HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH AFR RESERVED JUDGMENT RESERVED ON: 19-09-2019 DELIVERED ON: 18-12-2019 Court No. - 7 Case :- [CASE NUMBER] of 2019 Petitioner :- [ENTITY] & Ors. Respondent :- Addl. Dist. Judge Court No. 4 Spl. Judge (E.C.Act) Sitapur&O Counsel for Petitioner :- [ENTITY],Illegible,[ENTITY] Hon'ble [ENTITY],J.
By means of this petition under [SECTION] of the [ACT] the petitioner has challenged an order dated 24.4.2019 passed by the Additional District Judge (Court No.4)/Special Judge (E.C. Act), Sitapur, dismissing the application of the petitioner under [SECTION] of the [ACT] (hereinafter referred as 'Act 1963') which was filed alongwith the appeal filed by the petitioners against the judgment and decree passed in [CASE NUMBER] allowing the suit of the private opposite parties herein. The application under [SECTION] was registered as [CASE NUMBER] and the same has been dismissed by the Appellate Court.
A question arose during the course of hearing as to the maintainability of this petition and whether a second appeal under [SECTION] [ACT] would not lie against the impugned judgment ? In response, the learned counsel for the petitioner submitted that the order which has been impugned herein does not fall within the definition of decree under [SECTION] of the [ACT], as it does not conclusively determine the rights of the parties with regard to all or any of the matters in controversy in the appeal arising out of the suit, instead it only rejects the application under [SECTION] of the [ACT] which was registered as a separate miscellaneous case. As no decree of such an order is prepared, a second appeal under [SECTION] [ACT] will not lie as it lies against appellate decrees.
Learned counsel for the petitioner relied upon a decision of the Supreme Court in the case of [ENTITY] v. Vijai Singh and others, AIR 2001 SC 279 in support of his contention.
At first blush the submission of the petitioners' counsel appeared to be quite attractive, especially in view of the law laid down by the Supreme Court in the case of [ENTITY] (supra) wherein, the provision contained in [SECTION], [ACT], defining a decree, had been considered and it was held that an order dismissing an application under [SECTION] of the Act 1963 would not be a decree and that the order rejecting the memorandum of appeal consequent to rejection of the application under [SECTION] of the Act 1963 was merely an incidental order. In the said decision the Supreme Court approved the Full Bench decision of the Calcutta High Court in [ENTITY] & ors. V. Benian Bibi & ors., AIR 1976 Calcutta 415. The Supreme Court approved the reasoning of the Full Bench that when an appeal is barred by limitation, it cannot be admitted at all until the application under [SECTION] of the Act 1963 is allowed and until then the appeal, even if filed, will remain in limbo. If the application is dismissed, the appeal becomes otiose. Approving the said view, the Supreme Court disapproved the contrary view taken by other High Courts. The Privy Council decision in [ENTITY] & anr. V. Suresh Chandra Dey & anr., AIR 1932 PC 165, was also considered in [ENTITY] (supra), but it was observed that the said decision does not help in the context of the case before it, as, it related to the scope and interpretation of [SECTION] of the old [ACT] and in this regard it noticed serious departure made by the Parliament in the existing [ACT].
However, this court finds that in a subsequent decision in the case of [ENTITY] v. Pannna Lal Jaiswal & ors., AIR 2005 SC 226, a three Judge Bench of the Supreme Court did not approve of the earlier view taken in the case of [ENTITY] (supra) and it held that an order passed on an application under [SECTION] of the Act 1963 rejecting the same is nevertheless an order passed in appeal. It disapproved the Full Bench decision of the Calcutta High Court in [ENTITY] & ors. (supra) and approved another Full Bench decision of the Kerala High Court in [ENTITY] v. Mathew, AIR 1988 Ker. 48, wherein it was held that an appeal presented out of time was nevertheless an appeal in the eyes of law for all purposes and an order dismissing the appeal was a decree and that could be the subject of a second appeal.
