The Supreme Court, in a judgment dated 19 March 2021, in Govt of Mahrashtra v M/s Borse Brothers Engineers and Contractors Pvt Ltd, held that the application of section 5 of the Limitation Act is not excluded by the scheme of the Commercial Courts Act.
This means that the delay for filing appeals under section 13 of the Commercial Courts Act can be condoned by showing sufficient cause as per section 5 of the Limitation Act.
One of the issues considered by the bench, comprising Justices RF Nariman, BR Gavai and Hrishikesh Roy, was whether the application of section 5 of the Limitation Act is excluded by the scheme of the Commercial Courts Act.
The bench overruled the decision in M/s NV International vs State of Assam, which had strictly held that a delay of more than 120 days in filing of appeals under section 37 of the Arbitration and Conciliation Act, 1996, cannot be condoned.
The court noted that section 13(1A) of the Commercial Courts Act does not contain any provision akin to section 34(3) of the Arbitration Act. Section 13(1A) of the Commercial Courts Act only provides for a limitation period of 60 days from the date of the judgment or order appealed against, without further going into whether delay beyond this period can or cannot be condoned.
The court also noted that the non-obstante clause contained in the Commercial Courts Act would not override the Limitation Act, as a result of which the applicability of section 5 would not be excluded. The court referred to BK Educational Services (P) Ltd v Parag Gupta & Associates (2019) to arrive at the above-mentioned conclusion.
However, the bench clarified that the expression “sufficient cause” was not elastic enough to cover long delays beyond the period provided by the appeal provision itself.
Given the objective of speedy disposal that is sought to be achieved under the Commercial Courts Act, for appeals filed under section 13(1A) of the Commercial Courts Act, a delay 60 days is to be condoned by way of exception, and not by way of rule. In a fit case in which a party has otherwise acted bona fide, and not in a negligent manner, a short delay beyond such period can, at the discretion of the court, be condoned.
The dispute digest is compiled by Numen Law Offices, a multi-disciplinary law firm based in New Delhi and Mumbai. The authors can be contacted at firstname.lastname@example.org. Readers should not act on the basis of this information without seeking professional legal advice.