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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4367 OF 2004

M.P. STEEL CORPORATION                   …APPELLANT               

VERSUS

COMMISSIONER OF CENTRAL  EXCISE                   ...RESPONDENT

J U D G M E N T

R.F. Nariman, J.

1.      The facts giving rise to the present appeal are as follows.

The appellant is engaged in ship breaking activity at Alang Ship

Breaking Yard.  The appellant imported a vessel, namely, M.V.

Olinda, for the purpose of breaking the same, and filed a Bill of

Entry when the vessel was imported on 7.2.1992.  It declared in

the said Bill of Entry that the Light Displacement Tonnage of the

vessel was 7009 metric tons.  On 19.2.1992, the appellant was

informed by the Superintendent of Customs and Central Excise

Alang  that  the  Light  Displacement  Tonnage  of  the  ship  is

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actually 8570 tons and that customs duty was to be levied on

this tonnage.  On 3.3.1992, the appellant cleared the vessel on

payment of customs duty on the basis of 7009 metric tons and

executed  a  bank  guarantee  for  Rs.19,90,275/-  being  the

difference in customs duty on 1561 metric tons.  On 25.3.1992,

the  Collector  of  Customs,  Rajkot,  directed  the  Assistant

Collector, Bhavnagar to encash the bank guarantee furnished

by the appellant.  On 2.4.1992, the Superintendent of Customs

and Central Excise sent a letter to the appellant communicating

the decision of the Collector, as aforesaid.  The bank guarantee

was duly encashed on 3.4.1992.  After protesting against the

said  illegal  action  of  the  Department  in  encashing  the  bank

guarantee,  the  appellant  preferred  an  appeal  against  the

Superintendent’s letter dated 2.4.1992 and the Collector’s order

dated 25.3.1992 before CEGAT.  On 23.6.1998, the Appellate

Tribunal  allowed  the  appeal  and  set  aside  the  order  of  the

Collector dated 25.3.1992.  In the year 2000, the Department

preferred  an  appeal  before  this  Court.    On  12.3.2003,  this

Court allowed the appeal holding:

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“This  appeal  is  against  a  judgment  dated 23.6.1998 passed by the Customs, Excise And Gold (Control) Appellate Tribunal, West Regional Bench at Mumbai.  

Facts  briefly  stated  are  that  the  respondent filed a Bill  of Entry in respect of ship M.V. Olinda imported by them for  purposes of  breaking.   The respondent showed the light displacement tonnage (LDT) as 7009 metric tons.   This declaration was not accepted by the Superintendent of Customs and Central Excise.  The respondent, thus, approached the Assistant Collector.  The question was how LDT was to be calculated.  It appears that between the Assistant  Collector  and  the  Collector  there  was some internal correspondence on this aspect.  The Collector took a policy decision on how LDT was to be calculated.  The Collector conveyed this decision to  the  Assistant  Collector  by  his  letter  dated 25.3.1992.  Pursuant thereto the Superintendent of Customs and Central Excise passed an order dated 2nd April, 1992 in respect of vessel M.V. “Olinda”.  Of course the order dated 2nd April, 1992 is based on the decision of the Collector.  However, the order remains that of the Superintendent of Customs and Central Excise.  

The respondent filed an appeal directly before CEGAT.  CEGAT has disposed of this appeal by the impugned  order.   CEGAT negatived  a  contention that the appeal was not maintainable before them on  the  basis  that  the  Superintendent’s  order  is nothing  more  than  a  communication  of  the  order passed by  the  Collector  (Appeals).   CEGAT held that the appeal was in fact against the Collector’s order.  

In our view, the reasoning of CEGAT cannot be sustained.  The decision taken by the Collector was not taken in his capacity as Collector (Appeals). Also the order by which respondent is aggrieved is

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the order passed by the Superintendent.  An appeal against  that  order  has  to  be  filed  before  the Commissioner  (Appeals)  under  Section  128.   By virtue of Section 129-A, CEGAT has no jurisdiction to entertain such an appeal.  

It is clear that the impugned order is passed without  any  jurisdiction.   Therefore,  it  cannot  be sustained.   We,  thus,  set  aside  the  order.   The appeal  is  accordingly  allowed.   There  will  be  no order as to costs.  

We  clarify  that  we  have  not  gone  into  the merits of the matter and that it will be open to the respondent to adopt such remedy as they may be advised, if in law they are entitled to do so.”  

2. After this judgment, on 23.5.2003, the appellant filed an

appeal  before the Commissioner  (Appeals)  against  the order

passed by the Superintendent, Customs dated 2.4.1992.  On

4.8.2003, an application to condone delay in filing the appeal

was made in the following terms:

“As appeal against the order of the Supdt. of Customs  was  filed  by  us  within  60  days  of  the receipt of the certified true copy of the judgment of the  Hon’ble  Supreme  Court.   It  is  our  respectful submission that  since the appeal  was filed by us before  the  correct  forum  with  due  dispatch  after receipt of the Supreme Court’s judgment, there has been no delay in filing the appeal.  It is well settled now  that  the  time  taken  for  pursuing  a  remedy before another appellate Forum is to be excluded for the purpose of computing the period for filing an appeal.  (Union Carbide India Ltd. Vs. CC 1998 (77)

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ECR 376, Karnataka Minerals & Mfg. Co. Ltd. Vs. CCE 1998 (101) ELT 627).”

3. By  an  order  dated  27.10.2003,  the  Commissioner  of

Customs  (Appeals)  dismissed  the  appeal  on  the  ground  of

delay stating that the appeal had been filed way beyond the

period of 60 days plus 30 days provided for in Section 128 of

the Customs Act.   Against  this order, CESTAT dismissed the

appeal of the appellant stating that the Commissioner (Appeals)

had no power to condone delay beyond the period specified in

Section 128.  

4. Shri Viswanathan, learned senior advocate appearing on

behalf of the appellant argued before us that the entire period

starting from 25.3.1992 up till 12.3.2003 ought to be excluded

by applying Section 14 of the Limitation Act.  According to him,

Section 14 of  the Limitation Act  would  apply  to  exclude this

period from the period of 90 days allowed in filing an appeal

filed to the Collector (Appeals) inasmuch as vide Section 29 (2)

of the Limitation Act Section 14 of the Limitation Act would also

apply to Tribunals set up under special or local Acts.  According

to him, the entire period   with which he was prosecuting, with

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due diligence, the abortive appeal filed before CEGAT should

be  excluded,  which  would  include  the  period  even  prior  to

22.6.1992  when  the  abortive  appeal  was  filed.   As  an

alternative  submission,  on  the  assumption  that  Section  14

applied only to Courts and not to Tribunals, he submitted that

the principle of Section 14 would then apply.  According to him,

Section 128 of the Customs Act before its amendment in 2001

would be attracted on the facts of this case giving him a period

of 90 days plus an extended period of a further period of 90

days within which the present appeal could be filed.  This being

the case, on an application of Section 14, the appeal would be

filed with no delay at  all  even if  the period from 3.4.1992 to

22.6.1992  and  12.3.2003  to  23.5.2003  is  to  be  taken  into

account, as that would be less than 180 days given to file the

appeal  under  the  old  Section  128.   He  cited  a  number  of

authorities which we will deal with in the course of this judgment

in support of all the aforesaid propositions.  

5. Shri A.K. Sanghi, learned senior advocate appearing on

behalf  of  the  Department  argued  that  Section  128  of  the

Customs  Act  excluded  the  application  of  Section  14  of  the

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Limitation Act in that the scheme of the Section is that only a

limited period should be given to an assessee beyond which

the appeal would become time barred.   In the present case,

Section 128 as amended post 2001 would apply to the facts of

this case and on the appellant’s own showing the appeal is out

of time by eleven and a half years. Section 128 only gives the

appellant 60 days plus another 30 days which have long gone.

He also argued that Section 14 of the Limitation Act would not

apply  to  Tribunals  but  only  to  Courts,  and  the  Collector

(Appeals)  was  at  best  a  quasi-judicial  Tribunal.   Further,

according to  him,  no question of  any principle of  section 14

would  get  attracted.   In  fact,  according  to  him,  there  is  no

pleading  qua  Section  14  at  all  –  the  only  pleading  is  for

condonation of delay and not for exclusion of time.  Section 14

requires that  five necessary ingredients must  be satisfied on

facts  before  it  can  be  attracted.  The  appellant  has  neither

pleaded nor proved any of these ingredients.  He also cited a

number of authorities which we will refer to in the course of this

judgment.  

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Ingredients of Section 14.  

Section 14 of the Limitation Act reads as follows:

“14.  Exclusion  of  time  of  proceeding  bona fide  in  court  without  jurisdiction.—(1)  In computing the period of  limitation for  any suit  the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(2) In computing the period of limitation for any application, the time during which the applicant has been  prosecuting  with  due  diligence  another  civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same  relief  shall  be  excluded,  where  such proceeding is  prosecuted in  good faith  in  a  court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(3) Notwithstanding anything contained in Rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply  in  relation  to  a  fresh  suit  instituted  on permission granted by the court under Rule 1 of that Order,  where  such  permission  is  granted  on  the ground that  the first  suit  must  fail  by reason of  a defect in the jurisdiction of the court or other cause of a like nature.

Explanation.—For the purposes of this section,— (a)  in  excluding the time during which a former civil

proceeding  was  pending,  the  day  on  which  that

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proceeding was instituted and the day on which it ended shall both be counted;

(b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;

(c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction.”

6. Shri  A.K.  Sanghi,  learned senior  counsel  appearing  on

behalf of the Department has stated that at no point of time has

the appellant taken up a plea based on Section 14.  Neither has

the  appellant  met  with  any  of  the  five  conditions  set  out  in

paragraph 21 of Consolidated Engg. Enterprises v. Principal

secy.,  Irrigation Deptt.,  (2008)  7  SCC 169,  which reads as

follows:-

“21. Section  14  of  the  Limitation  Act  deals  with exclusion of time of proceeding bona fide in a court without jurisdiction. On analysis of the said section, it  becomes  evident  that  the  following  conditions must be satisfied before Section 14 can be pressed into service:

(1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party;

(2) The prior proceeding had been prosecuted with due diligence and in good faith;

(3) The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature;

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(4) The earlier proceeding and the latter proceeding must relate to the same matter in issue and;

(5) Both the proceedings are in a court.”

7. Technically speaking, Shri A.K. Sanghi,  may be correct.

However,  in  an  application  for  condonation  of  delay  the

appellant pointed out that they were pursuing a remedy before

another appellate forum which ought to be excluded.  We deem

this averment sufficient for the appellant to contend that Section

14 of the Limitation Act or principles laid down under it would be

attracted to the facts of this case.  

