Ramlal, Motilal and Chhotelal vs Rewa Coalfields Ltd

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 276 of 1958

Decision Date: 4 May, 1961

Coram: P.B. Gajendragadkar, K.N. Wanchoo

In the case titled Ramlal, Motilal and Chhotelal versus Rewa Coalfields Ltd, the judgment was delivered on 4 May 1961 by the Supreme Court of India. The opinion was authored by Justice P. B. Gajendragadkar, who sat on a bench together with Justice K. N. Wanchoo. The petitioners were the three brothers Ramlal, Motilal and Chhotelal, and the respondent was Rewa Coalfields Ltd. The citation for the decision appears as 1962 AIR 361 and 1962 SCR (3) 762, with subsequent citator references recorded as R 1968 SC 222 (4), R 1972 SC 749 (29) and R 1988 SC 897 (7). The matter concerned the Indian Limitation Act, 1908 (Act IX of 1908), specifically section 5 relating to the limitation‑condonation of delay in filing an appeal and the period for which such delay must be explained.

The headnote of the judgment explains that the central issue was whether, under section 5 of the Limitation Act, an appellant seeking condonation of a one‑day delay must account for his conduct throughout the entire limitation period or only for the interval between the last day for filing the appeal and the actual filing date. Section 5 provides that an appeal may be admitted after the limitation period if the appellant demonstrates sufficient cause for not preferring the appeal “within such period.” The Court held that it was irrelevant to invoke general considerations such as the appellant’s diligence when construing the words of section 5. The expression “within such period” was interpreted to mean “before the period expires,” not “during the period.” Consequently, the appellant’s failure to explain non‑diligence for the whole limitation period does not preclude a prayer for condonation. To obtain condonation, the appellant must explain the entire delay that occurred between the final day of limitation and the date on which the appeal was actually filed. The Court referred to Krishna v. Chattappan (1890) I.L.R. 13 Mad. 267, approved Karalicharan Sarma v. Apurbakrishna Bajpeyi (1931) I.L.R. 58 Cal. 549, disapproved Kedarnath v. Zumberlal A.I.R. 1916 Nag. 39 and Jahar Mal v. G. M. Pritchard A.I.R. 1919 Pat. 503, found Ram Narain Joshi v. Parmeshwar Narain Mehta (1902) L.R. 30 I.A. 20 inapplicable, and referred to Indar Singh v. Kanshi Ram (1917) L.R. 44 T.A. 218.

The formal judgment record notes that the case arose on civil appeal No. 276 of 1958, an appeal from a judgment and decree dated 6 August 1955 rendered by the Judicial Commissioner’s Court at Rewa in First Civil Appeal No. 16 of 1955. Counsel for the appellants were S. N. Andley, Rameshwar Nath and P. L. Vohra, while D. N. Pathak, R. Mahalingier and B. C. Mishra represented the respondent. The judgment was delivered on 4 May 1961 by Justice Gajendragadkar. The sole question before the Court concerned the construction of section 5 of the Indian Limitation Act, and it arose from the factual backdrop that the respondent, Rewa Coalfields Limited, was a registered company with coal mines located at Burhar and Umaria and whose registered office was situated in Calcutta.

