REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal No.2075 of 2010 (Arising out of S.L.P. (C) No.10965 of 2009)

Oriental Aroma Chemical Industries Ltd. …Appellant  

Versus

Gujarat Industrial Development Corporation …Respondents and another

J  U  D  G  M  E  N  T  

G.S. Singhvi, J.

1. Leave granted.

2. Whether the Division Bench of Gujarat High Court was justified in  

condoning  more  than  four  years’  delay  in  filing  of  appeal  by  the  

respondents against  judgment and decree dated 30.10.2004 passed by  

Civil Judge (Sr. Division) Gandhinagar (hereinafter referred to as “the trial  

Court”) in Special Civil Suit No.32 of 2001 is the question which arises for  

consideration in this appeal.

3. The appellant was allotted a piece of land for setting up an industrial  

unit  at  Ankleshwar  subject  to  the  terms  and  conditions  embodied  in  

agreement of licence dated 2.4.1976 which, among other things, provided  

for  consumption  of  specified  quantity  of  water  by  the  appellant.  The  

agreement also provided for payment of 70% of the cost of agreed quantity  

of water irrespective of consumption. In 1982, respondent No.1 demanded  

non utilization charges amounting to Rs.4068/-, which were deposited by  

the appellant.  After some time, respondent No.1 demanded Rs.2,69,895/-  

towards water charges.  For next 10 years, the parties entered into long  

correspondence  on  the  issue  of  levy  of  water  charges,  etc.   Finally,  

respondent No.1 issued bill dated 13.1.1996 requiring the appellant to pay  

Rs.22,96,207/-  towards  water  charges.   The  appellant  challenged  the  

same in Special Civil Suit No.32 of 2001.  The summons issued by the trial  

Court  were  duly served upon the respondents but no written statement  

was filed on their behalf to controvert the averments contained in the plaint  

and none appeared on the dates of hearing despite the fact that the case  

was adjourned on more than one occasion.  The suit was finally decreed  

on 30.10.2004 and it was declared that the appellant is not liable to pay  

Rs.22,96,207/-  by  way  of  minimum  charges  for  water  for  the  period  

between 1978 and 16.4.2001 and, thereafter, till the water was supplied by  

respondent No.1.  After few months, the appellant filed another suit which  

was registered as Civil Suit No.222 of 2005 and prayed that respondent  

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No.1  be  directed  to  issue  no  objection  certificate  in  its  favour.   The  

summons of the second suit were also served upon the respondents, but  

neither  the  written  statement  was  filed  nor  any  one  appeared  on  their  

behalf. The second suit was also decreed on 12.12.2007 and respondent  

No.1 was  directed to issue no objection certificate to the appellant.   In  

compliance  of  the  decree  passed  in  the  second  suit,  the  concerned  

authority of the Corporation issued no dues certificate dated 9.7.2008.   

4. After four months and fifteen days of taking action in furtherance of  

the decree passed in the second suit,  the respondents  filed an appeal  

against  judgment  and decree dated 30.10.2004 passed in Special  Civil  

Suit No.32 of 2001.  They also filed an application under Order 41 Rule 3A  

of the Code of Civil Procedure read with Section 5 of the Limitation Act for  

condonation of delay by making the following assertions:

“1. That this appeal is preferred against the judgment and  decree of the learned Civil Judge (SD), Gandhinagar passed  on  30.10.2004.   That  the  suit  was  filed  for  permanent  injunction  and  declaration  and  on  the  ground  that  the  advocate of the GIDC has appeared but no written statement  was filed and, therefore, the learned Judge resorted to Order 8  Rule  11  of  the  Civil  Procedure  Code  and  granted  the  declaration as prayed for in the plaint.  That after the decree  being passed, the present plaintiff filed another suit being Civil  Suit No.222 of 2005 and in which the decree was passed on  12.12.2007.  That particular decree is to be challenged before  this  Honourable  Court  and,  therefore,  in  2008,  after  the  second decree was passed, it was brought to the notice of the  Legal  Department  as  well  as  to  the  Executive  Engineer  at  GIDC, Ankleshwar as to how this has happened and it seems  that  because  of  numerous  transfers  as  well  as  it  is  also  

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possible that the party might have arranged or joined hands  with  some  employee  of  the  Corporation  and  thereby  after  engaging advocate, no body has gone to the advocate for the  purpose of giving instruction or filing the written statement and  as a result thereof, decree is passed and only in the month of  January/February,  the  law  department  came  to  know  and  therefore, an inquiry was made into the matter but the GIDC  could  not  trace  out  as  to  at  whose  hands  the  mistake  or  mischief  was  done,  however,  when  after  inquiry  everything  was noticed and, therefore, the application for certified copy  was made on 17.11.2008 and on 18.11.2008, the copy was  ready and the same was sent to the advocate and thereafter  the present appeal is preferred.