We might also point out that conditions 1 to 4 mentioned

in the Consolidated Engineering case have, in fact, been met

by the appellant. It is clear that both the prior and subsequent

proceedings  are  civil  proceedings  prosecuted  by  the  same

party.  The  prior  proceeding  had  been  prosecuted  with  due

diligence  and  in  good  faith,  as  has  been  explained  in

Consolidated Engineering itself. These phrases only mean that

the  party  who  invokes  Section  14  should  not  be  guilty  of

negligence,  lapse  or  inaction.   Further,  there  should  be  no

pretended  mistake  intentionally  made  with  a

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view  to  delaying  the  proceedings  or  harassing  the  opposite

party.  On the facts of this case, as the earlier Supreme Court

order  dated  12.3.2003  itself  points  out,  there  was  some

confusion as to whether what was appealed against was the

Superintendent’s order or the Collector’s order.  The appellant

bona fide believed that it was the Collector’s order which was

appealed against  and hence an appeal  to  CEGAT would  be

maintainable.  This contention, however, ran into rough weather

in this Court.   Further, the time taken between 3.4.1992 and

22.6.1992 to file an appeal cannot be said to be inordinately

long.  Thus, neither was there any negligence, lapse or inaction

on facts nor did the appellant delay proceedings to harass the

Department by pretending that there was a mistake.  Condition

(3)  was  also  directly  met  –  this  Court  in  the  order  dated

12.3.2003 set aside CEGAT’s order on the ground that it was

without jurisdiction.  It is indisputable that the earlier proceeding

and the later proceeding relate to the same matter in issue and

thus condition 4 is also met.   Condition 5,  however, has not

been met as both the proceedings are before a quasi-judicial

Tribunal and not in a Court.  This, however, is not fatal to the

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present proceeding as what is being held by us in this judgment

is that despite the fact that Section 14 of the Limitation Act may

not apply, yet the principles of Section 14 will get attracted to

the facts of  the present case.  It  is  in this way that  we now

proceed to consider the law on the subject.

Whether the Limitation Act applies only to Courts and not to Tribunals  

8. A perusal of the Limitation Act, 1963 would show that the

bar of limitation contained in the Schedule to the Act applies to

suits, appeals, and applications.  “Suit” is defined in Section 2(l)

as not including an appeal or an application.  The word “Court”

is not defined under the Act.  However, it appears in a number

of its provisions (See: Sections 4,5,13,17(2),21).  A perusal of

the Schedule would show that it is divided into three divisions.

The first division concerns itself with suits.  Articles 1 to 113 all

deal with “suits”.   

9. Sections 2(a),(e) and (i) are material in that they define

what is meant by an applicant, a plaintiff and a defendant.

“2. Definitions.—In  this  Act,  unless  the  context otherwise requires,—

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(a) “applicant” includes— (i) a petitioner; (ii)  any  person  from  or  through whom  an  applicant  derives  his right to apply; (iii)  any  person  whose  estate  is represented  by  the  applicant  as executor,  administrator  or  other representative;

(e) “defendant” includes— (i)  any  person  from  or  through whom  a  defendant  derives  his liability to be sued; (ii)  any  person  whose  estate  is represented  by  the  defendant  as executor,  administrator  or  other representative;

(i) “plaintiff” includes— (i)  any  person  from  or  through whom a plaintiff derives his right to sue; (ii)  any  person  whose  estate  is represented  by  the  plaintiff  as executor,  administrator  or  other representative;”

10. Section 3(2) which is material states as follows: “3(2) For the purposes of this Act-

(a)A suit is instituted- (i)In an ordinary case, when the  plaint  is  presented  to the proper officer;  (ii)In the case of  a pauper, when  his  application  for

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leave to sue as a pauper is made; and (iii)In  the  case  of  a  claim against a company which is being  wound  up  by  the court,  when  the  claimant first  sends  in  his  claim  to the official liquidator;  

(b) Any claim by way of a set off or  a  counter  claim,  shall  be treated  as  a  separate  suit  and shall  be  deemed  to  have  been instituted –  

(i)in the case of a set off, on the same date as the suit in which the set off is pleaded; (ii)in the case of  a counter claim, on the date on which the counter claim is made in court;  

(c)an  application  by  notice  of motion in a High Court is made when  the  application  is presented to the proper officer of that court.”

 11. A  perusal  of  Section  3(2)  shows  that  “suits”  are

understood as actions begun in courts of law established under

the Constitution of India.  

12. In the Schedule, the second division concerns itself with

appeals.  These appeals under Articles 114 to 117, are either

under the Civil Procedure Code, the Criminal Procedure Code,

or intra-court appeals so far as the High Courts are concerned.

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These appeals again are only to “Courts” established under the

Constitution.  

13. Equally,  in  the  third  division,  all  applications  that  are

referred to are under Articles 118 to 137 only to “Courts”, either

under the Civil Procedure Code or under other enactments.  

14. Sections  13,  21  and  Articles  124,  130  and  131  of  the

Limitation  Act  are  again  important  in  understanding  what  is

meant by the expression “Court”. They are set out below:

“13. Exclusion of time in cases where leave to sue  or  appeal  as  a  pauper  is  applied  for.—In computing the period of limitation prescribed for any suit or appeal in any case where an application for leave to sue or appeal as a pauper has been made and rejected,  the  time during  which the applicant has been prosecuting in good faith his application for such leave shall be excluded, and the court may, on payment  of  the court  fees prescribed for  such suit or appeal, treat the suit or appeal as having the same force and effect as if the court fees had been paid in the first instance.

21. Effect of substituting or adding new plaintiff or defendant.—(1) Where after the institution of a suit,  a  new plaintiff  or  defendant  is  substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party:

Provided that where the court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake made in good faith it may direct that the suit as regards such plaintiff or defendant

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shall  be  deemed  to  have  been  instituted  on  any earlier date.

(2)  Nothing  in  sub-section  (1)  shall  apply  to  a case where a party is added or substituted owing to assignment or devolution of any interest during the pendency of  a suit  or where a plaintiff  is  made a defendant or a defendant is made a plaintiff.

Schedule

124. For a review of judgment by a  court  other  than  the Supreme Court.

Thirty days The  date  of  the decree or order.

130. For  leave  to  appeal  as  a pauper --

(a) to the High Court; Sixty days The  date  of decree  appealed from.

(b) to any other court. Thirty days The  date  of decree  appealed from.

131. To any court for the exercise of  its  powers  of  revision under  the  Code  of  Civil Procedure, 1908 (5 of 1908), or  the  Code  of  Criminal Procedure, 1898 (5 of 1898).

Ninety days The  date  of  the decree  or  order or  sentence sought  to  be revised.

It will be seen that suits and appeals that are covered by

the Limitation Act are so covered provided court fees prescribed

for such suits or appeals are paid.  Under Section 13, set out

hereinabove, this becomes clear.  That is why time is excluded

in cases where leave to file a suit or an appeal as a pauper is

granted in the circumstances mentioned in the Section. ‘Courts’

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that  are  mentioned  in  this  Section  are  therefore  courts  as

understood  in  the  strict  sense  of  being  part  of  the  Judicial

Branch of the State.

15. Section  21  also  makes  it  clear  that  the  suit  that  the

Limitation Act speaks of is instituted only by a plaintiff against a

defendant.  Both plaintiff and defendant have been defined as

including persons through whom they derive their right to sue

and include persons whose estate is represented by persons

such  as  executors,  administrators  or  other  representatives.

This again refers only to suits filed in courts as is understood by

the Code of Civil Procedure.  In this regard, Section 26 of the

CPC states:

“Section 26- Institution of suits

(1)Every suit shall be instituted by the  presentation of a plaint or in such other  manner as may be prescribed.

(2) In every plaint, facts shall be proved by  affidavit.”

16. When it  comes to applications,  again Articles 124,  130

and 131 throw a great deal of light.  Only review of judgments

by  a  “court”  is  contemplated  in  the  Third  Division  in  the

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Schedule.  Further, leave to appeal as a pauper again can be

made either to the High Court or only to any other court  vide

Article 130.  And by Article 131, a revision petition filed only

before Courts under the Code of Civil Procedure Code or the

Code of Criminal Procedure are referred to.  On a plain reading

of  the provisions of  the Limitation Act,  it  becomes clear  that

suits, appeals and applications are only to be considered (from

the limitation point of view) if they are filed in courts and not in

quasi-judicial bodies.  

17. Now  to  the  case  law.   A  number  of  decisions  have

established that the Limitation Act applies only to courts and not

to Tribunals. The distinction between courts and quasi-judicial

decisions  is  succinctly  brought  out  in  Bharat  Bank  Ltd.  v.

Employees of  Bharat  Bank Ltd.,  1950 SCR 459.  This  root

authority  has  been  followed  in  a  catena  of  judgments.  This

judgment refers to a decision of the King’s Bench in Cooper v.

Wilson.  The relevant quotation from the said judgment is as

follows:-

“A  true  judicial  decision  presupposes  an  existing dispute  between  two  or  more  parties,  and  then involves four  requisites:  (1)  The  presentation  (not

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necessarily orally) of their case by the parties to the dispute;  (2)  if  the  dispute  between  them  is  a question of  fact,  the ascertainment  of  the fact  by means of evidence adduced by the parties to the dispute and often with the assistance of argument by or on behalf of the parties on the evidence; (3) if the dispute between them is a question of law, the submission of legal argument by the parties, and (4) a decision which disposes of the whole matter by a finding upon the facts in dispute and application of the law of the land to the facts so found, including where required a ruling upon any disputed question of law. A quasi-judicial decision equally presupposes an existing dispute between two or more parties and involves  (1)  and  (2),  but  does  not  necessarily involve (3) and never involves (4). The place of (4) is  in  fact  taken  by  administrative  action,  the character of which is determined by the Minister's free choice.”  

18. Under our constitutional scheme of things, the judiciary is

dealt with in Chapter IV of Part V and Chapter V of Part VI.

Chapter IV of Part V deals with the Supreme Court and Chapter

V of Part VI deals with the High Courts and courts subordinate

thereto.  When the Constitution uses the expression “court”, it

refers to this Court system.  As opposed to this court system is

a  system  of  quasi-judicial  bodies  called  Tribunals.   Thus,

Articles 136 and 227 refer to “courts” as distinct from “tribunals”.

The question in this case is whether the Limitation Act extends

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beyond  the  court  system  mentioned  above  and  embraces

within its scope quasi-judicial bodies as well.  

19. A series of decisions of this Court have clearly held that

the Limitation Act applies only to courts and does not apply to

quasi-judicial  bodies.   Thus,  in  Town  Municipal  Council,

Athani v. Presiding Officer, Labour Court, (1969) 1 SCC 873,

a question arose as to  what  applications are  covered under

Article 137 of the Schedule to the Limitation Act. It was argued

that an application made under the Industrial Disputes Act to a

Labour  Court  was  covered  by  the  said  Article.   This  Court

negatived the said plea in the following terms:-

“12. This  point,  in  our  opinion,  may  be  looked  at from another  angle  also.  When  this  Court  earlier held that all the articles in the third division to the schedule, including Article 181 of the Limitation Act of 1908, governed applications under the Code of Civil  Procedure  only,  it  clearly  implied  that  the applications must be presented to a court governed by  the  Code  of  Civil  Procedure.  Even  the applications  under  the  Arbitration  Act  that  were included within the third division by amendment of Articles 158 and 178 were to be presented to courts whose proceedings were governed by the Code of Civil  Procedure.  As  best,  the  further  amendment now made enlarges the scope of the third division of the  schedule  so  as  also  to  include  some applications  presented  to  courts  governed  by  the Code  of  Criminal  Procedure.  One  factor  at  least

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remains constant  and that  is that  the applications must be to courts to be governed by the articles in this division. The scope of the various articles in this division cannot be held to have been so enlarged as to include within them applications to bodies other than  courts,  such  as  a  quasi  judicial  tribunal,  or even an executive authority. An Industrial  Tribunal or  a  Labour  Court  dealing  with  applications  or references under the Act are not courts and they are in  no  way  governed  either  by  the  Code  of  Civil Procedure or the Code of Criminal Procedure. We cannot, therefore, accept the submission made that this article will  apply even to applications made to an  Industrial  Tribunal  or  a  Labour  Court.  The alterations made in the article and in the new Act cannot, in our opinion, justify the interpretation that even applications presented to bodies,  other  than courts,  are  now  to  be  governed  for  purposes  of limitation by Article 137.”