The appellant was the firm Chaurasia Limestone Company, located in Satna, Vindhya Pradesh, and operated by the three brothers Ramlul, Motilal and Chhotelal as partners. The firm manufactured and dealt in limestone at Maihar and Satna and, for the purpose of firing its lime‑kilns, obtained coal from the respondent, Rewa Coalfields Limited, a registered company whose coal‑mines were situated at Burhar and Umaria and whose registered office was in Calcutta. The appellant acquired the coal under permits issued by the Coal Commissioner, Calcutta. According to the respondent’s case, the appellant bought a total of 3,307 tons of coal at the rate of Rs 14‑9‑0 per ton during the period from January 1952 to March 1953, amounting to a price of Rs 48,158‑4‑0. The appellant failed to pay the amount due, and consequently the respondent instituted suit before the District Judge, Umaria, seeking a decree for Rs 52,514‑14‑0, which included interest that had accrued on the unpaid sum up to the date the suit was filed. The appellant contested a substantial portion of the respondent’s claim, arguing in its written statement that the sum had been arbitrarily calculated and that it had already paid for a significant part of the coal purchased. The appellant further asserted that it had ceased purchasing coal from the respondent some time earlier and was now obtaining coal from Messrs Sood Brothers, Calcutta, to whom it had made all required payments. Nevertheless, the appellant admitted a liability of Rs 7,496‑11‑0 and expressed its willingness to pay that amount. The learned trial judge framed seven issues for determination. When the respondent presented its evidence and the appellant’s turn to present evidence arrived, the appellant applied for an adjournment to produce additional evidence. The court granted the adjournment on the condition that the appellant pay Rs 200 as costs to the respondent. On the next scheduled hearing the appellant neither appeared nor paid the ordered costs, prompting the trial court to proceed ex‑parte against the appellant. Relying on the evidence adduced by the respondent, the trial court found in favour of the respondent and passed an ex‑parte decree ordering the appellant to pay Rs 52,535‑7‑0 together with proportionate costs, and also to pay interest at the rate of six per cent per annum from 6 October 1953, the date of the suit, until payment was made. This decree was dated 9 November 1954. The appellant subsequently filed an appeal before the Judicial Commissioner of Vindhya Pradesh, Rewa, on 17 February 1955 (Appeal No. 16 of 1955). The appellant’s principal contention in that appeal was that the ex‑parte decree should be set aside and the matter remanded to the trial court so that the appellant could be permitted to lead its evidence and the case could be decided in accordance with the law after consideration of that evidence.

In this case, the appellant submitted an application on 19 February 1955 under section 5 of the Limitation Act, requesting that the one‑day delay in filing its appeal be condoned. The appellant argued that the delay was caused by the illness of Ramlal, a partner in the appellant’s firm who was responsible for managing the limitation period; Ramlal fell ill on 16 February 1955, which was the final day for filing the appeal. To support this request, the appellant filed an affidavit together with a medical certificate confirming Ramlal’s illness on that date. The learned Judicial Commissioner who considered the application appeared to accept the appellant’s contention that Ramlal’s sickness constituted a satisfactory explanation for the single‑day delay. However, the respondent urged the Commissioner that the appellant had failed to demonstrate that its partners had acted diligently for the substantial portion of the limitation period, noting that the appeal was postponed until the very last day allowed. Consequently, the respondent contended that Ramlal’s illness could not be treated as a sufficient cause for condoning the delay, even though the delay was only one day. The appellant, in turn, maintained that it was entitled to file the appeal on the last permissible day and that the one‑day delay, which required a satisfactory reason, had indeed been explained. The learned Judicial Commissioner, accepting the respondent’s submission, held that the appellant’s partner had exhibited a lack of diligence and negligence throughout the entire limitation period. On that basis, the Commissioner refused to excuse the delay, rejected the condonation application, and dismissed the appeal on 6 August 1955. Subsequently, the appellant approached the Judicial Commissioner for a certificate, arguing that there existed a conflict of judicial opinion on the construction of section 5 of the Limitation Act and that the point decided by the Commissioner was of general importance. The Commissioner agreed with this argument and issued a certificate of fitness under article 133 of the Constitution. Armed with that certificate, the appellant now appears before this Court, raising only one point: that the Judicial Commissioner erred in holding that, to show sufficient cause under section 5, the appellant must explain its conduct for the entire period prescribed for filing the appeal. Section 5 of the Limitation Act provides for an extension of time in certain circumstances and, inter alia, permits an appeal to be admitted after the prescribed limitation period when the appellant satisfies the Court that there was sufficient cause for not preferring the appeal within such period.

