the petitioners is that
the aforesaid expression should be construed as mandatory and not directory. In
other words, the argument is that the period of limitation would start only
after the copy of the judgment is provided to the party concerned through any
one of the modes as provided in law.
The
Supreme Court in the context in Jharkhand Urja Utpadan Nigam Ltd (Supra) has observed as under:
10.
We are afraid it is difficult for us to take the view that the provision
referred to above is mandatory. It comes to this that till the Registry does
not provide the copy of the judgment, though not demanded, the period of
limitation would not commence from the date of the pronouncement of the
judgment.
11.
Placing reliance on the decision of Housing Board, Haryana (supra) it has been
contended by the appellants herein that where the rules themselves enjoin a
duty of communicating any order or judgment that has been passed by a court or
forum, then in such cases, the period of limitation prescribed has to be
computed from the date of such communication”.
According
to the Supreme Court, following observation is worthy of reiteration:
“12.
In Housing Board, Haryana (supra), the facts germane for our consideration are
that three appeals were filed before the State consumer commission by the
appellants therein. The State consumer commission dismissed all the three
appeals on the ground that those were barred by limitation. In appeal before
this court, the appellant therein contended that the delay in filing those
appeals was on account of the non-availability of the certified copy of the
decision rendered by the District Forum which was sought to be challenged. The
appellant therein contended that as per Rule 4(10) of the Haryana Consumer
Protection Rules, 1988 all orders of the District Forum are required to be
signed and communicated to the parties free of charge. However, since the order
in question after being pronounced could not be signed due to non-availability
of the President of the District Forum the certified copy of the order could
not be provided in time. In such circumstances, this Court held that the period
of limitation would begin to run only from the date on which the copies of the
order were made available. The relevant observations read as under:
“13.
In the present case as laid before the State Commission the appellant contended
that the order was pronounced by the District Forum in the open court on
22-10-1992, it was not signed and dated as the President had proceeded on leave
soon thereafter and therefore, neither the reasons on which the said order was
based were known nor a copy thereof was furnished to the appellant-Board so as
to know the reasons and contents of the order. It was also the case of the
appellant that on an enquiry by the counsel for the appellant-Board he was
informed by the stenographer of the President that the order would be dictated
and typed after the return of the President and that the copy would be made
available to the parties only on 30-10-1992 under the signature of the
President and the copy was in fact made available to the counsel for the
appellant only on 3-11 1992. It may be pointed out that Shri Tirath Singh, learned
counsel appearing for the appellant-Board before the National Commission had
filed his own affidavit affirming these facts which have not been controverted
by the respondents. On the contrary the reply filed in this Court by Shri K.C.
Chug, President, Housing Board Colony Welfare Association, Kurukshetra on
behalf of the respondents has admitted that “in the present case free copies
were ready with the office on 30-10-1992 which were collected by the counsel
for the answering respondent on 30-10-1992 whereas the counsel for the
petitioner got the same on 3-11-1992”.
From
these facts it is abundantly clear that the copies were duly signed and dated
by the members of the forum on 30-10-1992. That being so the period of
limitation in view of the above discussion will commence from the date on which
the copies of the order were ready and made available i.e. 30-10-1992. In the
present case the appeals were filed before the State Commission on 30-11-1992
and since 29-11-1992 was Sunday, the appeals were prima facie within time. In
these facts and circumstances there was no question of making any application
for condonation of delay in filing the appeals as there was no delay at all.”
Although
the Supreme Court has in Housing Board, Haryana (supra) had held
that where the provisions enjoin a duty of communicating any order or judgment
that has been pronounced, the limitation for challenging the same would begin
from the date of such communication, yet the aforesaid observations cannot be construed
devoid of the context in which they were made. A close reading of the decision
would indicate that in the said case, after the pronouncement of the order, the
appellants therein had made active efforts for procuring the said order, and
this is evident from the fact that few days after the pronouncement, the
counsel of the appellants therein had made inquiries as regards the
unavailability of the order in response to which he was informed that the order
was yet to be signed. Thus, when the Supreme Court in Housing Board, Haryana
(supra) held that the limitation for challenging the same would begin from the
date of such communication, the same would be applicable only where despite
best of efforts at the end of the parties in procuring the order the same could
not be obtained and thereby resulting in unavoidable delay in the filing of
appeals. 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.