Similarly, in  Nityananda, M. Joshi & Ors. v. Life Insurance

Corporation & Ors., (1969) 2 SCC 199, this Court followed the

judgment  in  Athani’s case  and turned  down a  plea  that  an

application made to a Labour Court would be covered under

Article 137 of the Limitation Act.  This Court emphatically stated

that Article 137 only contemplates applications to courts in the

following terms:

“3. In  our  view  Article  137  only  contemplates applications to Courts. In the Third Division of the Schedule to the Limitation Act,  1963 all  the other applications  mentioned  in  the  various  articles  are

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applications filed in a court. Further Section 4 of the Limitation Act,  1963,  provides for  the contingency when  the  prescribed  period  for  any  application expires  on  a  holiday  and  the  only  contingency contemplated is “when the court  is closed.”  Again under Section 5 it is only a court which is enabled to admit an application after the prescribed period has expired if the court is satisfied that the applicant had sufficient cause for not preferring the application. It seems to us that the scheme of the Indian Limitation Act is that it only deals with applications to courts, and that the Labour Court is not a court within the Indian Limitation Act, 1963.'”

20. In Kerala State Electricity Board v. T.P. Kunhaliumma,

(1976) 4 SCC 634, a 3-Judge Bench of this Court followed the

aforesaid two judgments and stated:-

“22. The conclusion we reach is that Article 137 of the 1963 Limitation Act will apply to any petition or application filed under any Act to a civil court. With respect  we  differ  from  the  view  taken  by  the two-judge bench of  this  Court  in Athani  Municipal Council case [(1969) 1 SCC 873 : (1970) 1 SCR 51] and hold that Article 137 of the 1963 Limitation Act is not confined to applications contemplated by or under the Code of Civil Procedure. The petition in the  present  case  was  to  the  District  Judge  as  a court.  The  petition  was  one  contemplated  by  the Telegraph Act for judicial decision. The petition is an application falling within the scope of Article 137 of the 1963 Limitation Act.”

This judgment is an authoritative pronouncement by a 3-Judge

Bench that the Limitation Act applies only to courts and not to

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quasi-judicial Tribunals. Athani’s case was dissented from on a

different  proposition  –  that  Article  137  is  not  confined  to

applications under the Code of Civil Procedure alone.  So long

as an application is made under any statute to a Civil  Court,

such application will be covered by Article 137 of the Limitation

Act.  

21. The stage is now set for a decision on which wide ranging

arguments  were  made  by  counsel  on  both  sides.   In

Commissioner of Sales Tax, U.P., Lucknow v. Parson Tools

and Plants, Kanpur, (1975) 4 SCC 22, a 3-Judge Bench was

confronted with whether Section 14 of the Limitation Act applied

to the Sales Tax authorities under the U.P. Sales Tax Act.  In no

uncertain terms, this Court held:-

“8. Mr  Karkhanis  is  right  that  this  matter  is  no longer res Integra. In Shrimati Ujjam Bai v. State of U.P. [AIR  1962  SC  1621  :  (1963)  1  SCR  778] Hidayatullah, J. (as he then was) speaking for the Court, observed:

“The Taxing authorities are instrumentalities of the State. They are not a part of the legislature, nor are they a part of the Judiciary. Their functions are the assessment  and  collection  of  taxes  and  in  the process of assessing taxes, they follow a pattern of action  which  is  considered  judicial.  They  are  not thereby  converted  into  courts  of  civil  judicature.

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They still  remain the instrumentalities of the State and are within the definition of ‘State’ in Article 12.”

9. The  above  observations  were  quoted  with approval  by  this  Court  in Jagannath  Prasad case [AIR 1963 SC 416 : (1963) 2 SCR 850 : 14 STC 536] and it was held that a Sales Tax Officer under  U.P.  Sales  Tax  Act,  1948  was  not a court within  the  meaning  of  Section  195  of  the Code of Criminal Procedure although he is required to  perform  certain  quasi-judicial  functions.  The decision  in Jagannath  Prasad  case it  seems,  was not brought to the notice of the High Court. In view of these pronouncements of this Court, there is no room for argument that the Appellate Authority and the  Judge  (Revisions)  Sales  tax  exercising jurisdiction  under  the  Sales  Tax  Act,  are  “courts”. They are merely Administrative Tribunals and “not courts”.  Section 14, Limitation Act, therefore, does not,  in  terms  apply  to  proceedings  before  such tribunals.”

It  then  went  on  to  discuss  whether  the  general  principle

underlying Section 14 would be applicable and held:-

“12. Three  features  of  the  scheme  of  the  above provision  are  noteworthy.  The first  is  that  no limitation  has  been  prescribed  for  the  suo  motu exercise of its jurisdiction by the revising authority. The second is that the period of one year prescribed as limitation for filing an application for revision by the aggrieved  party  is  unusually  long.  The third is that  the  revising  authority  has  no  discretion  to extend  this  period beyond a  further  period  of  six months, even on sufficient cause shown. As rightly pointed  out  in  the  minority  judgment  of  the  High Court,  pendency  of  proceedings  of  the  nature

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contemplated by Section 14(2) of the Limitation Act, may amount to a sufficient cause for condoning the delay  and  extending  the  limitation  for  filing  a revision  application,  but  Section  10(3-B)  of  the Sales Tax Act  gives no jurisdiction to the revising authority  to  extend  the  limitation,  even  in  such  a case, for a further period of more than six months.

13. The  three  stark  features  of  the  scheme  and language  of  the  above  provision,  unmistakably show that the legislature has deliberately excluded the application of the principles underlying Sections 5 and 14 of the Limitation Act, except to the extent and in the truncated form embodied in sub-section (3-B) of Section 10 of the Sales Tax Act. Delay in disposal  of  revenue matters  adversely  affects  the steady inflow of revenues and the financial stability of  the  State.  Section  10  is  therefore  designed to ensure  speedy  and  final  determination  of  fiscal matters within a reasonably certain time-schedule.

14. It  cannot  be  said  that  by  excluding  the unrestricted application of the principles of Sections 5 and 14 of the Limitation Act,  the legislature has made  the  provisions  of  Section  10  unduly oppressive. In most cases, the discretion to extend limitation,  on  sufficient  cause  being  shown  for  a further  period  of  six  months  only,  given  by sub-section (3-B) would be enough to afford relief. Cases  are  no  doubt  conceivable  where  an aggrieved party, despite sufficient cause, is unable to  make  an  application  for  revision  within  this maximum period of 18 months. Such harsh cases would be rare. Even in such exceptional cases of extreme hardship, the revising authority may, on its own motion, entertain revision and grant relief.”

22. It is clear that this judgment clearly laid down two things –

one that authorities under the Sales Tax Act are not “courts” and

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thus, the Limitation Act will not apply to them. It also laid down

that the language of Section 10 (3-B) of the U.P. Sales Tax Act

made it  clear  that  an unusually  long period of  limitation had

been given for filing a revision application and therefore said

that the said Section as construed by the Court would not be

unduly oppressive. Most cases would, according to the Court,

be filed  within  a maximum period of  18 months but  even in

cases, rare as they are, filed beyond such period, the revising

authority may on its own motion entertain the revision and grant

relief.   Given  the  three  features  of  the  U.P. Sales  Tax  Act

scheme,  the  Court  held  that  the  legislature  deliberately

excluded the application of the principle underlying Section 14

except  to  the  limited  extent  that  it  may  amount  to  sufficient

cause for condoning delay within the period of 18 months.  

23. Close  upon  the  heels  of  this  judgment  comes  another

3-Judge Bench decision under the same provision of the U.P.

Sales  Tax  Act.   In  this  judgment,  another  3-Judge Bench in

C.S.T. v. Madan Lal Das and Sons, 1976 (4) SCC 464, without

adverting to either Parson Tools or the three other judgments

mentioned hereinabove went on to apply Section 12 (2) of the

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Limitation  Act  to  proceedings  under  the  U.P. Sales  Tax  Act.

None of the aforesaid four decisions were pointed out to the

court and it was not argued that the Limitation Act applies only

to courts and not to Sales Tax authorities who are quasi-judicial

Tribunals.  This judgment, therefore, is not an authority for the

proposition that the Limitation Act would apply to Tribunals as

opposed to courts.  Clearly the conclusion reached would be

contrary to four  earlier  decisions three of  which are 3-Judge

Bench decisions.  

24. In fact,  even after this judgment, in  Officer on Special

Duty (Land Acquisition) v. Shah Manilal Chandulal, (1996) 9

SCC 414, this Court held that a Land Acquisition Officer under

the Land Acquisition Act not being a court, the provisions of the

Limitation  Act  would  not  apply.   The  court  concluded,  after

adverting to some of the previous judgments of this Court as

follows:-

“18. Though hard it may be, in view of the specific limitation provided under proviso to Section 18(2) of the  Act,  we  are  of  the  considered  view  that sub-section (2) of Section 29 cannot be applied to the proviso to  sub-section (2)  of  Section 18.  The Collector/LAO,  therefore,  is  not  a  court  when  he acts  as a statutory authority  under  Section 18(1).

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Therefore, Section 5 of the Limitation Act cannot be applied  for  extension  of  the  period  of  limitation prescribed  under  proviso  to  sub-section  (2)  of Section 18. The High Court, therefore, was not right in  its  finding  that  the  Collector  is  a  court  under Section 5 of the Limitation Act.

19. Accordingly, we hold  that  the  applications  are barred by limitation and the Collector has no power to  extend  time  for  making  an  application  under Section 18(1) for reference to the court.”

25. Two other judgments of this Court need to be dealt with at

this  stage.   In  Mukri  Gopalan  v.  Cheppilat  Puthanpurayil

Aboobacker,  (1995) 5 SCC 5, a 2-Judge Bench of this Court

held  that  the  Limitation  Act  would  apply  to  the  appellate

authority constituted under Section 13 of the Kerala Buildings

(Lease  and  Rent  Control)  Act  ,  1965.   This  was  done  by

applying the provision of  Section 29(2)  of  the Limitation Act.