2. That  a  long  span  from  30.10.2004  to  18.11.2008,  practically four years time is passed and this has happened  only because of some mistake or mischief on the part of the  staff  and,  therefore,  the  appeal  could  not  be  preferred,  otherwise it is a matter of substantial right of the GIDC where  the water charges are leveled in spite of water being used or  not  and when  the  bills  were  already  drawn,  there  was  not  intention on the part of the GIDC not to contest the suit.  But it  is difficult to trace out how this has happened and, therefore,  when  the  inquiry  was  conducted  in  detail,  the  facts  were  brought to the notice and on that basis the cause has arisen to  file this appeal and the delay of 1067 days cause in filing the  appeal is required to be condoned in the interest of justice.”

On notice, a detailed reply was filed on behalf of the appellant in the form  

of an affidavit of its Director, Shri Sanjay Kantilal Shah, paragraphs 4.16, 5  

and 6 whereof read as under:   

“4.16. That the First Appeal preferred by the appellant  has been preferred with Civil  Application No.14201 of 2008  and the said application for condonation of delay under Order  41 Rule (3A) read with Section 5 of the Limitation Act.  As a  matter  of  fact,  the  petitioner  company being  a  Government  Corporation is bound to follow the rules and regulations as it is  and cannot  deviate  itself  from the provisions of  law.   As a  matter of fact in filing the present First Appeal there is a delay  of  more  than  4  years.   Moreover,  in  the  second  suit,  the  

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decree and judgment is  already passed and thereafter  now  the petitioner has no right to challenge the order of the Civil  Suit  No.32/2001.   But  for  the  reasons  best  known  to  the  appellant the correct number of days has not been mentioned  in the condonation of delay application.  As a matter of fact,  the petitioner being a Government Corporation has to follow  the rules and regulations strictly and is required to give proper  explanation  as  to  why  the  Appeal  has  not  been  preferred  within the time frame and if they were so, being aggrieved by  the order passed by the Ld. Civil Judge (SD) Gandhinagar.  If  the condonation of delay is taken into consideration the said  page is only a 4 pages wherein no proper explanation as to  what the petitioner was doing for the past year has been given  in the said and thereby also the said application is required to  be dismissed in limine.

5. With regard to para -1 of the Civil  Application, I  most  humbly and respectfully submit that it is true that the decree  passed  by  the  Ld.  Civil  Judge  (S.D)  Gandhinagar  on  13.10.2004.  It is also true that in the said Suit, the advocate  for the GIDC had appeared but had not filed written statement  and therefore, the Ld. Judge has passed the order under the  provisions  of  the  Code  of  Civil  Procedure  and  granted  declaration as prayed for in the plaint.  It is also true that after  decree was passed, the present respondent filed another suit  being Civil Suit No.222/2005 and the said decree was passed  on 12.12.2007.  It is not true that in the year 2008 after the  second decree was passed it was brought to the knowledge of  the Legal Department that the earlier decree was required to  be challenged.  Lack of legal knowledge cannot be said to be  ground  to  condone  the  delay.   If  the  facts  had  not  been  brought well in time then for the said it cannot be said that the  respondent company is required to be punished.  As a matter  of fact nothing has been mentioned on Affidavit as to who did  not give proper instructions or as to who had possibly played  the  mischief  and  as  to  who  had  joined  the  hand  with  the  respondent  company.   It  is  only  the  blame game which  is  being  played  and  allegations  are  being  leveled  in  order  to  save  its  own  skin  but  there  is  no  truth  behind  the  facts  mentioned therein and thereby there is no way as to how the  present  application  can  ever  be  allowed.   Moreover  the  respondent is not knowing any persons of the G.I.D.C. (as on  today or at any time).

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6. With regard  to  para-2  of  the  Civil  Application,  I  most  humbly  and  respectfully  say  and  submit  that  it  is  true  that  more than 4 years time has been passed from the date of the  decree but as to who has played the mischief or mistake or  had it been intentionally filed within the time frame that is for  the reasons best known to the appellant corporation and that  is something on which the petitioner company would not like to  comment  at  this  juncture.   No  proper  justification  or  explanation  has  been  brought  on  record  as  to  what  was  happening for the past 4 years, has also not given anything in  detail and neither true and correct facts have been mentioned  nor the calculation in respect of  the days have been made  properly and thereby also on all the said counts, the present  application is required to be dismissed with exemplary cost.”