The appellant had asserted that he possessed sufficient cause for not filing the appeal within the prescribed period, and the section under consideration raised two issues. The first issue concerned the definition of “sufficient cause,” which the Court noted was not the subject of the present appeal. The second issue concerned the interpretation of the phrase “within such period.” The Judicial Commissioner had decided that the phrase meant “during the period prescribed for making the appeal.” In other words, according to that construction, if an appellant filed an appeal after the limitation period had expired, the appellant must demonstrate that he had acted diligently and that some reason had prevented him from filing within the prescribed time. The Court observed that, had the Judicial Commissioner interpreted “within such period” to mean “the period of delay between the last day for filing the appeal and the date on which the appeal was actually filed,” the Commissioner would inevitably have concluded that the illness of Ramlal on February 16 constituted a sufficient cause. That interpretation appeared to be the effect of the Commissioner’s judgment, and consequently the Court found it unnecessary to examine the question of what constitutes “a sufficient cause” in the present matter. Counsel for the appellant argued that the Commissioner’s construction of the words “within such period” was erroneous. In construing section 5, the Court noted two important considerations. First, the expiry of the limitation period gave the decree‑holder a right to treat the decree as binding between the parties; that is, once the limitation period had lapsed, the decree‑holder obtained a legal benefit that should not be disturbed lightly. Second, when sufficient cause for the delay was shown, the Court possessed a discretionary power to condone the delay and admit the appeal, a discretion intended to further substantial justice. The Court referred to the observation of the Madras High Court in Krishna v. Chattapan, which held that section 5 conferred a discretionary jurisdiction that should be exercised on well‑understood principles, giving a liberal construction to the term “sufficient cause” so as to advance substantial justice where no negligence, inaction, or lack of bona‑fide intent could be attributed to the appellant. The Court then examined the meaning of the expression “within such period.” It acknowledged that the expression might sometimes be understood to mean “during such period,” but questioned whether the context of section 5 justified that interpretation.

In this matter the Court examined whether the expression “within such period” in section five should be understood to refer merely to the duration of the limitation period or, alternatively, to the time ending on the last prescribed day of limitation. The Court noted that when the Limitation Act or any other relevant statute prescribes a specific period for filing an appeal or making an application, the purpose is to give the party intending to act the liberty to do so at any point within that prescribed interval. It would be unreasonable, the Court observed, to require a litigant to take the necessary step on the very first day after the cause of action accrues, because the statute already provides a reasonable span of time for such action. Consequently, it would be ill‑founded to demand that a party explain its conduct throughout the entire limitation period merely because it delayed filing until a later day within that period. The Court held that invoking general considerations of diligence when construing the words of section five is immaterial and irrelevant to the question at hand. The context, according to the Court, indicates that “within such period” must be read as the interval that terminates on the last day prescribed by the limitation statute. In other words, any party seeking condonation of delay must demonstrate why the appeal was not filed on that final day, and may be required to explain the successive day‑by‑day delay that followed. The Court further explained that, in showing sufficient cause for condoning the delay, the appellant might be called upon to account for the entire lapse between the prescribed final day and the actual filing date. The Court declared that interpreting “within such period” to mean “during such period” would be inconsistent with the statutory context. Accordingly, the Court concluded that the learned Judicial Commissioner erred in holding that the appellant’s failure to account for non‑diligence throughout the whole limitation period automatically disqualified it from seeking condonation, especially when the delay consisted of only a single day caused by the appellant’s illness. The Court observed that several High Courts have addressed this issue, producing divergent opinions. In the decision of Karalicharan Sarma v. Apurbakrishna Bajpeyi, the record showed that the appellant handed the appeal papers to his counsel on the morning of the last permissible day, but the counsel, burdened by urgent work, did not examine the documents until that evening, discovering that it was already the final day. The appeal was consequently filed on the following day.