Despite  referring  to  various  earlier  judgments  of  this  Court

which held that the Limitation Act applies only to courts and not

to Tribunals,  this  Court  in  this  case held to the contrary.  In

distinguishing  the  Parson  Tools’  case,  which  is  a  3-Judge

Bench binding on the Court that decided Mukri Gopalan’s case,

the Court held:-

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“If  the  Limitation  Act  does  not  apply  then  neither Section 29(2) nor Section 14(2) of the Limitation Act would apply to proceedings before him. But so far as  this  Court  is  concerned  it  did  not  go  into  the question  whether  Section  29(2)  would  not  get attracted  because  the  U.P. Sales  Tax  Act  Judge (Revisions) was not a court but it took the view that because of the express provision in Section 10(3) (B) applicability  of  Section 14(2)  of  the Sales Tax Act was ruled out. Implicit  in this reasoning is the assumption that but for such an express conflict or contrary intention emanating from Section 10(3)(B) of the U.P. Sales Tax Act which was a special law, Section 29(2) would have brought in Section 14(2) of  the Limitation Act  even for  governing period of limitation for such revision applications. In any case, the scope of Section 29(2) was not considered by the aforesaid decision of the three learned Judges and  consequently  it  cannot  be  held  to  be  an authority  for  the  proposition  that  in  revisional proceedings  before  the  Sales  Tax  authorities functioning  under  the  U.P. Sales  Tax  Act  Section 29(2)  cannot  apply  as  Mr. Nariman would  like  to have it.”

It  then  went  on  to  follow  the  judgment  reported  in  The

Commissioner of Sales Tax, U.P. v. M/s. Madan Lal Das &

Sons, Bareilly, (1976) 4 SCC 464 which, as has been pointed

out  earlier,  is  not  an  authority  for  the  proposition  that  the

Limitation  Act  would  apply  to  Tribunals.  In  fact,  Mukri

Gopalan’s case was distinguished in Om Prakash v. Ashwani

Kumar Bassi,  (2010) 9 SCC 183 at paragraph 22 as follows:

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“22. The decision in Mukri Gopalan case [(1995) 5 SCC  5]  relied  upon  by  Mr  Ujjal  Singh  is distinguishable  from the facts of  this  case.  In  the facts of the said case, it was the District Judges who were  discharging  the  functions  of  the  appellate authority  and  being  a  court,  it  was  held  that  the District Judge, functioning as the appellate authority, was  a  court  and  not persona  designata and  was, therefore,  entitled  to  resort  to  Section  5  of  the Limitation  Act.  That  is  not  so  in  the  instant  case where the Rent Controller  appointed by the State Government  is  a  member  of  the  Punjab  Civil Services  and,  therefore,  a persona  designata who would  not  be  entitled  to  apply  the  provisions  of Section 5 of the Limitation Act, 1963, as in the other case.”

The fact that the District Judge himself also happened to

be the appellate authority under the Rent Act would have been

sufficient on the facts of the case for the Limitation Act to apply

without going into the proposition that the Limitation Act would

apply to tribunals.  

26. Quite apart from Mukri Gopalan’s case being out of step

with at least five earlier binding judgments of this Court, it does

not square also with the subsequent judgment in Consolidated

Engg. Enterprises v. Principal secy., Irrigation Deptt., (2008)

7  SCC 169.   A 3-Judge  Bench  of  this  Court  was  asked  to

decide whether Section 14 of the Limitation Act would apply to

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Section 34(3) of the Arbitration and Conciliation Act, 1996. After

discussing the various provisions of the Arbitration Act and the

Limitation Act, this Court held:

“23. At this stage it would be relevant to ascertain whether there is any express provision in the Act of 1996, which excludes the applicability of Section 14 of the Limitation Act. On review of the provisions of the  Act  of  1996  this  Court  finds  that  there  is  no provision  in  the  said  Act  which  excludes  the applicability of the provisions of Section 14 of the Limitation  Act  to  an  application  submitted  under Section  34  of  the  said  Act.  On  the  contrary,  this Court finds that Section 43 makes the provisions of the  Limitation  Act,  1963  applicable  to  arbitration proceedings. The proceedings under Section 34 are for the purpose of challenging the award whereas the proceeding referred to under Section 43 are the original proceedings which can be equated with a suit in a court. Hence, Section 43 incorporating the Limitation Act  will  apply to the proceedings in the arbitration as it applies to the proceedings of a suit in the court. Sub-section (4) of Section 43, inter alia, provides that where the court orders that an arbitral award  be  set  aside,  the  period  between  the commencement  of  the arbitration and the date of the  order  of  the  court  shall  be  excluded  in computing the time prescribed by the Limitation Act, 1963,  for  the  commencement  of  the  proceedings with  respect  to  the  dispute  so  submitted.  If  the period  between  the  commencement  of  the arbitration proceedings till the award is set aside by the  court,  has  to  be  excluded  in  computing  the period  of  limitation  provided  for  any  proceedings with respect to the dispute, there is no good reason as to why it should not be held that the provisions of Section 14 of the Limitation Act would be applicable

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to an application submitted under Section 34 of the Act of 1996, more particularly where no provision is to be found in the Act of 1996, which excludes the applicability of Section 14 of the Limitation Act, to an application made under Section 34 of the Act. It is to be noticed that the powers under Section 34 of the Act  can  be  exercised  by  the  court  only  if  the aggrieved  party  makes  an  application.  The jurisdiction under Section 34 of the Act, cannot be exercised suo motu. The total period of four months within  which  an  application,  for  setting  aside  an arbitral award, has to be made is not unusually long. Section  34  of  the  Act  of  1996  would  be  unduly oppressive, if it is held that the provisions of Section 14  of  the  Limitation  Act  are  not  applicable  to  it, because cases are no doubt conceivable where an aggrieved party, despite exercise of  due diligence and good faith,  is  unable  to  make an  application within a period of  four months. From the scheme and language of Section 34 of the Act of 1996, the intention  of  the  legislature  to  exclude  the applicability of Section 14 of the Limitation Act is not manifest. It is well to remember that Section 14 of the Limitation Act does not provide for a fresh period of limitation but only provides for the exclusion of a certain  period.  Having  regard  to  the  legislative intent, it will have to be held that the provisions of Section  14  of  the  Limitation  Act,  1963  would  be applicable to an application submitted under Section 34 of the Act of 1996 for setting aside an arbitral award.”

While discussing Parson Tools, this Court held:  

“25……In  appeal,  this  Court  held  that  (1)  if  the legislature in a special statute prescribes a certain period of limitation, then the Tribunal concerned has no  jurisdiction  to  treat  within  limitation,  an application,  by  excluding  the  time  spent  in prosecuting in good faith, on the analogy of Section

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14(2)  of  the  Limitation  Act,  and  (2)  the  appellate authority  and  the  revisional  authority  were  not “courts”  but  were  merely  administrative  tribunals and, therefore, Section 14 of the Limitation Act did not, in terms, apply to the proceedings before such tribunals.

26. From  the  judgment  of  the  Supreme  Court in     CST     [(1975) 4 SCC 22 : 1975 SCC (Tax) 185 : (1975) 3 SCR 743] it is evident that essentially what weighed with the Court in holding that Section 14 of the Limitation Act was not applicable, was that the appellate authority and the revisional authority were not  “courts”. The  stark  features  of  the  revisional powers pointed out by the Court, showed that the legislature had deliberately excluded the application of the principles underlying Sections 5 and 14 of the Limitation Act.  Here in this case, the Court  is not called upon to examine scope of revisional powers. The Court in this case is dealing with Section 34 of the Act  which confers powers on the court  of  the first instance to set aside an award rendered by an arbitrator on specified grounds. It is not the case of the  contractor  that  the  forums  before  which  the Government  of  India  undertaking  had  initiated proceedings for setting aside the arbitral award are not “courts”. In view of these glaring distinguishing features,  this  Court  is  of  the  opinion  that  the decision rendered in CST [(1975) 4 SCC 22 : 1975 SCC (Tax) 185 : (1975) 3 SCR 743] did not decide the issue which falls for consideration of this Court and,  therefore,  the  said  decision  cannot  be construed to mean that the provisions of Section 14 of  the  Limitation  Act  are  not  applicable  to  an application submitted under Section 34 of the Act of 1996.”

In  a  separate  concurring judgment  Justice  Raveendran

specifically held:

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“44. It  may  be  noticed  at  this  juncture  that  the Schedule to the Limitation Act prescribes the period of limitation only to proceedings in courts and not to any  proceeding  before  a  tribunal  or  quasi-judicial authority. Consequently Sections 3 and 29(2) of the Limitation Act will  not apply to proceedings before the tribunal. This means that the Limitation Act will not  apply  to  appeals  or  applications  before  the tribunals, unless expressly provided.

While dealing with Parson Tools, the learned Judge held:

“56. In Parson Tools [(1975)  4 SCC 22]  this  Court did  not  hold  that  Section  14(2)  was  excluded  by reason  of  the  wording  of  Section  10(3-B)  of  the Sales  Tax  Act.  This  Court  was  considering  an appeal  against  the  Full  Bench  decision  of  the Allahabad  High  Court.  Two  Judges  of  the  High Court had held that  the time spent in prosecuting the  application  for  setting  aside  the  order  of dismissal of appeals in default, could be excluded when computing the period of limitation for filing a revision  under  Section  10  of  the  said  Act,  by application of the principle underlying Section 14(2) of the Limitation Act. The minority view of the third Judge  was  that  the  revisional  authority  under Section 10 of the U.P. Sales Tax Act did not act as a court but only as a Revenue Tribunal and therefore the Limitation Act did not apply to the proceedings before  such  Tribunal,  and  consequently,  neither Section 29(2) nor Section 14(2) of the Limitation Act applied.  The  decision  of  the  Full  Bench  was challenged  by  the  Commissioner  of  Sales  Tax before this Court, contending that the Limitation Act did not apply to tribunals, and Section 14(2) of the Limitation  Act  was  excluded  in  principle  or  by analogy.  This  Court  upheld  the  view  that  the Limitation Act did not apply to tribunals, and that as the revisional authority under Section 10 of the U.P. Sales Tax Act was a tribunal and not a court, the

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Limitation Act  was inapplicable. This Court  further held  that  the  period  of  pendency  of  proceedings before the wrong forum could not be excluded while computing  the  period  of  limitation  by  applying Section  14(2)  of  the  Limitation  Act.  This  Court, however,  held  that  by  applying  the  principle underlying  Section  14(2),  the  period  of  pendency before  the  wrong forum may be considered as  a “sufficient cause” for condoning the delay, but then having regard to Section 10(3-B), the extension on that  ground could not  extend beyond six  months. The  observation  that pendency  of  proceedings  of the  nature  contemplated  by  Section  14(2)  of  the Limitation Act, may amount to a sufficient cause for condoning  the  delay  and  extending  the  limitation and  such  extension  cannot  be  for  a  period  in excess of the ceiling period prescribed, is in the light of its finding that Section 14(2) of the Limitation Act was inapplicable to revisions under Section 10(3-B) of  the  U.P.  Sales  Tax  Act.  These  observations cannot be interpreted as laying down a proposition that even where Section 14(2) of the Limitation Act in terms applied and the period spent before wrong forum could therefore be excluded while computing the  period  of  limitation,  the  pendency  before  the wrong  forum  should  be  considered  only  as  a sufficient cause for extension of period of limitation and therefore, subjected to the ceiling relating to the extension  of  the  period  of  limitation.  As  we  are concerned  with  a  proceeding  before  a  court  to which Section 14(2)  of  the Limitation Act  applies, the  decision  in Parson  Tools [(1975)  4  SCC  22  : 1975 SCC (Tax)  185 :  (1975)  3 SCR 743]  which related to a proceeding before a Tribunal to which Section 14(2) of the Limitation Act did not apply, has no application.”  