As
regards the reliance on the decision of Sagufa Ahmed (supra) is
also misplaced. In the said case, the Supreme Court while considering Section 421
sub-section (3) of the Companies Act, 2013 held that the period of limitation
prescribed therein would start running only from the date on which a copy of
the order is made available to the person aggrieved. However, yet again in the
said case, the appellants therein had made some efforts to procure a certified
copy of the order to be assailed during the period of limitation. In the
present case, after the order in question came to be pronounced by the
Commercial Court, Ranchi, the appellants herein during the limitation period
did not bother to even inquire as to why the said order was not available. It
was only eight-months after the pronouncement of the said order and almost
150-days after the expiry of the limitation period, that the realization
suddenly dawned upon the appellants herein to apply for the certified copy.
It
was thus held as under:
17.
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.
It
was accordingly held that 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.
The
relevant findings recorded by the High Court are worthy of consideration in as
much as in para 18 of its judgment, the high court had framed the following
question for its consideration.
“18.
The question for consideration is: “whether the applicants herein can plead
that the period of limitation for filing the appeal to Commercial Appellate
Division of this Court did not commence at all because the certified copy of
the judgment had not been issued to the applicants by the Commercial Courts?”
The
High Court, thereafter, proceeded to answer the aforesaid question as under:
“19.
In order to answer this question, we cannot lose sight of the whole purpose of
enactment of the Commercial Courts Act, 2015 i.e., to provide for speedy
disposal of high value commercial dispute.
20.
No doubt there was a similar provision in Haryana Consumer Protection Rules,
1988 framed under the Consumer Protection Act, 1986 which was considered by the
Supreme Court in the case of Housing Board, Haryana (supra). The said provision
in the Haryana Consumer Protection Rules, 1988 also provided for communication
of the order of the District forum to the parties free of charge in order to
avoid the delay as well as to save the parties from the burden of expenses that
may he incurred for obtaining the certified copy. The Supreme Court held that
the scheme of the Consumer Protection Act was to provide for better protection
of the interest of the consumers as a measure for economical and speedy remedy
for the settlement of the dispute and the matters connected therewith and
therefore, the said rule should be understood in a manner so that it would
protect the interest of the parties before the District forum by making it
obligatory on the District forum to provide a copy of the order duly signed and
dated by the members of the Bench; and the period of limitation prescribed with
regard to filing of an appeal under Section 15 of the said Act therefore, has
to be computed as commencing from the date of communication of the order in the
manner laid down in the rules. It was in that context that it was Held that
mere pronouncement of an order in the open Conn would not be enough, but under
the scheme of the rules copy of the said judgment has to be communicated to the
parties affected by the said order so that the parties adversely affected
therefrom may have a fair and reasonable opportunity of knowing the text,
reasons and contents thereof so as to formulate grounds of attack before the
appellate or before the higher forums. In absence of such communication of
signed and dated order, it was held that the parties adversely affected by it
will have no means of knowing the contents of the order so to challenge the
same and get it set aside by the appellate authority or by the higher forums.
21.
Normally petitioners before the District forums under the Consumer Protection
Act, 1986 are individuals and not corporate entities like the
appellant/instrumentality of the State. So, there is justification for taking
the view as regards petitioners in District forums that the provisions in the
Haryana Consumer Protection Rules, 1988 which mandated communication of the
order of the said forums to the parties free of charge was to save the parties
from the burden of expenses that may be incurred for obtaining the certified
copy.
22.
We are afraid that the logic behind the provision contained in Haryana Consumer
Protection Rules, 1988 framed under the Consumer Protection Act. 1986 cannot be
applied to the litigants before the Commercial Court. For Commercial entities
and in particular litigants like the applicants herein who are the State
Government Undertakings, the expenses of obtaining a certified copy of a
judgment of the Commercial Court would be very small compared to the stakes
involves in the litigation.
23.
Therefore, they cannot be put on the same footing as a petitioner before the
District Consumer forum; and the logic of counting the period of limitation
from the date of communication of the order of consumer forum, cannot be
applied to a Commercial dispute to which Commercial entities are parties. 24.
In our opinion. 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.
25.
This is because the speedy resolution of high value commercial dispute cannot
be lost sight of. Such an interpretation would be in tune with the scheme and
object of the Commercial Couns Act, 2015 and any interpretation of the nature
advanced by the counsel for the applicants would defeat the whole purpose of
the object of the Commercial Courts Act. 2015 to provide for speedy disposal of
high value commercial disputes.
26.
Therefore, we reject the contention of the counsel for the applicants that the
period of limitation for filing the appeal to the Commercial Appellate Division
of the High Court would not commence unless the judgment of the Commercial
Court in the Commercial suit was communicated by the said Commercial Court to
the parties.
