The Telangana High Court Friday dismissed an appeal filed by the Telangana State Industrial Development Corporation (TSIDC) against an order of a commercial court, citing an “unexplained” and “unreasonable” delay of 514 days in filing the plea.
The bench of Justice Moushumi Bhattacharya and Justice BR Madhusudhan Rao was hearing an appeal filed by TSIDC challenging a commercial court order dated February 16, 2023, which dismissed its appeal seeking a decree of over Rs 1.3 crore with an annual interest at 17.5 per cent against the respondents. The appeal was filed on December 26, 2024, accompanied by an application for condonation of the significant delay of 514 days.
The high court’s rejection of TSIDC’s appeal means that the original claim of Rs 1,30,31,000, with interest, which was already dismissed by the commercial court, remains dismissed.
During the proceedings, the TSIDC filed two affidavits citing the delay and attributed it to several factors such as long time taken to understand the impugned order, officials being occupied with the state and Union election duties leading to a halt in decision-making on legal matters, the file going untraceable, and a change in leadership with three vice chairpersons and managing cirectors taking charge in quick succession.
However, the bench found that “the dates mentioned in the two affidavits contain several unexplained time-gaps..” Specifically, it found a four-month gap between the day the certified copy of the order was ready and the day when the Telangana Assembly elections were announced.
Similarly, it found another six-month gap between the polling dates of the Telangana elections and the general elections, for which no explanation was provided. The court also observed that the TSIDC only realised the matter was pending in November 2024 when respondent No. 1 sought the return of original title deeds. This prompted the search for the missing file that was eventually traced in the second week of December 2024. The appeal was filed on December 26, 2024.
While TSIDC relied on section 5 of The Limitation Act, 1963, which allows filing of an appeal or any application beyond the prescribed period of time subject to the court being satisfied of the sufficiency of cause shown by the appellant or applicant for the delay, the bench noted that “the burden of proving the sufficiency of cause lies with the appellant or applicant.”
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Referring to various Supreme Court judgments, the high court reiterated that delay beyond the prescribed period, particularly in matters under the Commercial Courts Act, 2015, should be condoned by way of exception, not as a rule. “There is little doubt that the objective of a special statute like The Commercial Courts Act, 2015, is to ensure speedy resolution of high-value commercial disputes, without any exceptions. The focus is on quick resolution which includes government entities when they are parties to commercial disputes,” the order read. The judgment firmly stated that the “law of limitation binds everybody, including the government”.
Noting that the exercise of discretion under section 5 of The Limitation Act, 1963, empowers the court to entertain an appeal or application beyond the prescribed period of limitation subject to the court being satisfied of the sufficiency of cause shown by the applicant/appellant, the court observed, “Sufficient cause must reflect a sense of purpose and a willingness to restore diligence. The reasons shown cannot be slipshod or nonchalant so as to demand condonation as a matter of entitlement. It must be borne in mind that delay may have created equity in favour of another in the interregnum.”
The bench also noted that one of the grounds for the original impugned order against TSIDC was that its claim was already barred by limitation. “Thus, it is all the more difficult to accept that the appellant would slip into a slumber for 514 days after having suffered an order, inter alia, on the ground of delay,” the court noted. Finding no satisfactory reason to condone the 514-day delay, the high court dismissed TSIDC’s application for condonation of delay, consequently rejecting the commercial court appeal.