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27. Obviously, the ratio  of  Mukri  Gopalan does  not  square

with  the  observations  of  the  3-Judge Bench in  Consolidated

Engineering  Enterprises.  In  the  latter  case,  this  Court  has

unequivocally  held  that  Parson  Tools  is  an  authority  for  the

proposition that the Limitation Act will not apply to quasi-judicial

bodies or  Tribunals.   To the extent  that  Mukri  Gopalan is  in

conflict  with  the  judgment  in  the  Consolidated  Engineering

Enterprises case, it is no longer good law.  

28. The sheet anchor in Mukri Gopalan was Section 29(2) of

the Limitation Act.  Section 29(2) states:-

“29. Savings.— (2)  Where any special  or  local  law prescribes for any suit, appeal or application a period of limitation different  from  the  period  prescribed  by  the Schedule, the provisions of Section 3 shall apply as if  such  period  were  the  period  prescribed  by  the Schedule and for  the purpose of  determining any period of limitation prescribed for any suit, appeal or application  by  any  special  or  local  law,  the provisions contained in Sections 4 to 24 (inclusive) shall  apply  only  insofar  as,  and  to  the  extent  to which,  they  are  not  expressly  excluded  by  such special or local law.”

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A bare reading of this Section would show that the special or

local law described therein should prescribe for any suit, appeal

or  application  a  period  of  limitation  different  from the  period

prescribed by the schedule. This would necessarily mean that

such special or local law would have to lay down that the suit,

appeal or application to be instituted under it should be a suit,

appeal or application of the nature described in the schedule.

We have already held that such suits, appeals or applications

as are referred to in the schedule are only to courts and not to

quasi-judicial bodies or Tribunals.  It is clear, therefore, that only

when  a  suit,  appeal  or  application  of  the  description  in  the

schedule is to be filed in a court under a special or local law

that the provision gets attracted.  This is made even clearer by

a reading of Section 29(3).  Section 29(3) states:-

“29. Savings.—  (3) Save as otherwise provided in any law for the time  being  in  force  with  respect  to  marriage  and divorce, nothing in this Act shall apply to any suit or other proceeding under any such law.”

29. When it  comes to the law of marriage and divorce, the

Section speaks not only of suits but other proceedings as well.

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Such  proceedings  may  be  proceedings  which  are  neither

appeals  nor  applications  thus  making  it  clear  that  the  laws

relating to marriage and divorce,  unlike  the law of  limitation,

may  contain  proceedings  other  than  suits,  appeals  or

applications filed in courts.  This again is an important pointer to

the fact that the entirety of the Limitation Act including Section

29(2)  would  apply  only  to  the  three  kinds  of  proceedings

mentioned all of which are to be filed in courts.  

30. It  now  remains  to  consider  the  decision  of  a  2-Judge

Bench reported in P. Sarathy v. State Bank of India, (2000) 5

SCC 355. This judgment has held that an abortive proceeding

before  the appellate  authority  under  Section  41 of  the Tamil

Nadu Shops and Establishment Act would attract the provisions

of Section 14 of the Limitation Act inasmuch as the appellant in

this case had been prosecuting with due diligence another civil

proceeding before the appellate authority under the Tamil Nadu

Shops and Establishment Act, which appeal was dismissed on

the ground that the said Act was not applicable to nationalized

banks  and  that,  therefore,  such  appeal  would  not  be

maintainable.   This  Court  made  a  distinction  between  “Civil

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Court”  and  “court’  and  expanded  the  scope  of  Section  14

stating that any authority or Tribunal having the trappings of a

Court would be a “court” within the meaning of Section 14. It

must  be  remembered  that  the  word  “Court”  refers  only  to  a

proceeding which proves to be abortive.   In  this  context,  for

Section 14 to apply, two conditions have to be met.  First, the

primary proceeding must be a suit, appeal or application filed in

a Civil  Court.   Second, it  is only when it comes to excluding

time in an abortive proceeding that the word “Court” has been

expanded to include proceedings before tribunals.  

31. This judgment is in line with a large number of authorities

which have held that Section 14 should be liberally construed to

advance the cause of justice – see: Shakti Tubes Ltd. v. State

of Bihar,  (2009) 1 SCC 786 and the judgments cited therein.

Obviously, the context of Section 14 would require that the term

“court” be liberally construed to include within it  quasi-judicial

Tribunals as well.   This is for  the very good reason that  the

principle  of  Section  14  is  that  whenever  a  person  bonafide

prosecutes with due diligence another proceeding which proves

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to be abortive because it is without jurisdiction, or otherwise no

decision could be rendered on merits, the time taken in such

proceeding ought to be excluded as otherwise the person who

has  approached  the  Court  in  such  proceeding  would  be

penalized for no fault of his own. This judgment does not further

the case of Shri Viswanathan in any way.  The question that

has to be answered in this case is whether suits, appeals or

applications referred to by the Limitation Act are to be filed in

courts.  This has nothing to do with “civil proceedings” referred

to  in  Section  14  which  may  be  filed  before  other  courts  or

authorities which ultimately do not answer the case before them

on merits but  throw the case out on some technical  ground.

Obviously the word “court” in Section 14 takes its colour from

the preceding words “civil proceedings”.  Civil proceedings are

of many kinds and need not be confined to suits, appeals or

applications which are made only in courts stricto sensu. This is

made even more clear by the explicit language of Section 14 by

which a civil proceeding can even be a revision which may be

to a quasi-judicial tribunal under a particular statute.

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Whether  the  Principle  of  Section  14  would  apply  to  an appeal filed under Section 128 Customs Act.  

“128. Appeals  to  Commissioner  (Appeals).—(1) Any  person  aggrieved  by  any  decision  or  order passed under this Act by an officer of customs lower in  rank  than  a  Commissioner  of  Customs  may appeal to the Commissioner (Appeals) within [sixty days] from the date of the communication to him of such decision or order: [Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient  cause from presenting the appeal  within the  aforesaid  period  of  sixty  days,  allow  it  to  be presented within a further period of thirty days.] [(1-A) The Commissioner (Appeals) may, if sufficient cause  is  shown,  at  any  stage  of  hearing  of  an appeal, grant time, from time to time, to the parties or  any  of  them  and  adjourn  the  hearing  of  the appeal for reasons to be recorded in writing : Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.] (2) Every appeal under this section shall be in such

form and shall be verified in such manner as may be

specified by rules made in this behalf.”

Prior to its amendment in 2001, the said Section read as

under:-

“128. Appeals  to  Collector  (Appeals).—(1)  Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than  a  Collector  of  Customs  may  appeal  to  the Collector  (Appeals)  within three  months  from  the

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date of the communication to him of such decision or order: Provided that the Collector (Appeals) may, if he is satisfied  that  the  appellant  was  prevented  by sufficient  cause from presenting the appeal  within the aforesaid period of three months, allow it to be presented within a further period of three months. (2) Every appeal under this section shall be in such form and shall be verified in such manner as may be specified by rules made in this behalf.”

We have already held that the Limitation Act including Section

14  would  not  apply  to  appeals  filed  before  a  quasi-judicial

Tribunal such as the Collector (Appeals) mentioned in Section

128 of the Customs Act.  However, this does not conclude the

issue.  There is authority for the proposition that even where

Section 14 may not apply, the principles on which Section 14 is

based,  being  principles  which  advance  the  cause  of  justice,

would nevertheless apply.  We must never forget, as stated in

Bhudan Singh & Anr. v. Nabi Bux & Anr., (1970) 2 SCR 10,

that  justice  and  reason  is  at  the  heart  of  all  legislation  by

Parliament.  This was put in very felicitous terms by Hegde,J.

as follows:

“Before considering the meaning of the word "held" in  Section 9, it  is  necessary  to  mention  that  it  is

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proper to assume that the lawmakers who are the representatives of the people enact laws which the society considers as honest, fair and equitable. The object  of  every  legislation  is  to  advance  public welfare. In other words as observed by Crawford in his  book  on  Statutory  Constructions  the  entire legislative process is  influenced by considerations of justice and reason. Justice and reason constitute the great general legislative intent in every piece of legislation.  Consequently  where  the  suggested construction operates harshly, ridiculously or in any other manner contrary to prevailing conceptions of justice and reason, in most instances, it would seem that  the  apparent  or  suggested  meaning  of  the statute,  was  not  the  one  intended  by  the law-makers. In the absence of some other indication that  the  harsh  or  ridiculous  effect  was  actually intended by the legislature, there is little reason to believe that it represents the legislative intent.”

32. This is why the principles of Section 14 were applied in J.

Kumaradasan Nair  v. Iric  Sohan,  (2009)  12 SCC 175 to a

revision application filed before the High Court of Kerala.  The

Court held:

“16. The provisions contained in Sections 5 and 14 of  the Limitation Act  are  meant  for  grant  of  relief where a person has committed some mistake. The provisions of Sections 5 and 14 of the Limitation Act alike  should,  thus,  be  applied  in  a  broad  based manner. When sub-section (2) of Section 14 of the Limitation  Act  per  se  is  not  applicable,  the  same would  not  mean  that  the  principles  akin  thereto would not be applied. Otherwise, the provisions of Section 5 of the Limitation Act would apply. There

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cannot  be  any  doubt  whatsoever  that  the  same would be applicable to a case of this nature.

17. There  cannot  furthermore  be  any  doubt whatsoever  that  having regard to the definition of “suit” as contained in Section 2(l) of the Limitation Act, a revision application will not answer the said description. But, although the provisions of Section 14 of the Limitation Act per se are not applicable, in our  opinion,  the  principles  thereof  would  be applicable for the purpose of condonation of delay in filing an appeal or a revision application in terms of Section 5 thereof.

18. It is also now a well-settled principle of law that mentioning of a wrong provision or non-mentioning of  any  provision  of  law  would,  by  itself,  be  not sufficient to take away the jurisdiction of a court if it is otherwise vested in it in law. While exercising its power, the court will merely consider whether it has the source to exercise such power or not. The court will not apply the beneficent provisions like Sections 5 and 14 of the Limitation Act in a pedantic manner. When the provisions are meant to apply and in fact found  to  be  applicable  to  the  facts  and circumstances of a case, in our opinion, there is no reason as to why the court will refuse to apply the same  only  because  a  wrong  provision  has  been mentioned. In a case of this nature, sub-section (2) of Section 14 of the Limitation Act per se may not be applicable,  but,  as  indicated  hereinbefore,  the principles  thereof  would  be  applicable  for  the purpose of condonation of delay in terms of Section 5 thereof.”

