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Reliance Industries Limited, Rep. by Reliance Consultancy Services Limited v/s M. Rajkumari

    C.R.P. No. 3768 of 2000

    Decided On, 23 April 2001

    At, High Court of Judicature at Madras


    For the Petitioner: V. Nataraj, Advocate. For the Respondent: C. Jayachandran, Advocate.

Judgment Text

1. The petitioner is the defendant against whom an ex parte decree was passed. The petitioner is aggrieved by the refusal to set aside the ex parte decree. The respondent filed O.S.No.5852 of 1997 for a declaration that she is a lawful owner of the Schedule mentioned shares and for a permanent injunction and for other reliefs. An ex parte decree was passed on 12.1.1998. The petitioner filed the application to set aside the ex parte decree on 1.3.1999 with a delay of 421 days. The reason given for the delay was not accepted by the Court below. Therefore, the civil revision petition is filed.

2. Mr. V.Natraj, learned counsel for the petitioner submitted that the short cause title shows the address of the petitioner at 56, Mogra Village Lane, Andheri (E), Bombay 400 069. But actually the address is at Nariman point, Bombay 21 and therefore,, they did not have the knowledge of the ex parte decree immediately and had filed the application after they received information of the passing of ex parte decree though with a delay. He relied on the judgment of the Supreme court in N. Balakrishnan v. H. Krishnamurthy, 1998 (7) SCC 123 where the Supreme Court held that the length of delay is not relevant and that rules of limitation are not meant to destroy the rights of parties. He also referred to the decision reported in Suryanarayana Paper and Boards Pvt. Ltd., v. V. Padmakumar, 1997 (88) Com. Cases 684 where this Court had held that the residence of a company in India is where its registered office is located and it is desirable that normally case should be filed where the registered office is situated. He submitted that third party's rights will suffer when the ex parte decree is not set aside and to advance the interest of justice the Court should accept the cause offered by the petitioner for the delay and order the application as prayed for.

3. The learned counsel for the respondent on the other hand submitted that no reason whatsoever has been given for the delay and therefore, the Court cannot come to the conclusion that there was sufficient cause. He also submitted that there has been correspondence between the respondent and Karvy Consultancy which is the legal unit of the petitioner which clearly indicated that the petitioner was going to comply with the decree passed and in fact out of the 1550 shares that were subject matter of the suit already 1390 shares have been dematerialized and at this stage it was not open to the petitioner to come forward with this revision and he also submitted that the question of rights of third parties intervening does not arise in this case. He referred to the decision reported in Indian Oil Corporation Ltd.. v. Mrs. Sakuntala Ganapathy Rao, 1998 (3) CTC 170, where a Division Bench of this Court dealt with the considerations to be borne in mind by the Court while dealing with applications under Section 5 of the Limitation Act and also to the decision reported in Sri Veera Hanuman Rice and Flour Mill v. State Bank of India, 2000 AIR SCW 2575.

4. The ex parte decree was passed on 12.1.1998 and it is seen that the respondent was informed of it by the petitioner on 1.4.1998 itself. This is admitted by the petitioner. In fact the averment in the affidavit in support of the petition is that,

"The petitioner came to know about the ex parte decree only on 1.4.98 when it received a letter from the plaintiff. The petitioner immediately got in touch with its counsel at Chennai to verify the above fact. consequently there was a delay in filing the present application for setting aside the ex parte decree as the Petitioner had to obtain the relevant facts and this exercise took some time."