As regards the delay of
301 days in filing this Commercial Appeal, whether that can be condoned in
exercise of power conferred on the appellate division under Section 5 of the
Limitation Act, 1963, it was held that the extent of applicability of Section 5
of the Limitation Act, 1963 to cases falling under the Commercial Courts Act,
2015 fell for consideration of the Supreme Court in another case featuring Government
of Maharashtra Vs M/s Borse Brothers
Engineers & Contractors Pvt Ltd Civil Appeal No. 999 of 2021 (arising
out of SLP (Civl) No. 15278 of 2020) and the Supreme Court had held in the said judgment
while discussing the statement of objects and reasons behind enacting of the
Commercial Courts Act, 2015 and held that period of limitation must always to
some extent be arbitrary and may result in some hardship, but this is no reason
as to why they should not be strictly followed. It was further held that the
condonation of delay under Section 5 of the Limitation Act, 1963 has to be seen
in the context of the object of speedy resolution of the dispute. 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. It was therefore categorically held by the
Supreme Court that in exercise of power under Section 5 of the Limitation Act,
1963 a delay beyond the period of 60 days from the date on which the appeal
could have been filed can be condoned (i.e., below 120 days from the date of
pronouncement of the judgment) by invoking Section 5 of the Limitation Act,
1963, but where there is negligence, inaction or lack of bona fides, such power
ought not to be exercised. Merely, because, the Government is involved, a
different yardstick for condonation of delay cannot be laid down. Moreover, because,
sufficient cause has been made out in the facts of a given case, there is no
right in the applicants or the appellants to have the delay condoned. In para
63 it was held as under:
“63.
Given the aforesaid and the object of speedy disposal sought to be achieved
both under the Arbitration Act and the Commercial Courts Act, for appeals pled
under section 37 of the Arbitration Act that are governed by Articles 116 and
117 of the Limitation Act or Section 13(l-A) of the Commercial Courts Act, a
delay beyond 90 days, 30 days or 60 days. respectively, is to be condoned by
way of exception and not by way of rule. In a fit case in which a party has
otherwise acted bona fide and not in a negligent manner, a short delay beyond
such period can, in the discretion of the court, he condoned, always bearing in
mind that the other side of the picture is that the opposite party may have
acquired both in equity and justice, what may now be lost by the first party’s
inaction, negligence or laches.”
Thus,
the Supreme Court in Government of Maharashtra (Supra) case had permitted condonation of delay beyond
60 days in a case falling under the Commercial Courts Act, only by way of
exception and not by way of rule. If the applicants for condonation of delay
had not acted bona fide and had acted in a negligent manner as in the instant
case, the delay is not liable to be condoned. As in the present case, the delay
in filing the appeal is 301 days – way beyond 60 days + 60 days = 120 days
permitted by the judgment of the Supreme Court to be condoned in exercise of
power under Section 5 of the Limitation Act, 1963. Therefore, such inordinate
delay caused by negligence of the applicants is not liable to be condoned.
Yet
another aspect that was noted in the context was that the applicants were
represented before the Commercial Court, Ranchi by counsel and the judgment was
obviously pronounced in the presence of the counsel. Though the order was
pronounced on 09.10.2023 it appears that the application for issuance of
certified copy was made on 30.08.2024, it was made ready on 07.09.2024, and the
appeal was filed on 04.10.2024. If the Commercial Court had not communicated
the copy of its judgment to the applicants within the reasonable time, it was
incumbent on the part of the counsel for the applicants or the employees in the
Legal Department of the applicants to apply for issuance of certified copy from
the Commercial Court, but they have failed in their duty to apply for it when
they did not receive it within a reasonable time. Their negligence resulted in
the inordinate delay of 301 days in filing this appeal. Obviously, in such a
circumstances, 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. Again, no advantage could
be reaped as regards the negligence of the counsel engaged by them in not
informing the applicants about the judgment of the Commercial Court. The
applicant also had a Legal Department and employees engaged by the applicants
in that department had a duty to monitor what is happening in the cases to
which the applicants are parties, keep track of the progress of the said cases
and the decisions therein, and ensure that applications for issuance of
certified copy are made to the concerned court so that the appeals, if
required, can be preferred within the period of limitation prescribed by law.
Therefore,
unambiguous dicta that emerges from the above discussion is that the CCA 2015 contains
provisions that has to be construed strictly and no leverage is required to be
accorded to the delaying party, given the object of the Act. However, as regards
the appeal filed before the appellate division of the High Court u/s 13 (1A) of
the CCA 2015 as amended and up to date, in rare circumstances, the delay can be
condone upto 120 days i.e 60 days beyond the permissible limit of filing of appeal
and that too, when no negligence is attributed for delay and not as a matter of
right. Beyond the said period of 120 days the delay cannot be condoned and
resultantly appeal cannot be entertained.
The
Special Leave Petition was therefore dismissed.
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Anil K Khaware
Founder & Senior Associate
Societylawandjustice.com
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