{"id":303835,"date":"2023-10-06T15:00:34","date_gmt":"2023-10-06T09:30:34","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=303835"},"modified":"2023-10-06T14:43:42","modified_gmt":"2023-10-06T09:13:42","slug":"covid-19-limitation-period-suspension-included-outer-limit-of-period-condone-delay-supreme-court","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2023\/10\/06\/covid-19-limitation-period-suspension-included-outer-limit-of-period-condone-delay-supreme-court\/","title":{"rendered":"COVID-19 Limitation Period Suspension included outer limit of period to condone delay: Supreme Court"},"content":{"rendered":"
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Supreme Court:<\/span> In appeals challenging Calcutta High Court’s dismissal of applications seeking to allow filing of written statements beyond 30 days, restricting benefit of Cognizance for Extension of Limitation, In re<\/span>, (2020) 19 SCC 10<\/a> and Sagufa Ahmed<\/span> v. Upper Assam Plywood Products (P) Ltd.<\/span>, (2021) 2 SCC 317<\/a>, since the limitation period for filing written statements expired on 8-03-2020, the Division Bench of J.K. Maheshwari and K.V. Viswanathan*<\/span>, JJ. allowed the same clarifying that the suspension of limitation during further orders passed after COVID-19 lockdown was for outer limit and included period for condonation of delay.<\/p>\n

Factual Background<\/h2>\n

On 30-08-2019, IL and FS Financial Services Limited (the plaintiff) filed a suit for recovery of money and other consequential reliefs before Calcutta High Court against 9 defendants, who were appellants in the instant matter. Summons were served on the defendants on 7-02-2020 and the 30-day period for filing written statements expired on 8-03-2020, followed by expiry of 90 days’ period for condonation of delay on 6-06-2020. On 20-01-2021, the appellants filed applications praying for acceptance of written statements by extending the time stating delay due to lockdown after COVID-19 pandemic w.e.f. 23-03-2020, when their office was completely closed.<\/p>\n

The appellants mainly averred that the further period of 90 days had not expired on the date of imposition of lockdown as on 23-03-2020. The High Court accepted the plaintiff’s stand that the limitation had expired prior to 15-03-2020 and refused to take the written statements on record.<\/p>\n

Court’s Analysis of COVID-19 Limitation Period Suspension<\/h2>\n

The Court started with citing the fundamental legal maxim “Vigilantibus non dormientibus jura subveniunt”<\/span> which meant “the law assists those who are vigilant, not those who sleep over their rights”. The Court was of the view that “When the whole world was in the grip of devastating pandemic, it could never have been said that the parties were sleeping over their rights.” So was the mindset when the Court took suo motu cognizance in Cognizance for Extension of Limitation, In re<\/span>, (2020) 19 SCC 10<\/a> and passed orders dated 23-03-2020, 6-05-2020, 10-07-2020, 8-03-2021, 27-04-2021 and 23-09-2021 under Article 142<\/a> of Constitution of India<\/a> to extend the deadlines thereby protecting the rights of parties and ensuring that their remedies and defenses were not barred.<\/p>\n

The Court pointed towards the contrast between orders passed in and beyond Sagufa Ahmed<\/span> v. Upper Assam Plywood Products (P) Ltd.<\/span>, (2021) 2 SCC 317<\/a>. It clarified that the order in Sagufa Ahmed (supra) was pronounced on 18-09-2020 when the orders of 23-03-2020, 06-05-2020 and 10-07-2020 were in vogue. The Court cited the order dated 6-05-2020 directed extension of limitation prescribed under the Arbitration & Conciliation Act, 1996<\/a> (‘A&C Act’) and Section 138<\/a> of the Negotiable Instruments Act, 1881<\/a> (‘NI Act’) w.e.f. 15-03-2020, which also provided that in case the limitation expired after 15-03-2020, the period between 15-03-2020 and lifting of lockdown in the jurisdictional area would be extended for a period of 15 days after the lifting of lockdown. Then on 10-07-2020, the Court extended the orders dated 23-03-2020 and 6-05-2020 to Section 29A and 23(4) of A&C Act providing timelines for completion of statement of claim and defense, and also extended time under Section 12-A<\/a> of the Commercial Courts Act, 2015<\/a> prescribing time limit for completing process for compulsory pre-litigation, mediation and settlement.<\/p>\n

The Court highlighted that the subject of order dated 23-03-2020 remained the same, i.e., the period of limitation, as was held in Sagufa Ahmed<\/span> (supra). It also pointed towards the contrasting order dated 8-03-2021 putting an end to the extension of limitation, and roughly excluding the period between 15-03-2021 till 14-03-2021, and the balance to be available w.e.f. 15-03-2021 for 90 days. It specifically excluded the period prescribed under Sections 23(4) and 29-A of A&C Act, Section 12-A<\/a> of the Commercial Courts Act, 2015<\/a> and Section 138 provisos (b) and (c) of NI Act and any other laws prescribing limitation for institution and termination of proceedings.<\/p>\n

The Court explained that the very basis of decision in Sagufa Ahmed<\/span> (supra) which only extended the period of limitation and not the period up to which delay could be condoned, was taken away by expanding the protection by excluding the period even for computing outer limits within which the court or tribunal can condone delay. The Court regarded the same as an important subsequent aspect having great bearing in deciding the controversy in the instant matter.<\/p>\n

The Court pointed towards Prakash Corporates<\/span> v. Dee Vee Projects Ltd.<\/span>, (2022) 5 SCC 112<\/a> which also noticed the fact that order dated 8-03-2021 and subsequent orders by three-Judge Bench were not and could not have been available for the Bench deciding Sagufa Ahmed case<\/span> which was decided on 18-09-2020. In the said judgment, the 30 days’ period for filing written statements expired on 05-02-2021 and the 120-day outer limit expired on 06-05-2021, written statements notarized on 07-07-2021 were directed to be taken on record.<\/p>\n

The Court threw light on Section 16 of the Commercial Courts Act which came into force on 23-10-2015 and led to amendment of certain provisions of the Code of Civil Procedure, 1908<\/a> (‘CPC’) regarding application to commercial disputes, and the Schedule amended Order 5 Rule 1(1), Order 8 Rule 1<\/a> and Order 8 Rule 10<\/a> of CPC<\/a> regarding their applicability to commercial disputes. It thereby concluded that the outer limit for condonation of delay by the Court or Tribunal was 120 days from the date of summons.<\/p>\n

In the instant matter, summons were served on 7-02-2020, the 30 days’ period expired on 8-03-2020 and outer limit expired on 6-06-2020, application for taking on record the written statements and the extension of time was filed on 20-01-2021. The Court stated that excluding the stipulated time as per order dated 8-03-2021, the applications filed by the applicants on 19-01-2021 were well within time.<\/p>\n

Therefore, the Court set aside the impugned judgment of the High Court extending benefit of Orders dated 8-03-2021, 27-04-2021 and 23-09-2021 in Cognizance for Extension of Limitation<\/span> (supra) to the appellants. It further directed their written statements to be taken on record.<\/p>\n

[Aditya Khaitan v. IL & FS Financial Services Ltd., 2023 SCC OnLine SC 1241<\/a>, decided on 3-10-2023<\/span>]<\/p>\n

Judgment authored by: Justice K.V. Viswanathan<\/span><\/strong><\/p>\n

Know Thy Newly Appointed Supreme Court Judge: Justice K.V. Viswanathan<\/a><\/p><\/blockquote>\n