In the case under consideration, the appellant had handed the papers for his appeal to his counsel on the final day prescribed for filing, but the counsel did not examine the documents until the evening of that day. Consequently, the appeal was actually filed on the following day. The Calcutta High Court, by a majority decision, examined whether the appellant could be granted an extension of one day under section five of the Limitation Act. The Court held that it was sufficient for the appellant to demonstrate to the Court that a sufficient cause had prevented him from filing on the last day, and that the appellant was not required to provide an explanation of his conduct throughout the entire limitation period. On this basis, the Court granted the extension and allowed the appeal to proceed. This decision favored the appellant and corresponded with the view that the present Court was prepared to adopt. The judgment thereby recognized that the existence of a sufficient cause, even though the delay was only for a single day, could justify condoning the delay without demanding a detailed account of the appellant’s actions during the whole period prescribed for filing.

In contrast, the Judicial Commissioner at Nagpur, in the case of Kedarnath v. Zumberlal, expressed a contrary opinion. The Commissioner observed that an appellant who deliberately leaves the preparation and presentation of an appeal until the final day of the limitation period is guilty of negligence. The Commissioner held that such an appellant is not entitled to an extension of time, even if an unexpected or unforeseen contingency later prevents timely filing. According to that decision, although the interval between the last prescribed day and the actual filing day might be explained satisfactorily, the explanation would not be sufficient to condone the delay unless the appellant also explained why he waited until the last day. The Commissioner based this conclusion on what he described as general considerations, stating that “this habit of leaving things to the last moment has its origin in laxity and negligence” and emphasizing that, given the increasing pressures of business in the courts and the facilities now available for punctual filing, litigants and their advisers must recognize the dangers of procrastination that pushes filing to the last day of the limitation period. While agreeing that litigants must act with due diligence, the present Court considered that such general considerations have little relevance when construing the specific provisions of section five. The Nagpur authority’s view appeared to rely more on a priori policy considerations than on a textual construction of the statute. The same line of reasoning has been followed in Nagpur subsequently and was also adopted by the Patna High Court in Jahar Mal v. G. M. Pritchard. In that decision, Chief Justice Dawson Miller dismissed the appellant’s request for condonation of delay, emphasizing that parties are not entitled to postpone filing to the last moment and hope that no accident will occur to prevent timely filing, and that the possibility of accidents must always be anticipated.

In this case the Court explained that a party must always reckon with the possibility that some accident or unforeseen event could delay the performance of the act for which a statutory time limit has been prescribed. The Court warned that a litigant who relies on the assumption that everything will proceed flawlessly and therefore waits until the last moment cannot later claim that an unexpected circumstance has caused the delay, because the party had only itself to blame for not having allowed for such eventualities. The Court further observed that the litigant is not entitled to the indulgence of the Court merely because an unexpected difficulty arose, a view that mirrors the comment previously made regarding the Nagpur decision (3). 

The Court emphasized that even if a party is able to demonstrate sufficient cause for the delay, such proof does not create an automatic right to the condonation of that delay. Proof of sufficient cause is a prerequisite, a condition precedent, for the Court to exercise the discretionary jurisdiction granted by section 5. Where sufficient cause is not established, the application for condonation must be dismissed on that ground alone, and no further inquiry is required. If sufficient cause is established, the Court must then consider, within its discretion, whether to grant condonation. At this stage the Court may examine all relevant facts, including the party’s diligence and bona‑fides, but the inquiry is limited to facts that the Court regards as pertinent to the exercise of its discretion. The Court clarified that it is not proper to investigate why the party remained inactive during the period that was available to it. 

