Court Not Obliged To Consider Merits Of An Appeal Which Is Barred By Limitation & No Plausible Cause For Delay Is Shown: Supreme Court

The Supreme Court observed that a court has no obligation to consider the merits of an appeal which is barred by limitation and no plausible cause for delay is shown.

The bench also observed that the law of limitation binds everybody including the Government and a different yardstick for condonation of delay cannot be laid down because the government is involved.

In this case, the High Court has rejected an arbitration appeal on the ground that delay in filing an appeal filed by the State of Uttar Pradesh under Section 37 of the Arbitration and Conciliation Act is not condonable beyond 120 days. In appeal before the Apex Court, the State contended that a good case on merits involving huge public money ought not to be dismissed on the grounds of delay alone, without even discussing the merits of the entire case.

Rejecting the said contention, the bench observed that the right of appeal is a statutory right, subject to the laws of limitation. It said:

The law of limitation is valid substantive law, which extinguishes the right to sue, and/or the right to appeal. Once an appeal is found to be barred by limitation, there can be no question of any obligation of the Court to consider the merits of the case of the Appellant.. When consideration of an appeal on merits is pitted against the rejection of a meritorious claim on the technical ground of the bar of limitation, the Courts lean towards consideration on merits by adopting a liberal approach towards 'sufficient cause' to condone the delay. The Court considering an application under Section 5 of the Limitation Act may also look into the prima facie merits of an appeal. However, in this case, the Petitioners failed to make out a strong prima facie case for appeal. Furthermore, a liberal approach, may adopted when some plausible cause for delay is shown. Liberal approach does not mean that an appeal should be allowed even if the cause for delay shown is glimsy. The Court should not waive limitation for all practical purposes by condoning inordinate delay caused by a tardy lackadaisical negligent manner of functioning

The law of limitation binds everybody including the Government

The State had further contended that the dismissal of the Appeal of a Government body on delay does not amount to unjust enrichment of the Claimant. In this regard, the bench noted that explanation as given in the affidavit in support of the application for condonation of delay does not make out sufficient cause for condonation of the inordinate delay of 337 days in filing the appeal under Section 37 of the Arbitration and Conciliation Act.

The law of limitation binds everybody including the Government. The usual explanation of red tapism, pushing of files and the rigmarole of procedures cannot be accepted as sufficient cause. The Government Departments are under an obligation to exercise due diligence to ensure that their right to initiate legal proceedings is not extinguished by operation of the law of limitation. A different yardstick for condonation of delay cannot be laid down because the government is involved

Though the bench agreed with the contention that the High Court erred in holding that delay beyond 120 days in filing an appeal under Section 37 of the Arbitration and Conciliation Act was not condonable, it dismissed the Special Leave Petition observing that the petitioners have failed to show sufficient cause for the condonation of the inordinate delay.

Case details

State of Uttar Pradesh vs Satish Chand Shivhare and Brothers | 2022 LiveLaw (SC) 430 | SLP(C) 5301 OF 2022 | 4 April 2022

Coram: Justices Indira Banerjee and AS Bopanna

Counsel: Sr. Adv Rana Mukherjee for petitioner, Adv Sumant Bharadwaj for respondent

Headnotes

Arbitration and Conciliation Act, 1996; Section 37 - Limitation Act, 1963 ; Section 3,5 - The right of appeal is a statutory right, subject to the laws of limitation. The law of limitation is valid substantive law, which extinguishes the right to sue, and/or the right to appeal. Once an appeal is found to be barred by limitation, there can be no question of any obligation of the Court to consider the merits of the case of the Appellant.

Arbitration and Conciliation Act, 1996; Section 37 - Limitation Act, 1963 ; Section 3,5 - The law of limitation binds everybody including the Government. The usual explanation of red tapism, pushing of files and the rigmarole of procedures cannot be accepted as sufficient cause - A different yardstick for condonation of delay cannot be laid down because the government is involved. (Para 17)

Limitation Act, 1963 ; Section 3,5 - The Court considering an application under Section 5 of the Limitation Act may also look into the prima facie merits of an appeal - A liberal approach, may adopted when some plausible cause for delay is shown - When consideration of an appeal on merits is pitted against the rejection of a meritorious claim on the technical ground of the bar of limitation, the Courts lean towards consideration on merits by adopting a liberal approach towards 'sufficient cause' to condone the delay - Liberal approach does not mean that an appeal should be allowed even if the cause for delay shown is glimsy - The Court should not waive limitation for all practical purposes by condoning inordinate delay caused by a tardy lackadaisical negligent manner of functioning. (Para 22)

Arbitration and Conciliation Act, 1996; Section 37 - The ground that delay in filing an appeal under Section 37 of the Arbitration and Conciliation Act is not condonable beyond 120 days is misconceived. [Referred to Government of Maharashtra (Water Resources Department) Represented by Executive Engineer v. Borse Brothers Engineers and Contractors Private Ltd. (2021) 6 SCC 460] (Para 23)

Arbitration and Conciliation Act, 1996; Section 34 - The Court does not sit in appeal over the award of an Arbitral Tribunal. Nor does the Court re-assess or re-appreciate evidence under Section 34 of the Arbitration and Conciliation Act. The scope of interference with an award is limited. An award can only be challenged on grounds mentioned in Section 34(2) of the Arbitration and Conciliation Act - If any provision of a contract is capable of two interpretations, and the interpretation made by the Arbitrator is a possible interpretation, if not a plausible one, it cannot be said that the Arbitrator had acted outside his jurisdiction or that the view taken by him was against the terms of the contract. Similarly, evidence analysed by the Arbitral Tribunal cannot be re-analysed by the Court. (Para 11-12)

Click Here To Read/Download Order