5. The Division Bench of the High Court referred to the judgments of  

this Court in  State of Bihar and others v.  Kamleshwar Prasad Singh  

and another, 2000 AIR SC 2388, N. Balakrishnan v. M. Krishnamurthy,  

JT 1998 (6) SC 242, State of Haryana v. Chandra Mani and others AIR  

1996  SC  1623, Spl.  Tehsildars,  Land  Acquisition,  Kerala  v.  K.V.  

Ayisumma  AIR 1996 SC 2750, Punjab  Small  Industries  and Export  

Corporation Ltd. and others v. Union of India and others 1995 Suppl.  

(4) SCC 681, P.K. Ramachandran v. State of Kerala and another (1997)  

7 SCC 566 and Collector, Land Acquisition, Anantnag v.  Mst. Katiji  

AIR  1987  SC  1353 and  condoned  the  delay  by  making  a  cryptic  

observation that  the cause shown by the respondents is sufficient.  The  

relevant portion of the High Court’s order is reproduced below:

“Applying the principles laid down by the Supreme Court to the  facts of the present case, we are satisfied that sufficient cause  

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is made out by the applicant for condonation of delay.  Over  and above, in view of the fact that reasons mentioned in this  application have not been controverted by the other side and  also  in  view  of  the  principles  governing  the  discretionary  exercise of power under Section 5 of the Limitation Act, 1963,  we are of the view that sufficient cause has been stated for not  filing  the  appeal  in  time  and  hence,  delay  caused  in  filing  appeal is to be condoned and the application is required to be  allowed.”

(Emphasis supplied)

6. Shri  L.N. Rao, learned senior counsel appearing for the appellant  

argued that the impugned order is liable to be set aside because the High  

Court  allowed  the  application  for  condonation  of  delay  by  erroneously  

assuming that the delay was of 1067 days only.  Learned senior counsel  

pointed out  that  appeal against  judgment and decree dated 30.10.2004  

was filed on 24.11.2008 i.e., after more than four years, but by scoring out  

the  figures  and words  “4  years  and 28”  in  paragraphs  2  and 3 of  the  

application and substituting the same with figure “1067”, the respondents  

misled the High Court in believing that delay was of 1067 days.  He then  

referred to affidavit dated 16.2.2009 of Shri Sanjay Kantilal Shah  to show  

that substantial grounds had been put forward on behalf of the appellant  

for opposing the respondents’ prayer for condonation of delay of more than  

four  years  and  submitted  that  the  Division  Bench  of  the  High  Court  

committed serious error in condoning the delay by assuming that no reply  

had been filed by the appellant.  Learned senior counsel also invited the  

Court’s attention to affidavits dated 25.11.2009 and 4.2.2010 of Shri Pravin  

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Keshav Lal Modi and Shri  Harishbhai Patel respectively filed in this Court  

on behalf of the respondents as also the list of events attached with the  

second affidavit to show that the functionaries of respondent No.1 were  

very much aware of the proceedings of Special Civil Suit No.32 of 2001  

and Civil Suit No.222 of 2005 and submitted that the High Court should not  

have accepted patently incorrect assertions contained in the application for  

condonation of delay,  which was supported by an affidavit of none else  

than the General Manager of respondent No.1, Shri R.B. Jadeja, that the  

Law Department came to know about the judgment of Special Civil Suit  

No.32/2001 only in January/February, 2008.

7. Shri  Anip  Sachthey,  learned  counsel  for  the  respondents  fairly  

admitted that the appeal was filed after lapse of more than four years of  

judgment  dated  30.10.2004  but  submitted  that  this  Court  should  not  

interfere with the discretion exercised by the High Court to condone the  

delay and the respondents should not be penalized simply because the  

advocates  appointed  by  the  Corporation  did  not  bother  to  file  written  

statement  and  appear  before  the  trial  Court  on  the  dates  of  hearing.  

Learned  counsel  emphasized  that  this  Court  has  repeatedly  taken  

cognizance  of  the  lethargy  and  callousness  with  which  litigation  is  

conducted  on  behalf  of  the  State  and  its  agencies/instrumentalities  at  

various levels and condoned the delay so as to enable them to contest the  

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matters on merit and submitted that similar approach may be adopted in  

the  present  case and the appellant  may be compensated  by  award  of  

adequate cost.   