It is fruitful to refer to the decision of the Full Bench of the Kerala High Court in [ENTITY]'s case (supra) wherein their Lordships noticed the provision of [SECTION] [ACT] and then held as under :
"It is clear from [SECTION] that there is a proper presentation of the appeal filed out of time if it is accompanied by an application to condone delay supported by an affidavit setting forth the grounds for the condonation of delay. [SECTION] requires the application to be finally decided by the court before it proceeds to deal with the appeal under [SECTION] or [SECTION], as the case may be. A dismissal of the application for condonation of delay results in the dismissal of the appeal which can only be under [SECTION]. [SECTION] of the [ACT] also requires an appeal filed after the prescribed period of time to be dismissed subject to the provisions contained in [SECTION]. [SECTION] does not render an appeal properly presented under [SECTION], a proposed appeal. [SECTION] in spite of its language would only mean that no stay of the execution of the decree appealed against shall be granted before the court after hearing the appeal under [SECTION] decides to admit the same. An appeal presented out of time is nevertheless an appeal in the eye of law for all practical purposes (vide [PRECEDENT]). The question, whether an appeal properly presented with a petition to condone the delay can be admitted or not, is at the second stage and to reach that stage the application has to be disposed of finally. [SECTION] of the [ACT] also makes it obligatory on the part of the court to dismiss an appeal presented out of time subject, of course, to the provisions of [SECTION]. In a case, where an appeal has been admitted and then dismissed on a preliminary objection raised at the hearing disclosing the fact that the appeal was filed out of time, is it possible to say that the order dismissing the appeal, though on the ground of limitation, is not a decree? The question is whether a dismissal of the appeal after considering an application to condone the delay should be treated differently. An appeal filed out of time is required to be dealt with by the appellate court under [SECTION] of the [ACT] and an order dismissing the appeal is a decree that can be subject of a second appeal as held by the Full Bench in [ENTITY]'s case ([PRECEDENT]. [SECTION], [ACT] requires an appellate court, not being the High Court, dismissing an appeal under [SECTION] to deliver a judgment and a decree is to be drawn up in accordance with the judgment. It is thus clear that the dismissal of an appeal under [SECTION], [SECTION] postulates the drawing up of a decree which can be the subject of a further appeal under [SECTION], [SECTION], [ACT]. [SECTION] does not dispense with the need of a decree when the High Court dismisses an appeal under [SECTION]. The only exception is that it need not deliver a judgment recording its reasons for dismissing the same. It seems to us clear that [SECTION] introduced by the [ACT]. [ACT] does not in any way affect the principle laid down by the Full Bench in [ENTITY]'s case and by [ENTITY], J. in [ENTITY]'s case ([PRECEDENT]."
Their Lordships also took note of a Division Bench of the Allahabad High Court rendered as early as in 1884 in [PRECEDENT], wherein it was held as under :
"In the [ACT] there is no separate provision which allows the appellate court to "reject" a memorandum of appeal on the ground of its being barred by limitation. [SECTION] is limited to cases in which the memorandum of appeal is not drawn up in the manner prescribed by the Code, and it is only by applying [SECTION], (as provided by the last part of [SECTION]), to appeals that the Code can be understood to make provision for rejection of appeals as barred by limitation. However, [SECTION] of the [ACT] clearly lays down that every "appeal presented after the period of limitation prescribed therefor shall be dismissed." It is, therefore, clear that the order of the District Judge in this case must be taken to be one which falls under the definition of "decree" within the meaning of [SECTION] of the Code, as the order, so far as the Judge was concerned, disposed of the appeal."
The Full Bench also noticed decision of the Supreme Court in [ENTITY] & sons (supra) v. the Commissioner of Income Tax, Punjab, (1956) 29 ITR 607 (SC), wherein inter alia the Supreme Court affirmed the decision of the Madras High Court in [PRECEDENT], which had held that if the appeal is dismissed as incompetent or is rejected as it was filed out of time and no sufficient cause was established, it results in an affirmation of the order appealed against.
The Supreme Court in [ENTITY] (supra) also affirmed another decision of the Calcutta High Court reported in [PRECEDENT], in which it had been held that an appellate order may not, directly and by itself, confirm or reduce or enhance or annul an assessment and may yet dispose of the appeal. If it does so, it is immaterial whether the ground is a finding that the appeal is barred by Limitation or a finding that the case is not fit one for extension of time or both.
