1 IN THE HIGH COURT OF BOMBAY AT GOA MISC. CIVIL APPLICATION NO.761 OF 2010 IN STAMP NUMBER MAIN NO.2450 OF 2010 AND MISC. CIVIL APPLICATION NO. 762 OF 2010 IN STAMP NUMBER MAIN NO. 2448 OF 2010. MISC. CIVIL APPLICATION NO.761 OF 2010 IN STAMP NUMBER MAIN NO.2450 OF 2010 THE COMMISSIONER OF CENTRAL EXCISE. ...... APPLICANT. V/S. M/S. ADVANI HOTELS AND RESORTS LTD. ...... RESPONDENT. MISC. CIVIL APPLICATION NO.762 OF 2010 IN STAMP NUMBER MAIN NO.2448 OF 2010 THE COMMISSIONER OF CENTRAL EXCISE. ..... APPLICANT. V/S. SHIR SUNDER G. ADVANI. ..... RESPONDENT. Mr. C. A. Ferreira, Asst. Solicitor General for the Applicant. Mr. Darius Shroff, Senior Advocate with Mr. H. D. Naik, Advocate for the Respondents. 2 CORAM : S.C. DHARMADHIKARI & F.M. REIS, JJ. DATE : 19TH APRIL, 2011. P.C.:- This is an Application for condonation of delay in filing the Excise Appeal. 2. The Applicant Commissioner of Central Excise, Goa Commissionarate, in this Application states that being aggrieved by an Order passed on 6th January, 2005 by the Central Excise & Service Tax Appellate Tribunal (CESTAT), West Zone, Mumbai, which itself refused to condone the delay in filing an Appeal to the said Tribunal, the present Appeal has been filed. 3. The delay is more than 5 years. The present application for condonation of delay is affirmed on 6th September, 2010 and the grounds which constitute the "sufficient cause", according to the Applicant, are these : “ 4) However, by inadvertence, only one noticee was arrayed as Respondent and subsequently to overcome this lacunae, three separate appeals 3 against the other three noticees came to be filed. However, since there was a delay of forty days in filing the appeals, the application for condonation of delay was made in each of the appeals. 6) That the applicant was not aware of the dismissal as no intimation was given to the Department and the Department was bonafidely under the belief that all the appeals were pending before the CESTAT West Zone at Mumbai and the records indicate that efforts were being made to get all the matters listed for early hearing from time to time. 7) It was only sometime in the month of June 2010 viz. 15th June, 2010, that the Joint Commissioner of Central Excise, viz. Shri S.K. Virdi, telephonically contacted Joint CDR, Mumbai, viz. Shri Mahajan who informed him that the department needed to implead other noticees as parties in the appeal filed against M/s. Waterways Shipyard Pvt. Ltd., and also that a request ought to be made to club all the petitioners for hearing before the CESTAT.” 4. It is submitted by the learned Asst. Solicitor General appearing for the Applicant that the delay is because the Goa Commissionarate had no intimation about the impugned Order. It was 4 not informed and, therefore, it was under an impression that the proceedings are pending before the CESTAT, West Zone at Bombay. He submits that the interest of Revenue should not suffer on account of negligence or inaction on the part of the Officers and in public interest, the delay deserves to be condoned by interpreting the term "sufficient cause" liberally. Reliance is placed on a decision of the Hon'ble Supreme Court in the case of State of Nagaland vs. Lipok AO, reported in 2005(3) SCC 752. 5. On the other hand, Mr. Shroff, learned Senior Counsel appearing on behalf of the Respondent/Assessee submits that this application seeks condonation of delay of 1560 days, but the delay properly calculated is of 5 years and 8 months and approximately 2010 days. He submits that a valuable right has accrued to the Respondent on account of the gross negligence and inaction on the part of the Department in preferring an appeal. The delay is sought to be explained, but the explanation is completely false. He submits that the explanation in para 6 that the Department was not aware of the impugned Order, is incorrect on the face of it, to say the least. Inviting our attention to the Annexures to the Memo of 5 Appeal and particularly, the Order dated 6th January, 2005, Shri Shroff submits that this Order was passed in the Open Court and in the presence of the Counsel appearing for the Assessee and the Department's representative, representing the Revenue. Not only this, but the Order, apart from being communicated electronically, was specifically forwarded to the Chief Commissioner of Customs, Pune. Thus, the explanation that the Department was not communicated the order is false and lacks in bonafides. In such circumstances, this gross delay should not be condoned. He relies upon a Judgment of the Hon'ble Supreme Court in Balwant Singh vs. Jagdish Singh, reported in 2010 (262) E.L.T. 50, rendered in Civil Appeal No.1166 of 2006 with IA No.1 and 2 of 2010, decided on 8th July, 2010. He submits that all earlier decisions have been considered and it is held that the State does not deserve any special treatment in such matters and all litigants are alike and that is how the Supreme Court has proceeded to reject the application when the delay is sought to be explained on grounds which are found to be false and exhibiting complete inaction, negligence and malafides. 