The  Court  further  quoted  from  Consolidated  Engineering

Enterprises an instructive passage:

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“21. In Consolidated  Engg.  Enterprises v.  Irrigation Deptt. [(2008) 7 SCC 169] this Court held: (SCC p. 181, para 22)

“22. The policy of the section is to afford protection to  a  litigant  against  the bar  of  limitation when he institutes  a  proceeding  which  by  reason  of  some technical defect cannot be decided on merits and is dismissed.  While  considering  the  provisions  of Section 14 of  the Limitation Act,  proper  approach will have to be adopted and the provisions will have to  be  interpreted  so  as  to  advance the  cause  of justice rather than abort the proceedings. It will be well to bear in mind that an element of mistake is inherent in the invocation of Section 14. In fact, the section is intended to provide relief against the bar of  limitation  in  cases  of  mistaken  remedy  or selection of a wrong forum. On reading Section 14 of the Act it becomes clear that the legislature has enacted the said section to exempt a certain period covered by a bona fide litigious activity. Upon the words  used  in  the  section,  it  is  not  possible  to sustain  the  interpretation  that  the  principle underlying the said section, namely, that the bar of limitation should not affect a person honestly doing his best to get his case tried on merits but failing because the court is unable to give him such a trial, would not be applicable to an application filed under Section  34  of  the  Act  of  1996.  The  principle  is clearly  applicable  not  only  to  a  case  in  which  a litigant brings his application in the court, that is, a court having no jurisdiction to entertain it  but also where he brings the suit  or  the application in  the wrong court in consequence of bona fide mistake or (sic of) law or defect of procedure. Having regard to the intention of the legislature this Court is of the firm opinion that  the equity  underlying Section 14 should be applied to its fullest extent and time taken diligently  pursuing  a  remedy,  in  a  wrong  court,

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should be excluded. See Shakti Tubes Ltd. v. State of Bihar [(2009) 1 SCC 786].”

33. Various  provisions  of  the  Limitation  Act  are  based  on

advancing the cause of justice.  Section 6 is one such.  It reads

as follows:-

“6. Legal disability.—(1) Where a person entitled to institute a suit or make an application for the execution of a decree is, at the time from which the prescribed period is to be reckoned, a minor or insane, or an idiot, he may institute the suit or make the application within the same period after the disability has ceased, as would otherwise have been allowed from the time specified therefor in the third column of the Schedule.

(2) Where such person is, at the time from which the prescribed period is to be reckoned, affected by two such disabilities, or where, before his disability has ceased, he is affected by another disability, he may institute the suit or make the application within the same period after both disabilities have ceased, as would otherwise have been allowed from the time so specified.

(3) Where the disability continues up to the death of that person, his legal representative may institute the suit or make the application within the same period after the death, as would otherwise have been allowed from the time so specified.

(4) Where the legal representative referred to in sub-section (3) is, at the date of the death of the person whom he represents, affected by any such disability, the rules contained in sub-sections (1) and (2) shall apply.

(5) Where a person under disability dies after the disability ceases but within the period allowed to him under this section, his legal representative may institute the suit or make the

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application within the same period after the death, as would otherwise have been available to that person had he not died.

Explanation.—For the purposes of this section, ‘minor’ includes a child in the womb.”

On the assumption that Section 6 does not apply on the facts of

a given case, can it be said that the principles on which it is

based have  no  application?   Suppose,  in  a  given  case,  the

person entitled to institute a proceeding not governed by the

Limitation Act were a minor, a lunatic or an idiot, would he not

be entitled to institute such proceedings after such disability has

ceased,  for  otherwise  he  would  be  barred  by  the  period  of

limitation contained in the particular statute governing his rights.

This Section again is a pointer to the fact that courts always

lean in favour of advancing the cause of justice where a clear

case is made out for so doing.

34. However, it  remains to consider whether Shri  Sanghi is

right  in  stating that  Section 128 is  a complete code by itself

which necessarily excludes the application of Section 14 of the

Limitation Act.  For this proposition he relied strongly on Parson

Tools which has been discussed hereinabove.  As has already

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been stated, Parson Tools was a judgment which turned on the

three  features  mentioned  in  the  said  case.   Unlike  the  U.P.

Sales Tax Act, there is no provision in the Customs Act which

enables a party to invoke  suo moto the appellate power and

grant relief to a person who institutes an appeal out of time in

an appropriate case.  Also, Section 10 of the U.P. Sales Tax Act

dealt with the filing of a revision petition after a first appeal had

already been rejected, and not to a case of a first appeal as

provided  under  Section  128  of  the  Customs  Act.   Another

feature,  which  is  of  direct  relevance in  this  case,  is  that  for

revision petitions filed under the U.P. Sales Tax Act a sufficiently

long period of 18 months had been given beyond which it was

the policy of the legislature not to extend limitation any further.

This  aspect  of  Parson  Tools  has  been  explained  in

Consolidated  Engineering  in  some  detail  by  both  the  main

judgment  as  well  as  the  concurring  judgment.   In  the  latter

judgment, it has been pointed out that there is a vital distinction

between extending time and condoning delay.  Like Section 34

of  the  Arbitration  Act,  Section  128  of  the  Customs  Act  is  a

Section  which  lays  down  that  delay  cannot  be  condoned

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beyond a certain period.  Like Section 34 of the Arbitration Act,

Section  128  of  the  Customs  Act  does  not  lay  down  a  long

period.  In these circumstances, to infer exclusion of Section 14

or the principles contained in Section 14 would be unduly harsh

and would not advance the cause of justice.  It  must not be

forgotten  as  is  pointed  out  in  the  concurring  judgment  in

Consolidated Engineering that:

“Even when there is cause to apply Section 14, the limitation period continues to be three months and not more, but in computing the limitation period of three months for the application under Section 34(1) of the AC Act, the time during which the applicant was prosecuting such application before the wrong court  is  excluded,  provided the proceeding in  the wrong  court  was  prosecuted  bona  fide,  with  due diligence. Western  Builders [(2006)  6  SCC  239] therefore lays down the correct legal position.”

35. Merely because Parson Tools also dealt with a provision

in a tax statute does not make the ratio of the said decision

apply to a completely differently worded tax statute with a much

shorter period of limitation – Section 128 of the Customs Act.

Also,  the  principle  of  Section  14  would  apply  not  merely  in

condoning  delay  within  the  outer  period  prescribed  for

condonation but would apply de hors such period for the reason

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pointed  out  in  Consolidated  Engineering  above,  being  the

difference  between  exclusion  of  a  certain  period  altogether

under Section 14 principles and condoning delay.  As has been

pointed  out  in  the  said  judgment,  when  a  certain  period  is

excluded by applying the principles  contained in  Section 14,

there  is  no  delay  to  be  attributed  to  the  appellant  and  the

limitation period provided by the concerned statute continues to

be the stated period and not more than the stated period.  We

conclude, therefore, that the principle of Section 14 which is a

principle  based  on  advancing  the  cause  of  justice  would

certainly  apply  to  exclude  time  taken  in  prosecuting

proceedings  which  are  bona  fide  and  with  due  diligence

pursued, which ultimately end without a decision on the merits

of the case.  

36. Shri  Sanghi  also  cited  Ranbaxy  Laboratories  Ltd.  v.

Union of India, (2011) 10 SCC 292. He relied upon paragraph

14 of this judgment which reads as follows:-

“14. It  is  a  well-settled  proposition  of  law  that  a fiscal legislation has to be construed strictly and one has to look merely at what is said in the relevant provision; there is nothing to be read in; nothing to be implied and there is no room for any intendment.

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(See Cape  Brandy  Syndicate v. IRC [(1921)  1  KB 64]  and Ajmera  Housing  Corpn. v.CIT [(2010)  8 SCC 739] .)”.

37. We do not see how this judgment furthers the argument of

Shri Sanghi.  This is only reiteration of the classic statement of

law contained in the Cape Brandy Syndicate case.  Further, the

context  of  this  paragraph is that  a literal  meaning has to be

given to a charging Section in a tax statute.  When it comes to

machinery  provisions  in  tax  statutes  and  provisions  which

provide for appeals and the limitation period within which such

appeals  have  to  be  filed,  it  is  clear  that  the  aforesaid

observations would have no application whatsoever.  

38. Shri  Sanghi  then  referred  us  to  Sree  Balaji  Nagar

Residential Assn. v. State of Tamil Nadu, (2015) 3 SCC 353

and read out paragraphs 10 and 11 from the said judgment.

What was held by this Court in that case was that Section 24(2)

of the Right to Fair Compensation and Transparency in Land

Acquisition, Rehabilitation and Resettlement Act, 2013 does not

exclude any period during which a land acquisition proceeding

which might have remain stayed on account of  an injunction

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granted by any Court.   This  was so held  by contrasting the

language of section 24(2) with the language of Section 19 and

Section 69 of the same Act.  This judgment again would have

no direct bearing on the proposition canvassed by Shri Sanghi

that Section 128 of the Customs Act forms a complete code by

itself.  

What periods are to be excluded under Section 14

39. Shri  Viswanathan, learned senior counsel appearing for

the  appellant,  placed  before  us  a  judgment  of  the  Andhra

Pradesh High Court in which it was held that even prior to the

institution of a particular proceeding, time taken in steps taken

for prosecuting such proceedings should also be excluded.  In

Tirumareddi Rajarao & Ors. v. The State of Andhra Pradesh

& Ors., AIR 1965 A.P. 388, the Andhra Pradesh High Court held

that  the  period  taken  for  preparatory  steps  before  instituting

proceedings should also be excluded.  It said:

“13. We may now turn to the Chambers Twentieth Century  Dictionary  for  the  meanings  of  the expression "to prosecute". It means:

To follow onwards or  pursue in  order  to  reach or accomplish;  to  engage in  practise  to  follow up to

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pursue, chase, to pursue by law; to bring before a Court.

14. These meanings do not vouch the construction of the section advanced by the learned Government Pleader. In our opinion, the section does not render it essential that the prosecution of the proceedings should be continued exclusively in the Court, i.e. the actual proceeding in the Court. There is justification for the view that it is only the actual period between the presentation of a proceedings and the disposal of  that  particular  proceeding  should  be  allowed under  the  sub-section.  The  time  during  which  a party  has  been  taking  the  indispensable  and necessary  steps  preparatory  to  initiate  the proceedings in a court should also be regarded as the time during which he has been prosecuting the civil proceeding.

It  is also to be borne in mind that sub-section (1) makes no  reference  to  the  pendency  of  the  suit, appeal or other proceeding in a Court of law. The legislature had used words of general import and of widest amplitude. So, we do not find any justification for reading a restriction into that sub-section and to hold that the time during which a party was engaged in taking steps for invoking the aid of the Court falls outside  the  contemplation  urged on  behalf  of  the respondents, while the pendency of a proceeding in a Court could be deducted in computing the period of limitation, the time occupied in obtaining certified copies  of  the  judgment  which  is  an  essential requisite for the filing of an appeal or revision in the higher Court has to be disregarded for purposes of S.  14.  We do not  think that  the legislature would have  contemplated  such  a  situation.  It  would certainly result in an anomaly to hold that the time covered by taking the steps absolutely  necessary for  initiating  proceedings  in  a  Court  should  be included in calculating the period of limitation while

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the time during which a former suit  or application was pending in a Court should be excluded. In our considered judgment the section does not make any distinction between the steps which a litigant has to take to initiate proceedings in a Court and the actual pendency of those proceedings in the Court.”

40. In Mst. Duliyabai & Ors. v. Vilayatali & Ors., AIR 1959

MP 271, a Division Bench of the High Court held:-

“What would be the time during which the plaintiff has  been  prosecuting  with  due  diligence  another civil proceeding in a Court of appeal? Certainly the time  requisite  for  obtaining  the  certified  copies under  Section  12  of  the  Limitation  Act  would  be included within the meaning of the section. Also the limitation prescribed for the filing of an appeal would be included, if the appeal be filed on the last day of limitation.