The Court noted that considerations of bona‑fides and due diligence are always material when the Court deals with applications filed under section 14 of the Limitation Act, because in such applications the Court must assess the combined effect of sections 5 and 14. However, the Court held that factors expressly made material by the provisions of section 14 cannot be invoked to the same extent in applications that are decided solely under section 5 without reference to section 14. Applying this principle to the present case, the Court found no difficulty in concluding that the discretion should be exercised in favour of the appellant, despite the general criticism of the appellant’s lack of diligence during the limitation period, because no other adverse fact had been produced. The Court further observed that the learned Judicial Commissioner had rejected the appellant’s application for condonation of delay solely on the ground that it was the appellant’s duty to file the appeal as soon as possible within the prescribed period, a conclusion the Court affirmed.

The Court observed that the argument based on the appellant’s lack of diligence was not a valid ground for refusing condonation of delay. It then turned to examine two Privy Council decisions that had been cited. In the first case, Ram Narain Joshi v. Parmeshwar Narain Mehta, the Privy Council considered a matter in which, on 9 August 1895, the High Court issued an order directing that the appeal should be transferred to the High Court under section 25 of the Code of Civil Procedure and tried together with another appeal already pending there. The High Court’s order permitted the respondent to raise any objections to the transfer. On 16 September 1895 a petition was filed by the appellant objecting to the transfer, and the issue that arose was whether sufficient cause had been shown for the delay between 9 August 1895 and 16 September 1895. The decree appealed from had been passed on 25 June 1894 and the appeal against that decree had been presented to the District Judge in September 1894. The Court noted that the question in that case concerned the delay between the dates of the order and the petition, a situation different from the present case, and that the Privy Council upheld the High Court’s view that the appellant had not satisfactorily explained the delay. Consequently, the Court found that this decision could not aid in interpreting section 5 of the Limitation Act. The citation for this case is (5) (1902) L.R. 30 I.A. 20. The second decision referred to by the respondent was Bri Indar Singh v. Kanshi Ram. In that case the primary issue related to section 14 read with section 5 of the Limitation Act, 1908, and concerned whether the period consumed by an application for review—although made on a mistaken view of the law—should be counted as part of the time allowed for filing an appeal. The Court reiterated that when limitation is assessed under the combined operation of sections 14 and 5, the conditions expressly imposed by section 14 must be satisfied. However, it would be unreasonable to require that those conditions be applied to exactly the same extent and in the same manner to applications falling solely under section 5. The Court observed that the provisions of section 5 in the present Limitation Act are substantially similar to those in section 5(b) and section 5, 1 paragraph 2 of the Limitation Acts of 1871 and 1877 respectively. It further noted that section 5A, added to the 1877 Act by the amending Act VI of 1892, dealt with the subject covered by the explanation to section 5 in the current Act, and that the explanation includes, among other matters, the fact that an appellant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period of limitation.

The Court explained that if the appellant was misled by any order, practice or judgment of the High Court in determining or calculating the prescribed period of limitation, such misdirection may constitute sufficient cause within the meaning of section 5. Consequently, when a party seeks an extension of time and shows that the delay resulted from any of the circumstances listed in the explanatory note, that delay is treated as sufficient cause. Once the delay is classified as sufficient cause, the Court must then consider whether to exercise its discretion in favour of the party seeking relief. In situations covered by the explanation, the Court often finds it straightforward to decide that discretion should be exercised and that the delay ought to be condoned. Nevertheless, the exercise of discretion remains a discretionary act even in such cases. Under section 5A of the Act of 1877, however, if the same facts were proved under that provision, the statute left no discretion to the Court because it expressly provided that an appeal filed after the statutory period, but where the appellant was misled by any order, practice or judgment of the High Court of the Presidency, Province or District, shall for all purposes be deemed to have been presented within the prescribed period. That statutory rule does not apply to the present appeal. Accordingly, the Court allowed the appeal, condoned the one‑day delay in filing, and remitted the matter to the Court of the Judicial Commissioner for determination on its merits in accordance with law. The appellant was ordered to pay the costs of this Court, and the costs already incurred in the Judicial Commissioner’s Court will be treated as costs in the present appeal. The appeal was therefore allowed.