8. We  have  considered  the  respective  submissions.   The  law  of  

limitation is founded on public policy.  The legislature does not prescribe  

limitation with the object of destroying the rights of the parties but to ensure  

that they do not resort to dilatory tactics and seek remedy without delay.  

The idea is that every legal remedy must be kept alive for a period fixed by  

the legislature.  To put it differently, the law of limitation prescribes a period  

within which legal remedy can be availed for redress of the legal injury.  At  

the same time, the courts are bestowed with the power to condone the  

delay, if sufficient cause is shown for not availing the remedy within the  

stipulated time.  The expression “sufficient cause” employed in Section 5 of  

the Indian Limitation Act, 1963 and similar other statutes is elastic enough  

to enable the courts to apply the law in a meaningful manner which sub  

serves the ends of justice.  Although, no hard and fast rule can be laid  

down in dealing with the applications for condonation of delay, this Court  

has justifiably advocated adoption of a liberal approach in condoning the  

delay  of  short  duration  and  a  stricter  approach  where  the  delay  is  

inordinate - Collector, Land Acquisition, Anantnag v. Mst. Katiji (1987)  

2 SCC 107, N. Balakrishnan v. M. Krishnamurthy (1998) 7 SCC 123 and  

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Vedabai v. Shantaram Baburao Patil (2001) 9 SCC 106.  In dealing with  

the applications for condonation of delay filed on behalf of the State and its  

agencies/instrumentalities  this  Court  has,  while  emphasizing  that  same  

yardstick should be applied for deciding the applications for condonation of  

delay  filed  by  private  individuals  and  the  State,  observed  that  certain  

amount of latitude is not impermissible in the latter case because the State  

represents collective cause of the community and the decisions are taken  

by  the  officers/agencies  at  a  slow  pace  and  encumbered  process  of  

pushing the files from table to table consumes  considerable time causing  

delay – G. Ramegowda v. Spl. Land Acquisition Officer (1988) 2 SCC  

142,  State of Haryana v. Chandra Mani (1996) 3 SCC 132, State of U.P.  

v. Harish Chandra (1996) 9 SCC 309, State of Bihar v. Ratan Lal Sahu  

(1996) 10 SCC 635, State of Nagaland v. Lipok Ao (2005) 3 SCC 752,  

and State (NCT of Delhi) v. Ahmed Jaan (2008) 14 SCC 582.  

9. In the light of the above, it is to be seen whether the respondents  

had offered any plausible/tangible explanation for the long delay of more  

than  four  years  in  filing  of  appeal  and  the  High  Court  was  justified  in  

condoning the delay.

10. A reading of the impugned order makes it clear that the High Court  

did make a bald reference to the application for condonation of delay filed  

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by  the  respondents  but  allowed  the  same  without  adverting  to  the  

averments contained therein and the reply filed on behalf of the appellant.  

Not only this, the High Court erroneously assumed that the delay was of  

1067 days, though, as a matter of fact, the appeal was filed after more  

than four years.  Another erroneous assumption made by the High Court  

was  that  the  appellant  had  not  filed  reply  to  controvert  the  averments  

contained in the application for condonation of delay.  It may have been  

possible  for  this  Court  to  ignore  the  first  error  in  the  impugned  order  

because by deleting the figures and words “4 years and 28” in paragraphs  

2 and 3 of the application and substituting the same with the figure 1067,  

the respondents misled the High Court in believing that the delay was of  

1067 days only but it is not possible to fathom any reason why the Division  

Bench of the High Court omitted to consider the detailed reply which had  

been filed on behalf of the appellant to contest the prayer for condonation  

of delay.  Notwithstanding this, we may have set aside the impugned order  

and remitted the case to the High Court for fresh disposal of the application  

filed by the respondents under Section 5 of the Limitation Act but, do not  

consider  it  proper  to  adopt  that  course,  because  as  will  be  seen  

hereinafter, the respondents did not approach the High Court with clean  

hands.

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11. The statement containing the list of events annexed with the affidavit  

of  Shri  Harishbhai Patel  shows that before filing suit,  the appellant had  

issued notice dated 5.2.2001 to which respondent No.1 sent reply dated  

13.3.2001.  The summons of Special Civil Suit No. 32/2001 instituted by  

the appellant were served upon the respondents sometime in the month of  

April/May 2001.   On 16.5.2001,  General  Manager (Law)  instructed Ms.  

