Delhi High Court – Orders
Binod Kumar Bawri & Ors vs M/S Dalmia Cement (Bharat) Ltd & Anr on 8 January, 2025
Author: Manoj Kumar Ohri
Bench: Manoj Kumar Ohri
$~5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB. A. (COMM.) 56/2024, I.A. 44932/2024 & I.A. 44933/2024
BINOD KUMAR BAWRI & ORS. .....Petitioners
Through: Mr. Sacchin Puri (Sr. Adv.) along
with Mr. Praveen Kumar, Mr.
Vinayak Bhandari, Mr. Sarthak
Gupta, Ms. Teesta Mishra, Ms. Ashna
Bhola, Mr. Dhan Singh, Mr. Suman
Raj, Mr. Nishal Kaushal, Advocates.
versus
M/S DALMIA CEMENT (BHARAT) LTD & ANR......Respondents
Through: Mr. Rajiv Nayar, Sr. Adv. with Ms.
Niyati Kohli and Mr. Pratham Vir
Agarwal, Advs. for R-1.
Mr. Jatin Sehgal, Mr. Raymon Singh,
Ms. Devna Soni, Ms. Shipra Chaudhary
and Mr. Aditya Varun Bhat, Advs. for R-
2.
CORAM:
HON'BLE MR. JUSTICE MANOJ KUMAR OHRI
ORDER
% 08.01.2025
I.A. 44933/2024 (delay)
1. By way of the present application filed under Section 5 of the
Limitation Act, the appellants seek condonation of delay of 13 days in filing
the accompanying appeal filed under Section 37 (2)(B) of the Arbitration
and Conciliation Act, 1996.
2. Notably, the subject appeal arises out of arbitral proceedings pending
before the Arbitral Tribunal (hereafter, the ‘AT’) in relation to the disputes
pertaining to Shareholders Agreement dated 16.1.2022 (as amended on
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30.11.2022).
Vide the impugned order dated 19.07.2024, AT while allowing an
application filed under Section 17 of the A&C Act by respondent No.1, has
directed the petitioners to deposit 5,20,34,013 shares as well as 10,95,000
shares, both in the Escrow-2 account.
3. As the respondent has raised a preliminary objection on the
maintainability on account of limitation, the subject appeal having been filed
with a delay of 13 days, the Court sets out to deal with the same.
4. While the appellant would contend that justifiable reasons exist for it
to satisfactorily explain the delay, the respondent has doubted the reasons
and also the period of delay which according to them is 49 days.
5. As per petitioners’ case, the impugned order passed on 19.07.2024
was received through email from AT on 20.07.2024 and the subject appeal
was filed on 01.10.2024, thus a delay of 13 days. The delay is sought to be
explained by citing two reasons, the first being ‘change of counsel’ and
second non-availability of petitioner No.1, who is stated to be the GPA
holder of petitioner Nos. 2-13. It is stated that petitioner No.1 was not
available in India as he had travelled to USA from 13.08.2024 to
18.09.2024. After return of the petitioner No.1, the counsel could take
appropriate instructions for filing of the subject appeal. Lastly, it is
submitted that the delay was bona fide and not intentional in nature.
6. Pertinently, though Section 37 of the A&C Act itself does not
prescribe any time period for filing the appeal, the Supreme Court in
Government of Maharashtra (Water Resources Department) represented by
Executive Engineer v. Borse Brothers Engineers and Contractors Pvt.
Limited reported as (2021) 6 SCC 460 while addressing the same issue,
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observed as under:-
“25. When the Commercial Courts Act is applied to the aforesaid appeals,
given the definition of “specified value” and the provisions contained
in sections 10 and 13 thereof, it is clear that it is only when the specified
value is for a sum less than three lakh rupees that the appellate provision
contained in section 37 of the Arbitration Act will be governed, for the
purposes of limitation, by Articles 116 and 117 of the Limitation Act. Shri
Deshmukh’s argument that depending upon which court decides a matter, a
limitation period of either 30 or 90 days is provided, which leads to
arbitrary results, and that, therefore, the uniform period provided by Article
137 of the Limitation Act should govern appeals as well, is rejected. It is
settled that periods 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. In Boota Mal v. Union of India, (1963) 1 SCR 70,
this Court referred to this aspect of the case, as follows:
“Ordinarily, the words of a statute have to be given their strict grammatical
meaning and equitable considerations are out of place, particularly in
provisions of law limiting the period of limitation for filing suits or legal
proceedings. This was laid down by the Privy Council in two decisions in
Nagendranath v. Suresh [AIR(1932) PC 165] and General Accident Fire
and Life Assurance Corporation Limited v. Janmahomed Abdul Rahim [AIR
(1941) PC 6] . In the first case the Privy Council observed that “the fixation
of periods of limitation must always be to some extent arbitrary and may
frequently result in hardship. But in construing such provisions equitable
considerations are out of place, and the strict grammatical meaning of the
words is the only safe guide”. In the latter case it was observed that “a
limitation Act ought to receive such a construction as the language in its
plain meaning imports … Great hardship may occasionally be caused by
statutes of limitation in cases of poverty, distress and ignorance of rights,
yet the statutory rules must be enforced according to their ordinary meaning
in these and in other like cases”.