But if the appeal be filed earlier, the time from the date of the order impugned upto the actual date of filing  of  the  appeal  would  certainly  be  the  time during  which  the  plaintiff  can  be  said  to  be prosecuting another  civil  proceeding in  a  court  of appeal. We are unable to endorse the view of the learned trial Judge on this point. A Division Bench of this Court consisting of Sir Gilbert Stone, C. J. and Niyogi,  J.,  in  the  case  of  Kasturchand  v.  Wazir Begum' : (AIR 1937 Nag 1) : ILR (1937) Nag 291, held with reference to Article 11 (1) of the Limitation Act as follows:

"Then it is said that the plaintiff is out of time owing to the operation of Article 11 (1) of the Limitation Act which,  in  the  case  of  a  suit  by  a  person against whom  an  order  is  passed  on  his  objection  in execution  proceedings,  fixes one year. The dates

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are as follows: the objection order was passed on 5-3-1928. The plaint was presented in one Court on 15-9-1928, of course in time. That was returned by that Court on 14-12-1928, for presentation to what that Court held to be the proper Court. The plaintiff challenging the correctness of that order appealed on  6-2-1929  and  the  appeal  was  dismissed  on 2-9-1929, and the plaint was presented to the Court as decided by die first Court, on 25-11-1929. In our opinion the plaintiff has been litigating the matter in a  Court  which  she  bona  fide  believed  to  be  the correct tribunal, believing, to the extent of incurring costs of an appeal against the decision that it was not  the  correct  tribunal,  for  something  like  10 months.

Those  10  months  must  be  taken  into  account  in considering  the  period  that  has  elapsed  between the date of suit and the date when the plaint was eventually filed in the correct Court, and if this is so taken into account the time that has expired is less than a year. The limitation point,  therefore,  in our opinion, fails."

In  the  case  of  Abdul  Sattar  v. Abdul  Husan,  AIR 1936  Cal  400,  the  plaintiffs  had  applied  for execution  of  their  decree.  The  judgment-debtors raised objections to the execution on the ground of adjustment  of  the  decree.  The  question  of adjustment was fought in appeals upto the highest Court. Ultimately it was decided against the plaintiffs by  the  final  appellate  Court.  The  learned  Judges constituting  the  Division  Bench  held  that  the plaintiffs were entitled to exclude the entire period from the date of the order recording the adjustment upto  the  date  of  the  final  order  of  the  highest appellate Court.  We feel  that  this interpretation of Section 14 is in consonance with the wording of the Section.  Therefore,  differing  from the learned trial Judge, we hold that the appellants were entitled to exclude the period from 18-9-1948 to 15-12-1948.”

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41. The language of Section 14, construed in the light of the

object for which the provision has been made, lends itself to

such an interpretation.    The object of Section 14 is that if its

conditions are otherwise met, the plaintiff/applicant should be

put in the same position as he was when he started an abortive

proceeding. What is necessary is the absence of negligence or

inaction.   So  long  as  the  plaintiff  or  applicant  is  bonafide

pursuing a legal remedy which turns out to be abortive, the time

beginning from the date of the cause of action of an appellate

proceeding is to be excluded if  such appellate proceeding is

from  an  order  in  an  original  proceeding  instituted  without

jurisdiction or which has not resulted in an order on the merits

of the case. If this were not so, anomalous results would follow.

Take the case of a plaintiff or applicant who has succeeded at

the first stage of what turns out to be an abortive proceeding.

Assume that, on a given state of facts, a defendant – appellant

or other appellant takes six months more than the prescribed

period  for  filing  an  appeal.  The  delay  in  filing  the  appeal  is

condoned.  Under explanation (b) of Section 14, the plaintiff or

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the applicant resisting such an appeal shall be deemed to be

prosecuting a proceeding.  If the six month period together with

the original  period for filing the appeal is not  to be excluded

under Section 14, the plaintiff/applicant would not get a hearing

on merits for no fault of his, as he in the example given is not

the  appellant.  Clearly  therefore,  in  such  a  case,  the  entire

period of nine months ought to be excluded.  If this is so for an

appellate  proceeding,  it  ought  to  be  so  for  an  original

proceeding as well  with  this  difference  that  the  time already

taken  to  file  the  original  proceeding,  i.e.  the  time  prior  to

institution of the original proceeding cannot be excluded.  Take

a case where the limitation period for the original proceeding is

six months.  The plaintiff/applicant files such a proceeding on

the ninetieth day i.e.  after  three months are over.  The said

proceeding turns out to be abortive after it has gone through a

chequered  career  in  the  appeal  courts.   The  same

plaintiff/applicant now files a fresh proceeding before a court of

first instance having the necessary jurisdiction.  So long as the

said  proceeding  is  filed  within  the  remaining  three  month

period, Section 14 will  apply to exclude the entire time taken

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starting from the ninety first day till the final appeal is ultimately

dismissed.  This example also goes to show that the expression

“the time during which the plaintiff has been prosecuting with

due diligence another civil proceeding” needs to be construed

in a manner which advances the object sought to be achieved,

thereby advancing the cause of justice.

42.  Section 14 has been interpreted by this  Court  extremely

liberally inasmuch as it is a provision which furthers the cause

of justice.  Thus, in Union of India v. West Coast Paper Mills

Ltd., (2004) 3 SCC 458, this Court held:  

“14.  …  In  the  submission  of  the  learned  Senior Counsel, filing of civil  writ petition claiming money relief cannot be said to be a proceeding instituted in good faith and secondly, dismissal of writ petition on the ground that it was not an appropriate remedy for seeking money relief cannot be said to be ‘defect of jurisdiction or other cause of a like nature’ within the meaning of Section 14 of the Limitation Act. It is true that the writ petition was not dismissed by the High Court  on  the  ground  of  defect  of  jurisdiction. However, Section 14 of the Limitation Act is wide in its application, inasmuch as it is not confined in its applicability  only  to  cases of  defect  of  jurisdiction but  it  is  applicable  also to  cases where the  prior proceedings have failed on account of other causes of like nature. The expression ‘other cause of like nature’ came up for the consideration of this Court in Roshanlal  Kuthalia v. R.B.  Mohan  Singh Oberoi[(1975)  4  SCC  628]  and  it  was  held  that

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Section 14 of the Limitation Act is wide enough to cover such cases where the defects are not merely jurisdictional  strictly  so  called  but  others  more  or less  neighbours  to  such  deficiencies.  Any circumstance,  legal  or  factual,  which  inhibits entertainment or consideration by the court  of the dispute on the merits comes within the scope of the section  and  a  liberal  touch  must  inform  the interpretation  of  the  Limitation  Act  which  deprives the remedy of one who has a right.”

Similarly,  in  India  Electric  Works  Ltd. v. James

Mantosh, (1971) 1 SCC 24, this Court held:

“7. It is well settled that although all questions of limitation must be decided by the provisions of the Act and the courts cannot travel beyond them the words  ‘or  other  cause  of  a  like  nature’  must  be construed  liberally.  Some  clue  is  furnished  with regard  to  the  intention  of  the  legislature  by Explanation  III  in  Section  14(2).  Before  the enactment of the Act in 1908, there was a conflict amongst the High Courts on the question whether misjoinder and non-joinder were defects which were covered  by  the  words  ‘or  other  cause  of  a  like nature’.  It  was  to  set  at  rest  this  conflict  that Explanation  III  was  added.  An  extended meaning was  thus  given  to  these  words.  Strictly  speaking misjoinder or non-joinder of parties could hardly be regarded  as  a  defect  of  jurisdiction  or  something similar or analogous to it.”

43. As has been already noticed, Sarathy’s case i.e. (2000) 5

SCC 355 has also held that the court referred to in Section 14

would include a quasi-judicial tribunal.  There appears to be no

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reason for limiting the reach of the expression “prosecuting with

due diligence” to institution of a proceeding alone and not to the

date on which the cause of action for such proceeding might

arise in  the case of  appellate or  revisional  proceedings from

original proceedings which prove to be abortive.  Explanation

(a)  to Section 14 was only meant to clarify that  the day on

which a proceeding is instituted and the day on which it ends

are also to be counted for  the purposes of  Section 14.  This

does not lead to the conclusion that the period from the cause

of action to the institution of such proceeding should be left out.

In fact,  as has been noticed above, the explanation expands

the  scope  of  Section  14  by  liberalizing  it.  Thus,  under

explanation (b) a person resisting an appeal is also deemed to

be prosecuting a proceeding. But for explanation (b), on a literal

reading of Section 14, if a person has won in the first round of

litigation and an appeal is filed by his opponent, the period of

such  appeal  would  not  be  liable  to  be  excluded  under  the

Section, leading to an absurd result.  That is why a plaintiff or

an applicant resisting an appeal filed by a defendant shall also

be deemed to prosecute a proceeding so that the time taken in

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the appeal can also be the subject matter of exclusion under

Section 14. Equally, explanation (c) which deems misjoinder of

parties or a cause of action to be a cause of a like nature with

defect  of  jurisdiction,  expands the  scope of  the  section.  We

have already noticed that the India Electric Works Ltd. judgment

has held that strictly speaking misjoinder of parties or of causes

of action can hardly be regarded as a defect of jurisdiction or

something  similar  to  it.   Therefore  properly  construed,

explanation (a) also confers a benefit and does not by a side

wind  seek  to  take  away  any  other  benefit  that  a  purposive

reading of Section 14 might give.  We, therefore, agree with the

decision  of  the  Madhya Pradesh  High  Court  that  the  period

from  the  cause  of  action  till  the  institution  of  appellate  or

revisional proceedings from original proceedings which prove to

be abortive are also liable to exclusion under the Section. The

view of the Andhra Pradesh High Court is too broadly stated.

The period prior  to institution of  the initiation of  any abortive

proceeding  cannot  be  excluded  for  the  simple  reason  that

Section 14 does not enable a litigant to get a benefit beyond

what is contemplated by the Section - that is to put the litigant in

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the same position as if the abortive proceeding had never taken

place.   

What applies to the facts of this case: the limitation period in Section 128 pre-amendment or post amendment  

44. Shri  A.K.  Sanghi,  learned senior  counsel  appearing  on

behalf of the revenue, has strongly contended before us that

the present appeal must attract the limitation period as on the

date  of  its  filing.   That  being so,  it  is  clear  that  the present

appeal having been filed before CESTAT only on 23.5.2003, it

is Section 128 post amendment that would apply and therefore

the maximum period available to the appellant would be 60 plus

30 days.  Even if time taken in the abortive proceedings is to be

excluded, the appeal filed will be out of time being beyond the

aforesaid period.  

45. It is settled law that periods of limitation are procedural in

nature and would ordinarily  be applied retrospectively.  This,

however, is subject to a rider. In New India Insurance Co. Ltd.

v. Shanti Misra, (1975) 2 SCC 840, this Court held:

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“5. On  the  plain  language  of  Sections  110-A and 110-F there should be no difficulty in taking the view that  the  change  in  law  was  merely  a  change  of forum i.e. a change of adjectival or procedural law and not of substantive law. It is a well-established proposition  that  such  a  change  of  law  operates retrospectively and the person has to go to the new forum even if his cause of action or right of action accrued prior to the change of forum. He will have a vested right of action but not a vested right of forum. If  by  express  words  the  new  forum  is  made available only to causes of action arising after the creation  of  the  forum,  then  the  retrospective operation of the law is taken away. Otherwise the general rule is to make it retrospective.”