Rekhaben M. Patel to appear on behalf  of  the respondents.   Executive  

Engineer,  Ankleshwar  was  also  directed  to  contact  the  advocate  for  

preparing the reply affidavit.  On 23.5.2001, Deputy Executive Engineer,  

Ankleshwar  forwarded  the  comments  to  Ms.  Rekhaben  M.  Patel.   On  

18.4.2002,  the  appellant  filed  an  application  for  ex  parte  proceedings  

against  the  respondents.   On  30.11.2002,  the  trial  Court  directed  the  

respondents to appear on 12.12.2002 with indication that if they fail to do  

so, ex parte proceedings will be held.  Thereupon, General Manager (Law)  

wrote letter dated 10.12.2002 to Ms. Rekhaben to remain present on the  

next date of hearing i.e., 12.12.2002.  On 30th December, 2002, Deputy  

Executive Engineer,  Ankleshwar  wrote  to the advocate in  the matter  of  

submission of para-wise comments.  On 2.1.2003, the Executive Engineer  

is said to have sent a letter to the advocate informing her about the next  

date of  hearing i.e.,  10.1.2003 and asked her to remain present.   After  

almost one year and ten months, the trial Court pronounced the ex parte  

judgment and decreed the suit.   The summons of the second suit  were  

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received  sometime  in  May,  2005.   On  20.6.2005,  Shri  B.R.  Sharma,  

Advocate  was  instructed  to  appear  on  behalf  of  the  respondents.   On  

10.1.2006,  Deputy  Executive  Engineer,  Ankleshwar  informed  the  new  

advocate  about  the  next  date  of  hearing  which  was  23.1.2006.   The  

second suit was decreed on 12.12.2007.   

12. During the course of hearing, learned counsel for the respondents  

fairly conceded that in the second suit filed by the appellant there was a  

specific mention of decree dated 30.10.2004 passed in Special Civil Suit  

No. 32/2001.  He also conceded that even though the first suit remained  

pending before the trial  Court  for  three years  and five months and the  

second suit remained pending for more than two years, none of the officers  

of the Law Department or the Engineering Department of respondent No.1  

appeared before the Court.

13. From what we have noted above, it is clear that the Law Department  

of respondent No.1 was very much aware of the proceedings of the first as  

well  as the second suit.   In the first case, Ms. Rekhaben M. Patel was  

appointed as an advocate and in the second case Shri B.R. Sharma was  

instructed to appear on behalf of the respondents, but none of the officers  

is  shown to  have  personally  contacted  either  of  the  advocates  for  the  

purpose of filing written statement and preparation of the case and none  

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bothered to appear before the trial Court on any of the dates of hearing.  It  

is a matter of surprise that even though an officer of the rank of General  

Manager  (Law)  had  issued  instructions  to  Ms.  Rekhaben  M.  Patel  to  

appear and file vakalat as early as in May 2001 and Manager (Law) had  

given vakalat to Shri B.R. Sharma, Advocate in the month of May 2005, in  

the application filed for condonation of delay, the respondents boldly stated  

that the Law Department came to know about the ex parte decree only in  

the month of January/February 2008.  The respondents went to the extent  

of  suggesting that  the parties may have arranged or  joined hands with  

some employee of the corporation and that may be the reason why after  

engaging  advocates,  nobody  contacted  them for  the  purpose  of  giving  

instructions for filing written statement and giving appropriate instructions  

which resulted in passing of the ex parte decrees.  In our view, the above  

statement contained in para 1 of the application is not only incorrect but is  

ex  facie  false and the High Court  committed grave error  by condoning  

more  than  four  years’  delay  in  filing  of  appeal  ignoring  the  judicially  

accepted  parameters  for  exercise  of  discretion  under  Section  5  of  the  

Limitation Act.

14. In the result, the appeal is allowed.  The impugned order of the High  

Court is set aside and the application for condonation of delay filed by the  

respondents  is  dismissed.   As  a  corollary,  the  appeal  filed  by  the  

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respondents against judgment and decree dated 30.10.2004 shall  stand  

dismissed as barred by time.  However, it is made clear that the disposal of  

this appeal shall not absolve the higher functionaries of respondent No.1  

from the responsibility of conducting a thorough probe into the matter so  

that accountability of the defaulting officers/officials may be fixed and the  

loss,  if  any,  suffered  by  respondent  No.1  recovered  from  them  after  

complying with the rules of natural justice.

…………..……………………J. [G.S. Singhvi]

………………………………..J. [Asok Kumar Ganguly]

New Delhi, Dated: February 26, 2010.

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