6. With the assistance of the learned Counsel appearing for 6 parties, we have perused the application and the affidavit in reply. We have also perused the decisions that have been brought to our notice by the Counsel appearing for parties. 7. Mr. Fereira relied upon a decision in the case of State of Nagaland vs. Lipok AO (supra) in which the State of Nagaland had approached the Supreme Court, challenging an Order passed by a Single Judge of Gauhati High Court, Kohima Bench, refusing to condone the delay. That was an application made under Section 378(3) of the Code of Criminal Procedure. The applicant therein was seeking condonation of delay in filling an Appeal against acquittal, challenging the Judgment of acquittal of the learned Additional Deputy Commissioner (Judicial) Dimapur, Nagaland. That Judgment was pronounced on 18th December, 2002. The delay was occasioned on account of the Department receiving the order on 15th January, 2003 and without wasting any further time, on the same day, the relevant documents and papers were put up for necessary action before the Authorities. In that case, the whole file along with the note sheet, was found missing from the Office and could not be traced inspite of best efforts. Finally, it was traced on 15th March, 2003 and ultimately, the 7 opinion came that the Appeal should be filed, which opinion was given on 26th March, 2003. The appeal was filed on 14th May, 2003. The delay was, thus, of 57 days and in the facts and circumstances, properly explained. The Supreme Court then referred to its earlier decision and particularly the one rendered in Collector Land Acquisition vs. Katiji, reported in 1987 (2) SCC 107 wherein the principle that "sufficient cause" is a term which is adequately elastic to enable the court to apply the law in meaningful manner which subserves the ends of justice, and quoted it with approval. 8. After that decision of the Hon'ble Supreme Court, there are several decisions rendered and one of the latest in point of time is the one on which reliance is placed by Shri Shroff, learned Senior Counsel appearing for the Respondent/Assessee. The Supreme Court considered all the Judgments in the field and noted that the delay in that case was of 778 days. The Supreme Court referred to the arguments advanced, seeking condonation of delay on the ground that liberal principles must be applied. After taking stock of all the decisions, including in the case of P. K. Ramchandran vs. State of 8 Kerala, reported in (1997) 1 SCC 556, where the application seeking condonation of delay in filing a First Appeal by the State was not granted by the Supreme Court, ultimately, this is what is held in paragraph 13 : " 13. As held by this Court in the case of Mithailal Dalsangar Singh (supra), the abatement results in the denial of hearing on the merits of the case, the provision of abatement has to be construed strictly. On the other hand, the prayer for setting aside an abatement and the dismissal consequent upon an abatement, have to be construed liberally. We may state that even if the term 'sufficient cause' has to receive liberal construction, it must squarely fall within the concept of reasonable time and proper conduct of the concerned party. The purpose of introducing liberal construction normally is to introduce the concept of 'reasonableness' as it is understood in its general connotation. The law of limitation is a substantive law and has definite consequences on the right and obligation of a party to arise. These principles should be adhered to and applied appropriately depending on the facts and circumstances of a given case. Once a valuable right, as accrued in favour of one party as a result of the failure of the other party to explain the delay by 9 showing sufficient cause and its own conduct, it will be unreasonable to take away that right on the mere asking of the applicant, particularly when the delay is directly a result of negligence, default or inaction of that party. Justice must be done to both parties equally. Then alone the ends of justice can be achieved. If a party has been thoroughly negligent in implementing its rights and remedies, it will be equally unfair to deprive the other party of a valuable right that has accrued to it in law as a result of his acting vigilantly. The application filed by the applicants lack in details. Even the averments made are not correct and ex-facie lack bona fide. The explanation has to be reasonable or plausible, so as to persuade the Court to believe that the explanation rendered is not only true, but is worthy of exercising judicial discretion in favour of the applicant. If it does not specify any of the enunciated ingredients of judicial pronouncements, then the application should be