46. In answering a question which arose under Section 110A

of the Motor Vehicles Act, this Court held:

“7.....“(1)  Time  for  the  purpose  of  filing  the application  under  Section  110-A  did  not  start running before the constitution of the tribunal. Time had  started  running  for  the  filing  of  the  suit  but before it had expired the forum was changed. And for the purpose of the changed forum, time could not  be  deemed to  have  started  running  before  a remedy  of  going  to  the  new  forum  is  made available.

(2) Even though by and large the law of limitation has  been  held  to  be  a  procedural  law, there  are exceptions  to  this  principle.  Generally  the  law  of limitation  which  is  in  vogue  on  the  date  of  the commencement of the action governs it. But there are certain exceptions to this principle. The new law of limitation providing a longer period cannot revive a dead remedy.  Nor  can it  suddenly  extinguish a

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vested  right  of  action  by  providing  for  a  shorter period of limitation.”

47. This statement of the law was referred to with approval in

Vinod Gurudas Raikar v. National Insurance Co. Ltd., (1991)

4 SCC 333 as follows:-

“7. It is true that the appellant earlier could file an application  even  more  than  six  months  after  the expiry  of  the  period  of  limitation,  but  can  this  be treated  to  be  a  right  which  the  appellant  had acquired. The answer is in the negative. The claim to compensation which the appellant was entitled to, by reason of the accident was certainly enforceable as  a  right.  So  far  the  period  of  limitation  for commencing a legal proceeding is concerned, it is adjectival in nature, and has to be governed by the new Act — subject to two conditions. If  under the repealing Act the remedy suddenly stands barred as a result of a shorter period of limitation, the same cannot be held to govern the case, otherwise the result  will  be  to  deprive  the  suitor  of  an  accrued right.  The  second  exception  is  where  the  new enactment  leaves  the  claimant  with  such  a  short period for commencing the legal proceeding so as to make it unpractical for him to avail of the remedy. This  principle  has  been followed by  this  Court  in many cases and by way of illustration we would like to  mention New  India  Insurance  Co.  Ltd. v.Smt Shanti  Misra [(1975)  2  SCC 840  :  (1976)  2  SCR 266] . The husband of the respondent in that case died in an accident in 1966. A period of two years was available to the respondent for instituting a suit for recovery of damages. In March, 1967 the Claims Tribunal  under  Section 110 of  the Motor  Vehicles Act, 1939 was constituted, barring the jurisdiction of

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the civil court and prescribed 60 days as the period of limitation. The respondent filed the application in July, 1967. It was held that not having filed a suit before  March,  1967  the  only  remedy  of  the respondent was by way of an application before the Tribunal.  So  far  the  period  of  limitation  was concerned,  it  was  observed  that  a  new  law  of limitation  providing  for  a  shorter  period  cannot certainly extinguish a vested right of action. In view of  the  change  of  the  law  it  was  held  that  the application could be filed within a reasonable time after the constitution of the Tribunal; and, that the time of about four months taken by the respondent in  approaching  the  Tribunal  after  its  constitution, could be held to be either reasonable time or the delay  of  about  two  months  could  be  condoned under the proviso to Section 110-A(3).”  

Both these judgments were referred to and followed in

Union  of  India v.  Harnam  Singh,  (1993)  2  SCC  162,  see

paragraph 12.  

48. The aforesaid principle is also contained in Section 30(a)

of the Limitation Act, 1963.  

“30. Provision  for  suits,  etc.,  for  which  the prescribed  period  is  shorter  than  the  period prescribed by the Indian Limitation Act, 1908.— Notwithstanding anything contained in this Act,— (a)  any  suit  for  which  the  period  of  limitation  is shorter  than the period of  limitation prescribed by the Indian Limitation Act,  1908,  may be instituted within  a  period  of [seven  years]  next  after  the commencement  of  this  Act  or  within  the  period

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prescribed for such suit by the Indian Limitation Act, 1908, whichever period expires earlier:”

49. The  reason  for  the  said  principle  is  not  far  to  seek.

Though periods of limitation,  being procedural law, are to be

applied retrospectively, yet  if  a  shorter  period  of  limitation is

provided by a later amendment to a statute,  such period would

render  the  vested  right  of  action  contained  in  the  statute

nugatory as such right of action would now become time barred

under the amended provision.  

50. This  aspect  of  the  matter  is  brought  out  rather  well  in

Thirumalai Chemicals Ltd. v. Union of India,  (2011) 6 SCC

739 as follows:

“22. Law is well settled that the manner in which the appeal has to be filed, its form and the period within which  the  same  has  to  be  filed  are  matters  of procedure, while the right conferred on a party to file an appeal  is  a substantive right.  The question is, while dealing with a belated appeal under Section 19(2) of FEMA, the application for  condonation of delay has to be dealt with under the first proviso to sub-section (2) of Section 52 of FERA or under the proviso to sub-section (2) of Section 19 of FEMA. For  answering  that  question  it  is  necessary  to examine the law on the point.

Substantive and procedural law

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23. Substantive law refers to a body of  rules that creates, defines and regulates rights and liabilities. Right  conferred  on  a  party  to  prefer  an  appeal against an order is a substantive right conferred by a statute which remains unaffected by subsequent changes  in  law,  unless  modified  expressly  or  by necessary implication. Procedural law establishes a mechanism  for  determining  those  rights  and liabilities and a machinery for enforcing them. Right of  appeal  being  a  substantive  right  always  acts prospectively.  It  is  trite  law  that  every  statute  is prospective unless it  is expressly or by necessary implication made to have retrospective operation.

24. Right of appeal may be a substantive right but the  procedure  for  filing  the  appeal  including  the period of limitation cannot be called a substantive right,  and  an  aggrieved  person  cannot  claim  any vested right claiming that he should be governed by the old provision pertaining to period of  limitation. Procedural  law  is  retrospective  meaning  thereby that it will apply even to acts or transactions under the repealed Act.

25. Law on the subject  has also been elaborately dealt  with  by  this  Court  in  various  decisions  and reference may be made to a few of those decisions. This  Court  in Garikapati  Veeraya v. N.  Subbiah Choudhry [AIR 1957 SC 540] , New India Insurance Co.  Ltd. v. Shanti  Misra [(1975)  2  SCC  840],  Hitendra  Vishnu  Thakur  v.  State  of Maharashtra [(1994) 4 SCC 602 : 1994 SCC (Cri) 1087]  , Maharaja  Chintamani  Saran  Nath Shahdeo v. State  of  Bihar [(1999)  8  SCC  16] and Shyam  Sunder v. Ram  Kumar [(2001)  8  SCC 24] , has elaborately discussed the scope and ambit of  an  amending  legislation  and  its  retrospectivity and  held  that  every  litigant  has  a  vested  right  in substantive  law  but  no  such  right  exists  in procedural  law. This  Court  has  held  that  the  law relating  to  forum  and  limitation  is  procedural  in

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nature whereas law relating to right of appeal even though remedial is substantive in nature.

26. Therefore,  unless  the  language  used  plainly manifests  in  express  terms  or  by  necessary implication a contrary intention a statute divesting vested rights is to be construed as prospective, a statute  merely  procedural  is  to  be  construed  as retrospective and a statute which while procedural in its character, affects vested rights adversely is to be construed as prospective.”

51. This  judgment  was  strongly  relied  upon  by  Shri  A.K.

Sanghi for the proposition that the law in force on the date of

the institution of an appeal, irrespective of the date of accrual of

the cause of action for filing an appeal, will govern the period of

limitation.  Ordinarily, this may well be the case. As has been

noticed above, periods of limitation being procedural in nature

would apply retrospectively.  On the facts in the judgment in the

Thirumalai case,  it  was  held  that  the  repealed  provision

contained  in  the  Foreign  Exchange  Regulation  Act,  namely,

Section  52  would  not  apply  to  an  appeal  filed  long  after

1.6.2000 when the Foreign Exchange Management Act came

into force, repealing the Foreign Exchange Regulation Act.  It is

significant  to  note  that  Section  52(2)  of  the  repealed  Act

provided a period of limitation of 45 plus 45 days and no more

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whereas Section 19(2) of FEMA provided for 45 days with no

cap thereafter  provided  sufficient  cause  to  condone delay  is

shown.   On  facts,  in  that  case,  the  appeal  was  held  to  be

properly instituted under Section 19, which as has been stated

earlier, had no cap to condonation of delay.  It was, therefore,

held that the Appellate Tribunal in that case could entertain the

appeal even after the period of 90 days had expired provided

sufficient cause for the delay was made out.  

52. The present  case stands on a slightly  different  footing.

The abortive appeal had been filed against orders passed in

March- April, 1992.  The present appeal was filed under Section

128,  which  Section  continues  on  the  statute  book  till  date.

Before its amendment in 2001, it provided a maximum period of

180 days within which an appeal could be filed. Time began to

run on 3.4.1992 under Section 128 pre amendment when the

appellant received the order of the Superintendent of Customs

intimating it about an order passed by the Collector of Customs

on 25.3.1992.  Under Section 128 as it  then stood a person

aggrieved by a decision or order passed by a Superintendent of

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Customs could appeal to the Collector (Appeals) within three

months from the date of communication to him of such decision

or  order.   On  the  principles  contained  in  Section  14  of  the

Limitation  Act  the  time  taken  in  prosecuting  an  abortive

proceeding would have to be excluded as the appellant  was

prosecuting  bona  fide  with  due  diligence  the  appeal  before

CEGAT  which  was  allowed  in  its  favour  by  CEGAT  on

23.6.1998.  The Department preferred an appeal against  the

said  order  sometime  in  the  year  2000  which  appeal  was

decided in their favour by this court only on 12.3.2003 by which

CEGAT’s order was set aside on the ground that CEGAT had

no jurisdiction to entertain such appeal.  The time taken from

12.3.2003 to 23.5.2003, on which date the present appeal was

filed before the Commissioner (Appeals)  would be within the

period of 180 days provided by the pre amended Section 128,

when  added  to  the  time  taken  between  3.4.1992  and

22.6.1992.  The amended Section 128 has now reduced this

period, with effect from 2001, to 60 days plus 30 days, which is

90 days.  The order that is challenged in the present case was

passed before 2001.  The right of appeal within a period of 180

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days (which includes the discretionary period of 90 days) from

the  date  of  the  said  order  was  a  right  which  vested  in  the

appellant. A shadow was cast by the abortive appeal from 1992

right upto 2003.  This shadow was lifted when it became clear

that the proceeding filed in1992 was a proceeding before the

wrong forum.  The vested right of appeal within the period of

180 days had not yet got over.  Upon the lifting of the shadow, a

certain residuary period within which a proper appeal could be

filed still remained.  That period would continue to be within the

period of  180 days notwithstanding the amendment  made in

2001 as otherwise the right to appeal itself would vanish given

the shorter  period of  limitation provided by Section 128 after

2001.  

53.  We,  therefore,  set  aside  the  order  dated  25.2.2004  and

remand  the  case  to  CESTAT for  a  decision  on  merits.  The

appeal is allowed in the aforesaid terms.  There will be no order

as to costs.  

…..………………J. (A.K. Sikri)

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…..………………J. (R.F. Nariman)

New Delhi; April 23, 2015.                                                                           

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