A Delay In Filing Appeal Under Commercial Court Act Can Be Condoned By Section 5 Of Limitation Act

KEY TAKEAWAYS

• The case in reference is Government of Maharashtra v/s. Borse Brothers and Engineers and Contractors Pvt. Ltd. [CA 995 of 2021]
• The Supreme Court recently held that an application under section 5 of limitation act is not excluded from commercial court act.
• This was a civil appeal arising our of special leave petition where the appeal was allowed and the supreme court found no sufficient cause for condonation of delay and thus condonation was set aside.

BACKGROUND DETAILS

• The judgement was passed by a 3 judge bench of Supreme Court comprising of Justice R.F Nariman, Justice B.R Gavin and Justice Hrishikesh Roy.
• The question for consideration before the court was whether the application of section 5 of limitation act is excluded by the commercial courts act.
• A delay in filing appeal under section 13 of commercial courts act can be waived off if there is sufficient cause as prescribed under section 5 of the limitation act.

FURTHER DETAILS

• While answering the above issue the court noted that under the Commercial Court Act section 13(1)A does not contain any provision similar to section 34(3) of the arbitration act.
• The bench observed that section 13(1)A of the Commercial Court Act only speaks about the limitation period of 60 days from the date of judgement or order for filing an appeal but stays silent on whether delay beyond this period can or cannot be condoned.
• The respondent’s counsel contended that section 5 of limitation act should be excluded and placed reliance on section 21 of Commercial Courts act and also relied on a judgement which dealt with section 35-H (1) of the central excise act.
• However the court rejected both the contentions put forth by the respondent’s counsel.
• The bench also observed that the term ‘sufficient cause’ is not flexible enough to give it a broader interpretation, as it does not cover long delays beyond the period provided by the appeal provision itself.
• The court clarified that a delay either beyond 30 days, 60 days or 90 days is to be condoned by way of exception and not by way of rule for appeals which are filed under section 37 of the Arbitration Act that are governed by article 116 and 117 of the Limitation Act or section 13(1)A of the Commercial Court Act.

CONCLUSION

The court concluded in its judgment that if a party has acted bona fide and not in a negligent manner, a short delay beyond such period can be condoned as it is in the discretion of the court; but bearing in mind that the opposite party may have acquired both in justice and equity what may now be lost by the 1st party's inaction, negligence or laches.