Xxx
27. Even in the rare situation in which an appeal under section 37 of the
Arbitration Act would be of a specified value less than three lakh rupees,
resulting in Article 116 or 117 of the Limitation Act applying, the main
object of the Arbitration Act requiring speedy resolution of disputes would
be the most important principle to be applied when applications
under section 5 of the Limitation Act are filed to condone delay beyond 90
days and/or 30 days depending upon whether Article 116(a) or 116(b) or
117 applies. As a matter of fact, given the timelines contained in sections
8, 9(2), 11(4), 11(13), 13(2)-(5), 29A, 29B, 33(3)-(5) and 34(3) of
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the Arbitration Act, and the observations made in some of this Court’s
judgments, the object of speedy resolution of disputes would govern appeals
covered by Articles 116 and 117 of the Limitation Act.
Xxx
33. The bulk of appeals, however, to the appellate court under section 37 of
the Arbitration Act, are governed by section 13 of the Commercial Courts
Act. Sub-section (1A) of section 13 of the Commercial Courts Act provides
the forum for appeals as well as the limitation period to be followed, section
13 of the Commercial Courts Act being a special law as compared with
the Limitation Act which is a general law, which follows from a reading
of section 29(2) of the Limitation Act. Section 13(1A) of the Commercial
Courts Act lays down a period of limitation of 60 days uniformly for all
appeals that are preferred under section 37 of the Arbitration Act”
7. In the aforementioned decision, the Supreme Court further
considered the expression “sufficient cause” in relation to condonation
of delay in context of appeals filed under Section 37, and observed as
under:
“58. Given the object sought to be achieved under both the Arbitration Act
and the Commercial Courts Act, that is, the speedy resolution of disputes,
the expression “sufficient cause” is not elastic enough to cover long delays
beyond the period provided by the appeal provision itself. Besides, the
expression “sufficient cause” is not itself a loose panacea for the ill of
pressing negligent and stale claims. This Court, in Basawaraj v. Land
Acquisition Officer, (2013) 14 SCC 81, has held:
“9. Sufficient cause is the cause for which the defendant could not
be blamed for his absence. The meaning of the word “sufficient” is
“adequate” or “enough”, inasmuch as may be necessary to answer
the purpose intended. Therefore, the word “sufficient” embraces
no more than that which provides a platitude, which when the act
done suffices to accomplish the purpose intended in the facts and
circumstances existing in a case, duly examined from the viewpoint
of a reasonable standard of a cautious man. In this context,
“sufficient cause” means that the party should not have acted in a
negligent manner or there was a want of bona fide on its part in
view of the facts and circumstances of a case or it cannot be
alleged that the party has “not acted diligently” or “remained
inactive”. However, the facts and circumstances of each case must
afford sufficient ground to enable the court concerned to exercise
discretion for the reason that whenever the court exercisesThis is a digitally signed order.
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discretion, it has to be exercised judiciously. The applicant must
satisfy the court that he was prevented by any “sufficient cause”
from prosecuting his case, and unless a satisfactory explanation is
furnished, the court should not allow the application for
condonation of delay. The court has to examine whether the
mistake is bona fide or was merely a device to cover an ulterior
purpose. (See Manindra Land and Building Corpn. Ltd. v.
Bhutnath Banerjee [AIR 1964 SC 1336] , Mata Din v. A.
Narayanan [(1969) 2 SCC 770 : AIR 1970 SC 1953] , Parimal v.
Veena [(2011) 3 SCC 545 : (2011) 2 SCC (Civ) 1 : AIR 2011 SC
1150] and Maniben Devraj Shah v. Municipal Corpn. of Brihan
Mumbai [(2012) 5 SCC 157 : (2012) 3 SCC (Civ) 24 : AIR 2012 SC
1629] .)
