Condonation Of Delay | Courts Should Consider Relevant Aspects Like Conduct, Bonafide & Prejudice: Kerala High Court

The Kerala High Court has established that while taking a decision on an application for condonation of delay, the court should not merely consider the reasons stated in the application alone, but should also consider other attendant and relevant aspects.

Justice V.G. Arun observed that having contested the case in a lackadaisical manner and having failed to offer an acceptable explanation for the delay, the petitioners cannot bank upon the elasticity of the term 'sufficient cause' to plead equity or seek permission to contest the suit on merits.

"...elasticity of the expression 'sufficient cause' in Section 5 of the Limitation Act is dependent on factors like, acceptability of the explanation, bona fides and behaviour of the applicant and the prejudice that would be caused to the opposite party by the delay being condoned. In short, while taking a decision on an application for condonation of delay, the court cannot focus on the reasons stated or the period of delay alone, but should take into consideration other attendant and relevant aspects also." 

The first respondent herein had contested the petitioner company's case at all stages up to the Supreme Court and had succeeded in obtaining a substantial amount as compensation for the acquired land. Since the petitioner defaulted in their payment, the first respondent filed a suit before a Sub Court seeking recovery of an amount of Rs.17,00,000/- with interest and costs from the petitioner company.

The petitioner did not file a written statement, and thus the suit was decreed ex parte on 13.06.2016. Thereupon, the first respondent initiated execution proceedings for the realisation of the decretal amount. On being served with a notice, the petitioners moved applications before the Sub Court seeking to set aside the ex parte decree after condoning the delay of 838 days.

Since the notice sent to the first respondent in these applications was returned unserved, the court directed the petitioners to furnish the first respondent's correct address. Failure to furnish the correct address resulted in IAs being dismissed. The petitioners thereupon moved further applications for restoring their previous applications after condoning the delay of 102 days in filing the restoration applications. However, these were dismissed as well.

Aggrieved by this, the petitioners moved the High Court.

Advocate Varghese C. Kuriakose appearing for the petitioners contended that the first respondent had filed the suit raising an unconscionable claim of Rs.17,00,000/- towards the Advocate fees. They argued that the suit was decreed ex parte for reasons beyond their control and unless permitted to contest the suit on merits, they will be put to extreme prejudice and loss.

It was also contended that the first respondent had deliberately evaded the notice issued in the initial IAs and that being a practising lawyer, he ought to have accepted it.

Further, the petitioners submitted that since the delay in filing the restoration applications was only 102 days and they had offered sufficient explanation, the court below committed gross illegality in refusing to condone the delay. Dismissal of the delay condonation applications is against the settled position that ordinarily a litigation should be adjudicated on merits and not terminated by default, they argued. 

Advocate Dinesh R. Shenoy appearing for the first respondent took strong exception to the allegation that he had raised an unconscionable demand for Advocate fees and submitted that the suit was filed for the realisation of the fees in connection with the acquisition of land belonging to the first petitioner company. 

Moreover, it was pointed out that the notice in the second set of applications was served at his family house in Angamaly, although they knew fully well that he had shifted residence to Aluva. He argued that despite Court's repeated directions, absolutely no effort was taken to serve notice at the correct address.  The court below dismissed the applications realising that the attempt was to delay the hearing of the applications endlessly. According to him, however liberal the approach be towards applications for condonation of delay, that would not justify condonation in the instant case.

Therefore, it was argued that the trial court had exercised its jurisdiction in a proper manner, and that this Court shall not interfere with the same. 

The Single Judge noted that Section 5 of the Limitation Act empowers the courts to condone the delay, so as to do substantial justice to the parties by deciding the matters on merits. Several Supreme Court decisions were relied on to conclude that the discretion to condone delay was based on "sufficient and satisfactory explanation".

In the case at hand, the manner in which the petitioners had contested the suit, the causal explanation offered for the inordinate delay of 838 days to file the application for setting aside the ex parte decree, failure to take timely steps for serving notice on the first respondent and the vague explanation offered for the delay of 102 days in filing the restoration applications, had resulted in the court dismissal of the applications.

Finding the lower court to have exercised its discretion after considering all relevant aspects, Justice Arun decided not to interfere with the decision. As such, the original petition was dismissed.

Case Title: M/s Elstone Tea Estates Ltd. & Ors. v. Pius C. Mundadan & Anr.

Citation: 2022 LiveLaw (Ker) 210

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