Referring to the aforesaid cases the Supreme Court in [ENTITY] (supra) concluded, as observed by the Full Bench, that there is, thus, abundant authority for the position that [SECTION] should be liberally construed so as to include not only orders passed on a consideration of the merits of the assessment, but also orders which dispose of the appeal on preliminary issues such as limitation and the like.
The Full Bench also noticed the decision of the Supreme Court in the case of [PRECEDENT], which had been followed in [ENTITY]'s case (supra) wherein it had been held as under:
"In the present case, the appeal was dismissed as barred by limitation. That it was an appeal even though barred by time is clear from [ENTITY] & Sons v. C.I.T. (AIR 1956 SC 367) where [ENTITY] J., speaking for the Court, after referring to [ENTITY] v. Suresh Chandra Dey, (AIR 1932 PC 165), [PRECEDENT] and [PRECEDENT] held that "an appeal presented out of time is an appeal, and an order dismissing it as time-barred is one passed in appeal". There can be no dispute then that in law what the respondent did was to file an appeal and that the order dismissing it as time-barred was one disposing of the appeal."
The Full Bench of the Kerala High Court went on to observe that disposal of an appeal filed out of time can only be by way of dismissal as provided for in [SECTION] of the [ACT]. An appeal registered under [SECTION] [ACT] is to be disposed off according to law and a dismissal of the appeal for the reason of delay in its presentation after the dismissal of an application for condonation of delay is in substance and effect a confirmation of the decree appealed against. This Full Bench decision was affirmed by the Supreme Court in [ENTITY]'s case(supra).
With regard to its earlier decision in [ENTITY]'s (supra) the Supreme Court in [ENTITY]'s case (supra) held that it was in conflict with the ratio of the decision in the case of [ENTITY] (supra) and the decision in [PRECEDENT], as also, the Privy Council's decision in [ENTITY] (supra), which, though referred, was not applied on the ground that it was based on [SECTION] of the [ACT]. The Supreme Court was of the view that the decision in [PRECEDENT] wherein also it was held that dismissal of an appeal from a decree on the ground that the appeal was barred by limitation, was a decision in the appeal and that such dismissal, when it confirms the decision of the Trial Court on the merits, itself amounts to the appeal being heard and finally decided on the merits, whatever may be the ground for dismissal of the appeal, was also not noticed in [ENTITY]'s case (supra) and latter was in conflict with the said decision. Thus, the earlier decision in [ENTITY]'s case (supra) was impliedly overruled.
Now in view of the Three Judge Bench decision of the Supreme Court in [ENTITY]'s case (supra) two things are clear, one, that an order dismissing an application under [SECTION] of the [ACT] for extending limitation for filing the appeal is also an order passed in appeal and the Full Bench of the Calcutta High Court when it held that an order rejecting a time-barred memorandum of appeal consequent upon refusal to condone the delay in filing that appeal was neither a decree nor appealable, did not lay down a correct law. In this view of the matter the irresistible conclusion is that a second appeal would lie against such an order as has been impugned in this writ petition as referred hereinabove.
Similar view has also been expressed by two coordinate Benches of this Court in the case of [PRECEDENT] and [PRECEDENT]. In the latter case a specific plea was raised that the order impugned therein merely dismissed the [SECTION] application but it nowhere stated that the appeal would also stand dismissed, therefore, the argument advanced was that the petition under [SECTION] of the [ACT] would be maintainable against such an order, but, this argument was repelled in view of the authoritative pronouncements discussed in the said judgment, as have also been referred hereinabove.