10. In Arjun Singh v. Mohindra Kumar [AIR 1964 SC 993] this
Court explained the difference between a “good cause” and a
“sufficient cause” and observed that every “sufficient cause” is a
good cause and vice versa. However, if any difference exists it can
only be that the requirement of good cause is complied with on a
lesser degree of proof than that of “sufficient cause”.
11. The expression “sufficient cause” should be given a liberal
interpretation to ensure that substantial justice is done, but only so
long as negligence, inaction or lack of bona fides cannot be
imputed to the party concerned, whether or not sufficient cause has
been furnished, can be decided on the facts of a particular case and
no straitjacket formula is possible. (Vide Madanlal v. Shyamlal
[(2002) 1 SCC 535 : AIR 2002 SC 100] and Ram Nath Sao
v.Gobardhan Sao [(2002) 3 SCC 195 : AIR 2002 SC 1201] .)
12. It is a settled legal proposition that law of limitation may
harshly affect a particular party but it has to be applied with all its
rigour when the statute so prescribes. The court has no power to
extend the period of limitation on equitable grounds. “A result
flowing from a statutory provision is never an evil. A court has no
power to ignore that provision to relieve what it considers a
distress resulting from its operation.” The statutory provision may
cause hardship or inconvenience to a particular party but the court
has no choice but to enforce it giving full effect to the same. The
legal maxim dura lex sed lex which means “the law is hard but it is
the law”, stands attracted in such a situation. It has consistently
been held that, “inconvenience is not” a decisive factor to be
considered while interpreting a statute.
13. The statute of limitation is founded on public policy, its aim
being to secure peace in the community, to suppress fraud and
perjury, to quicken diligence and to prevent oppression. It seeks to
bury all acts of the past which have not been agitated
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unexplainably and have from lapse of time become stale. According
to Halsbury’s Laws of England, Vol. 28, p. 266:
“605. Policy of the Limitation Acts.–The courts have expressed at
least three differing reasons supporting the existence of statutes of
limitations namely, (1) that long dormant claims have more of
cruelty than justice in them, (2) that a defendant might have lost the
evidence to disprove a stale claim, and (3) that persons with good
causes of actions should pursue them with reasonable diligence.”
An unlimited limitation would lead to a sense of insecurity and
uncertainty, and therefore, limitation prevents disturbance or
deprivation of what may have been acquired in equity and justice
by long enjoyment or what may have been lost by a party’s own
inaction, negligence or laches. (See Popat and Kotecha Property v.
SBI Staff Assn. [(2005) 7 SCC 510] , Rajender Singh v. Santa
Singh [(1973) 2 SCC 705 : AIR 1973 SC 2537] and Pundlik Jalam
Patil v. Jalgaon Medium Project [(2008) 17 SCC 448 :(2009) 5
SCC (Civ) 907] .)
14. In P. Ramachandra Rao v. State of Karnataka [(2002) 4 SCC
578 : 2002 SCC (Cri) 830 : AIR 2002 SC 1856] this Court held
that judicially engrafting principles of limitation amounts to
legislating and would fly in the face of law laid down by the
Constitution Bench in Abdul Rehman Antulay v. R.S. Nayak [(1992)
1 SCC 225 : 1992 SCC (Cri) 93 : AIR 1992 SC 1701] .
15. The law on the issue can be summarised to the effect that
where a case has been presented in the court beyond limitation, the
applicant has to explain the court as to what was the “sufficient
cause” which means an adequate and enough reason which
prevented him to approach the court within limitation. In case a
party is found to be negligent, or for want of bona fide on his part
in the facts and circumstances of the case, or found to have not
acted diligently or remained inactive, there cannot be a justified
ground to condone the delay. No court could be justified in
condoning such an inordinate delay by imposing any condition
whatsoever. The application is to be decided only within the
parameters laid down by this Court in regard to the condonation of
delay. In case there was no sufficient cause to prevent a litigant to
approach the court on time condoning the delay without any
justification, putting any condition whatsoever, amounts to passing
an order in violation of the statutory provisions and it tantamounts
to showing utter disregard to the legislature.” (emphasis supplied)
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8. The Supreme court also cited with approval, amongst others, its
following observations in case of Ramlal v. Rewa Coalfileds reported
as (1962) 2 SCR 762:-
“62. Also, it must be remembered that merely because sufficient cause has
been made out in the facts of a given case, there is no right in the appellant
to have delay condoned. This was felicitously put in Ramlal v. Rewa
Coalfields Ltd., (1962) 2 SCR 762 as follows:
“It is, however, necessary to emphasise that even after sufficient cause
has been shown a party is not entitled to the condonation of delay in
question as a matter of right. The proof of a sufficient cause is a
condition precedent for the exercise of the discretionary jurisdiction
vested in the court by s. 5. If sufficient cause is not proved nothing
further has to be done; the application for condoning delay has to be
dismissed on that ground alone. If sufficient cause is shown then the
Court has to enquire whether in its discretion it should condone the
delay. This aspect of the matter naturally introduces the consideration
of all relevant facts and it is at this stage that diligence of the party or
its bona fides may fall for consideration; but the scope of the enquiry
while exercising the discretionary power after sufficient cause is
shown would naturally be limited only to such facts as the Court may
regard as relevant. It cannot justify an enquiry as to why the party
was sitting idle during all the time available to it. In this connection
we may point out that considerations of bona fides or due diligence
are always material and relevant when the Court is dealing with
applications made under s. 14 of the Limitation Act. In dealing with
such applications the Court is called upon to consider the effect of the
combined provisions of section 5 and 14. Therefore, in our opinion,
considerations which have been expressly made material and relevant
by the provisions of s. 14 cannot to the same extent and in the same
manner be invoked in dealing with applications which fall to be
decided only under s. 5 without reference to s.14.”