5. According to the petitioner, they came to know about the ex parte decree on 1.4.1998 and casually it is stated that they got in touch with the counsel and consequently there is a delay, as if it was a delay of just one or two days and not from 1.4.1998 to 1.3.1999. No explanation is given. The petitioner did not move an inch to take steps to file the application to set aside the ex parte decree promptly. Then again, the voluminous typed set of papers which was filed by the respondent herein shows, that the Karvy Consultants, which is the legal unit of the petitioner had been contacted by the respondent for issuing fresh share certificates. As early as 4.11.1998, the respondent has given an indemnity bond in favour of the petitioner which she was called upon to furnish before fresh share certificates are issued. Then again she has given a letter under the provisions of Section 108 of the Companies Act, 1956 addressed to the petitioner for issue of duplicate shares and this is also dated November 1998. Therefore, it is seen that there has been a continuous correspondence between the parties in pursuance of the ex parte decree. The respondent had no reason to believe it that after she had given the indemnity bond etc., the petitioner would retract its stand and file this application. In fact she had been asked to open a D.Mat account. She has done everything as per the procedure for being issued duplicate shares.

6. In the decision relied on by the counsel for the petitioner reported in N. Balakrishnan v. H. Krishnamurthy, 1998 (7) SCC 123, the Supreme court had said that condonation of delay is a matter of discretion of the Court and when there is latches on the part of the application the Court should compensate by imposing terms. But the Supreme Court has also said in this case in a pithy sentence, "Length of delay is no matter, acceptability of the explanation is the only criterion". In this case, the extract of the affidavit which is seen in the aforesaid paragraph would show that the petitioner has not bothered to give any explanation, in the Division Bench in Indian Oil Corporation Ltd.. v. Mrs. Sakuntala Ganapathy Rao, 1998 (3) CTC 170 this Court had held as follows:

"The period for preferring an appeal cannot be extended simply because the appellants case is hard and calls for sympathy, nor will the Courts extend the period of limitation merely out of benevolence to the party seeking relief. A Court granting indulgence must be satisfied that there was diligence on the part of the appellant and that he was not guilty of any negligence what so ever, ofcourse, Court should not be too strict as it might well defeat the ends of justice. Where there is no sufficient cause for condoning the delay having regard to the position of the party that too, when it is a corporation having assistance of best of men to conduct its affairs, should not be condoned as it amounts to a case of discretion not being exercised judicially. if there is no support by any evidence adduced for delay, the application therefor ought to be rejected. The word "sufficient cause" cannot be construed liberally merely because the party in default is the Government or an institution. In order to take a practical view of the working of a Government or an institution to the slow motion process of its wheels, there must be sufficient explanation from the source at which the delay occurred and the reasons for such delay. In the absence of satisfactory explanation of the delay by the institution the delay need not be condoned. "Sufficient cause" must be a cause which is beyond the control of the party invoking the aid of the section. A cause for delay, which a party could have avoided by the exercise of due care and attention cannot be a sufficient cause."

7. In the decision reported in Sri Veera Hanuman Rice and Flour Mill v. State Bank of India, 2000 AIR SCW 2575, the Supreme Court held that while indulgence should be shown in considering claims of parties there is no justification to ignore the subsequent facts and the realities of the situation. The laws of limitation may sometimes harshly affect the particular party. It cannot be denied while considering the matters that fall under Section 5 of the Limitation Act, discretion also has to be exercised cautiously.

8. In this case, a perusal of the order of the Court below shows that the learned Judge had painstakingly referred to each of the documents referred to by the respondent as well as the continued correspondence between the parties and had

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rightly held that even assuming that the petitioner came to know of the ex parte decree only on 1.4.1998, the inaction between 1.4.1998 to 1.3.1999 is unexplained. 9. The Supreme Court has, held that acceptability of the explanation is the only criterion. In this case, even a plausible explanation is not given. Further the respondent had also taken several steps in the belief that the ex parte decree has become final. This is revealed by the correspondence between the parties, she has also given the indemnity bond and the other documents referred to above, in compliance to the demand made by the agent of the petitioner and at this stage it is not open to the petitioner to reopen what has become final, especially when 'sufficient cause' has not been given to explain the delay. 10. The civil revision petition is therefore, dismissed. No costs. consequently, the C.M.P.No.568 of 200l is closed.