Commercial Courts Act Is Entity-Neutral In Terms Of Limitation; Govt Suffers Same Pitfalls As Private Entity: Telangana High Court

Factual Matrix:

The Telangana State Industrial Development Corporation Limited (“TSIDCL”) had filed a Commercial Original Petition (“COM") u/s 31(1)(a) and (aa) of the State Financial Corporations Act 1951, for a decree against the Respondent for an amount of ₹1.30 crore with 17.5% interest p.a. The learned Commercial Court vide order dated 16.02.2023 dismissed the COM. TSIDCL then challenged the impugned order and decree vide the present appeal, which was filed on 26.12.2024. The present appeal was accompanied by an application for a delay of 514 days.

The appellant had file two affidavits in support of the application for condonation of delay citing the Deputy General Manager of the appellant, took a lot of time to go through an understand the impugned order; officials of the appellant-Corporation being busy with the election duties; officials not issuing instructions concerning the legal matter; the case file was lost, and it took a considerable amount of time to locate as reasons attributable to the delay of filing the appeal u/s 13(1A) of the Commercial Courts Act, 2015.

Analysis of the Court:

The bench at the outset observed that the appellant in the affidavits failed to explain the lapse of four months between 07.06.2023 and 09.10.2023. In light of respondent no. 1 demanding the return of the original Title Deeds of the scheduled property, TSIDCL realised that they had not made any decision concerning the impugned order. Furthermore, no explanation is given for the lapse of six months from November 2023 to May 2024, and it was in the second week of December 2024 that the present appeal was filed.

The appellant relies upon Section 5 of the Limitation Act 1963, which allows the filing of an appeal beyond the prescribed period of time, subject to the Court's satisfaction. However, the burden of proving the sufficiency of the cause lies with the appellant or applicant. In Government of Maharashtra (Water Resources Department) v. Borse Brothers Engineers and Contractors Private Limited, there was a delay of 131 days beyond the 60 days period u/s 13(1A) of the Commercial Courts Act, 2015. The Supreme Court observed that the delay in filing the appeal was not explained with sufficient bona-fide, and accordingly dismissed the appeal.

Furthermore, the Supreme Court in Borse observed that the limitation beyond 60 days cannot be stretched to an unreasonable period of time, as it would defeat the object of the Act. Appellant's failure to account for the delay in the manner prescribed u/s 5 of the Limitation Act is the reason for not condoning the delay. The extension of the limitation period beyond the prescribed time-frame is a matter of policy; 'sufficient cause' cannot be used as an excuse to forgo the unexplained delays.

The bench observed that in order to exercise their discretionary power u/s 5 of the Limitation Act, sufficiency of cause should be shown to the Court. 'Sufficient' cause must reflect a sense of purpose and a willingness to restore diligence. The appellant only provided sporadic dates in the timeline from February 2023 to December 2024, with no explanation for the long blanks in between these dates.

In light of the appellant's failure to satisfy the Court to exercise its discretionary power to condone the delay u/s 5 of the Limitation Act, the bench refused to condone the delay of 514 days in filing the Commercial Court Appeal.

Case Name: M/s. Telangana State Industrial Development Corporation Limited v. Mark Raj Kumar

Case Title: I.A.No.1 OF 2025 IN/AND COMCA No.1 of 2025

Counsel for the Appellant: Mr. Shyam S.Agrawal, Advocate

Counsel for the Respondent: Mr. Ashish Kale, Advocate