Limitation Act Applies To Commercial Disputes But Delay Can Be Condoned Only In Exceptional Cases: Kerala High Court

The Division Bench comprising Justice Anil K. Narendran and Justice Sophy Thomas though took note of the intent of the statute to have speedy disposal of commercial disputes, cited Government of Maharashtra (Water Resources Department) represented by Executive Engineer v. Borse Brothers Engineers and Contractors Private Limited (2021) where the Supreme Court held that delay in appeals filed under Arbitration Act and Commercial Courts Act can be condoned "by way of exception".

The bench also took note of Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy (2013), wherein the Apex Court held that application for condonation of delay ought to be carefully drafted, on harbouring the notion that the courts are required to condone delay on the principle that adjudication of a lis on merits is seminal to justice dispensation system. 

On perusal of the documents submitted by the appellant, in support of his case for condonation of delay, the Court was thus of the considered view that, 

"...the respondents have no case that they had lost anything acquired in equity and justice due to the inaction or laches from the part of the appellant". 

The Commercial suit before the Commercial Judge’s Court, Kollam had been decreed by holding the respondents/plaintiffs as being entitled to realise Rs.19,75,448/- from the appellant/defendant, with 6% interest per annum from the date of suit till realisation. It is noted that the appellant had applied for certified copy of the judgment on March 4, 2023, and stamp papers were called on May 20, 2023. The appellant thus, ought to have filed the appeal on July 20, 2023. 

However, the appellant averred that a delay of 25 days occurred in filing the appeal, since he had to adjust money from his business in order to raise the huge court fee. The appellant's specific case was that he had lost his cashew business, and suffered several personal setbacks such as angiolasty for himself, prolonged ailment and hospitalisation of his father, and intermittent hospitalization for his infant child, due to chronic respiratory issues. 

He added that such personal issues coupled with his financial stringency during the relevant period prevented him from personally reaching out to his counsel for the purpose of finalisation of appeal by making the payment for litigation expenses including court fees. 

The counsel for the respondents however asserted that the Commercial Courts Act, 2015, had been enacted for speedy disposal of commercial disputes, as a result of which the Limitation Act would not have any application in commercial courts. It was argued that the appellant had not sufficiently explained the reason for the delay, and that his inability to raise the court fee amount would not be a valid ground for condonation. It was added that the appellant would also have to explain the delay of each day, since belayed appeals can be condoned only when sufficient reason is shown before the Court. 

On perusal of the appellant's reasons for delay, coupled with the affidavits submitted by him, the Court took the view that the appellant's grounds appeared justifiable, and that he had been diligently defending his case before the trial court prior to that. 

"True that, the reason stated in the first affidavit filed by the appellant along with C.M.Appln. No.1 of 2023, was not satisfactory. The additional affidavit coupled with Annexure A1 discharge summary of a nine month old baby of the appellant during the relevant period, reasonably justifies the delay. That document is not seriously disputed by the respondents. Moreover, in normal human parlance, one may not tell a lie that his nine month old baby was seriously ill, in order to save the period of limitation," the Court added, while finding the present case as a fit one to exercise judicial discretion in condoning the delay of 25 days. 

However, the Court was quick to note that since the present case was a commercial dispute, the delay could be condoned only on imposition of cost of Rs. 10,000/-. The appellant was thereby directed to pay the said amount to the respondents on or before October 30, 2023, and file a memo before the Court to that effect. 

The application was thus allowed. 

Counsel for the Applicant/Appellant: Advocates A. Parvathi Menon, P. Sanjay, Biju Meenattoor, Indira K.P., Paul Varghese, P.A. Mohammed Aslam, Kiran Narayanan, Rahul Raj P., Amrutha M. Nair, and Muhammed Bilal V.A.

Counsel for the Respondents: Senior Advocate S. Sreekumar, and Advocates P. Martin Jose, P. Prijith, Thomas P. Kuruvilla, Ajay Ben Jose, R. Githesh, Manjunath Menon, Reju Prasad, Sachin Jacob Ambat, Anna Linda Eden, and Harikrishnan S. 

Citation: 2023 LiveLaw (Ker) 580

Case Title: Muhammed Shafeek v. M/S Tasty Nut Industries & Ors.

Case Number: CM.APPL.NO.1/2023 IN COML.A NO. 3 OF 2023

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