There is another three Judges Bench decision of the Supreme Court in the case of [PRECEDENT], wherein, a similar issue as to whether an order passed not on merits of the appeal but otherwise such as on an application for condonation of delay in filing the appeal, non-prosecution or for any other reason, would amount to an order passed in appeal was considered, and it was held that unless the Court had applied its mind to the case and after consideration affirmed it the order cannot be said to be one of affirmance and after noticing the decision of the Privy Council in [PRECEDENT]; decision of the Bombay High Court in [PRECEDENT] and the decision in [PRECEDENT] MB the Supreme Court opined that the principle behind majority of decisions is thus to the effect that where an appeal is dismissed on the preliminary ground that it was not competent or for non-prosecution or for any other reason the appeal is not entertained, the decision cannot be said to a "decision, on appeal" nor of affirmance. It is only where the appeal is heard and the judgment delivered thereafter, the judgment can be said to be a judgment of affirmance. However, in view of the later decision by a Three Judges' Bench of the Supreme Court in [ENTITY] (supra) the legal position at present is as discussed earlier i.e. such an order is an order passed in the appeal, hence appealable under [SECTION] [ACT]
There are, however, certain practical difficulties in filing a second appeal in such circumstances notice of which needs to be taken by the Court. In the State of U.P. when a time-barred first appeal is filed under the [ACT] alongwith an application under [SECTION] of the [ACT] for extension of limitation and condonation of delay, it is the application which is registered as a miscellaneous case, as has happened in this case and is decided first. Only when the delay is condoned the appeal is registered. If the delay is not condoned, the application under [SECTION] is dismissed and the matter is laid to rest. More often then not no consequential orders are passed on the appeal, dismissing it. As the order rejecting the application under [SECTION] is not treated as one passed on the appeal, but, is treated as an order passed in the miscellaneous case, no decree is prepared in terms of [SECTION] [ACT] This creates a practical difficulty in filing a second appeal against such an order under [SECTION] [ACT] There was consensus at the Bar that against such an order dismissing the application for condonation of delay under [SECTION] of the Act 1963 without any consequential order for dismissal of the appeal a decree is not prepared by the Civil Courts in this State under the existing provisions of [SECTION] the [ACT].
It is not out of place to refer to [SECTION] of the [ACT] reads as under :
"[SECTION]. Bar of limitation.- (1) Subject to the provisions contained in [SECTION], every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence."
This provision also mandates dismissal of the appeal itself if it is time-barred and application under [SECTION] for extension of limitation/condonation of delay is rejected.
In this view of the matter, as, considering the decision of the Supreme Court in [ENTITY] (supra), even such orders passed on application under [SECTION] of the Act 1963, are to be treated as not only disposing the said application but are also to be treated as an order passed in appeal, rejecting it, irrespective of the fact whether or not a consequential order of dismissal is passed in such appeal and a second appeal would lie under [SECTION] [ACT] against such an order, a decree of such an order should also be prepared treating it an order passed on the appeal itself, resulting in consequential dismissal of the appeal. This is the ratio of the Full Bench of the Kerala High Court [ENTITY]'s case (supra) wherein the provisions of the [ACT], [ACT] and various decisions on this issue have been considered elaborately, which has been approved by the Supreme Court in [ENTITY]'s case (supra). In fact, it would be in the fitness of things if the Civil Courts while dismissing an application under [SECTION] of the Act 1963 also pass consequential orders dismissing the appeal itself, as is also mandated under [SECTION] of the [ACT], as, in such a scenario, a decree of such an order would necessarily be prepared in terms of the existing provisions of the [ACT] and this would facilitate filing of a second appeal or its hearing and decision thereon. It is ordered accordingly.
In view of the above this petition under [SECTION] of the [ACT] is dismissed as not maintainable subject, however, to the observations made hereinabove.
Based on this judgment petitioner can apply for preparation of a decree of the order impugned. In the meantime he can prefer a second appeal relying upon [SECTION] [ACT] He should annex the original decree of the Trial Court to facilitate valuation etc. of the second appeal.
Let a copy of this judgment be circulated amongst District Judges in the State of U.P., who in turn shall circulate the same amongst other Judges of the District so that the practical difficulty being faced in filing second appeal as pointed out by the Members of the Bar, is removed.
The Registrar General of this Court shall take necessary steps for circulation of this judgment as aforesaid.
([ENTITY], J.) Order Date :- 18.12.2019 A.Nigam