dismissed. On the other hand, if the application is bona fide and based upon true and plausible explanations, as well as reflect normal behaviour of a common prudent person on the part of the applicant, the Court would normally tilt the judicial discretion in favour of such an applicant. Liberal construction cannot be equated with doing injustice to the other 10 party. In the case of State of Bihar v. Kameshwar Prasad Singh [ (2000) 9 SCC 94], this Court had taken a liberal approach for condoning the delay in cases of the Government, to do substantial justice. Facts of that case were entirely different as that was the case of fixation of seniority of 400 officers and the facts were required to be verified. But what we are impressing upon is that delay should be condoned to do substantial justice without resulting in injustice to the other party. This balance has to be kept in mind by the Court while deciding such applications. In the case of Ramlal and Ors. v. Rewa Coalfields Ltd. [AIR 1962 SC 361] this Court took the view: “7. In construing Section 5 it is relevant to bear in mind two important considerations. The first consideration is that the expiration of the period of limitation prescribed for making an appeal gives rise to a right in favour of the decree holder to treat the decree as binding between the parties. In other words, when the period of limitation prescribed has expired the decree-holder has obtained a benefit under the law of limitation to treat the decree as beyond challenge, and this legal right which has accrued to the decree holder by lapse of time should not be light heartedly disturbed. The other 11 consideration which cannot be ignored is that if sufficient cause for excusing delay is shown discretion is given to the Court to condone delay and admit the appeal. This discretion has been deliberately conferred on the Court in order that judicial power and discretion in that behalf should be exercised to advance substantial justice. As has been observed by the Madras High Court in Krishna v. Chathappan ILR 13 Mad 269. It is however, necessary to emphasize that even after sufficient cause has been shown a party is not entitled to the condonation of delay in question as a matter of right. The proof of a sufficient cause is a condition precedent for the exercise of the discretionary jurisdiction vested in the court by Section 5. If sufficient cause is not proved nothing further has to be done; the application for condoning delay has to be dismissed on that ground alone. If sufficient cause is shown then the Court has to enquire whether in its discretion it should condone the delay. This aspect of the matter naturally introduces the consideration of all relevant facts and it is at this stage that diligence of the party or its bona fides may fall for consideration;...." 9. Thus, even if the term "sufficient cause" is elastic and it must 12 receive a liberal construction, the Supreme Court holds that this liberal construction is to introduce the concept of 'reasonableness'. The concept of reasonable time and proper conduct are relevant factors and should be borne in mind. Once a valuable right, as accrued in favour of one party as a result of the failure of the other party to explain the delay by showing sufficient cause and its own conduct, it will be unreasonable to take away that right on the mere asking, particularly if the delay is a result of negligence, default or inaction of that party. 10. In the facts before us, this principle must be applied. It is applicable because inaction and negligence is writ large. In the application, it has been stated that the Department was not informed of the order. Firstly, the Department was represented before the CESTAT, West Zone, Mumbai. Secondly, the order was dictated in the Open Court on 6th January, 2005 and from a copy of the said order annexed to the Memo of Appeal, it is apparent that it was communicated to the Department. Therefore, to suggest that no intimation was given to the Department and, thereafter, explaining it orally by submitting that the Department in this case means the Applicant who is the Excise Commissioner at Goa can, by no stretch of 13 imagination, be said to be a correct and bonafide explanation for the delay. 11. The delay, in this case, is gross as it is of more than 5 years. Once such is the period, then, it was expected from the Department and particularly the applicant, to state the correct facts. Once the explanation and particularly in paras 6 and 7 indicates that there is complete inaction which could also be termed as a negligence in the given facts and circumstances, then, the principle laid down in the case of Balwant Singh vs. Jagdish Singh (supra) must apply. Once we hold that there is no "sufficient cause" for condoning the delay, there is no alternative, but to reject the application. 12. Accordingly, the application is rejected. No costs. S.C. DHARMADHIKARI, J. F.M. REIS, J. ssm.