9. After a detailed and exhaustive analysis, the Supreme court
while outlining the parameters to condone delay beyond the specified
period of 90 days, 30 days, 60 days, as the case may be only by way
of an exception and not by way of a rule, the relevant observations are
extracted as under:
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“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 filed under Section 37 of the Arbitration Act that are governed by
Articles 116 and 117 of the Limitation Act or Section 13(1-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….”
10. Coming to the facts of the present case, admittedly, bearing in mind
the specified value of the subject matter, the limitation period of 60 days
was available to the petitioners to file the subject appeal. The ‘log
information’ placed on record by the Registry reflects that the subject appeal
came to be filed on 01.10.2024. Computing 60 days from the date of
impugned order, there is delay of 13 days in filing of the subject appeal.
11. As discernible from the above, in a case where a party has acted in
good faith and without negligence, the Supreme Court has held that a brief
delay beyond the prescribed time can be excused at the Court’s discretion.
With regards to as to what constitutes as “sufficient cause” in the context of
condoning delay in filing appeals under Section 37 of the Act, this Court
finds it appropriate to refer to the case of Union of India, through Principal
Chief Materials Manager v. Incom Cables (Pvt) Ltd., reported as (2022)
SCC OnLine DEL 2641. The relevant extract is reproduced as under:-
“7. Thus, “sufficient cause” means adequate and enough reason which
prevented a person from approaching a court within limitation. The party
seeking condonation of delay should not be found to be negligent or for
want of bonafides nor should it have been not diligent nor inactive in
pursuing its case. The Supreme Court also held that the test for condonation
of delay cannot be different for the Government. All parties are treated to be
equal before the law.”
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12. Notably, the delay involved in the present case is of a short period of
13 days. While respondent has claimed that the petitioners have engaged a
new counsel soon after passing of the impugned order, the petitioners have
additionally claimed that petitioner No.1, who is the authorised person on
behalf of petitioner Nos. 2 to 13, was not available in the country for a
considerable period of time i.e., from 13.08.2024 to 18.09.2024, as a result
of which adequate instructions could not be obtained by the counsel to draft
and file the appeal. In addition, due consideration is also given to the time
taken by the newly engaged counsel to go through the complete arbitral
records. The application is duly accompanied by the affidavits filed by the
counsel as well as petitioner No.1. In the present facts and circumstances,
one cannot conclude that the petitioners have acted in a deliberate and
intentional manner or with any mala fide.
Though respondent has placed reliance on the decision of Division
Bench of this Court in Union of India v. Besco Limited (Wagon Divison) in
FAO(OS)(COMM) 22/2024 dated 27.11.2024. A perusal of said decision
would show that the delay involved was of 112 days. The Division Bench
further observed that the explanation tendered was sufficient enough to
condone the delay.
13. In light of the facts and circumstances of the case, as well as the
duration of the delay in filing the appeal, this Court is of the opinion that
there is a valid reason for the delay and that “sufficient cause” has been
demonstrated. Therefore, the delay of 13 days in filing the appeal is hereby
excused under Section 5 of the Limitation Act, and the applicant/appellant is
granted the benefit of this provision.
14. The application is disposed of in the above terms.
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ARB. A. (COMM.) 56/2024 and I.A. 44932/2024 (stay)
List on 11.02.2025.
MANOJ KUMAR OHRI, J
JANUARY 8, 2025
js
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