Page 1 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

1

Page 2 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:

2

Page 3 “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

2

nd

April, 1992 in respect of vessel M.V. “Olinda”. Of

course the order dated 2

nd

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

3

Page 4 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)

4

Page 5 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

5

Page 6 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

6

Page 7 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.

7

Page 8 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

8

Page 9 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;

9

Page 10 (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

10

Page 11 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

11

Page 12 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,—

12

Page 13 (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

13

Page 14 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.

14

Page 15 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

15

Page 16 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 daysThe 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 daysThe 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 daysThe 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’

16

Page 17 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

17

Page 18 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

18

Page 19 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

19

Page 20 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

20

Page 21 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

21

Page 22 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

22

Page 23 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.

23

Page 24 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

24

Page 25 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

25

Page 26 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

26

Page 27 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).

27

Page 28 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:-

28

Page 29 “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:

29

Page 30 “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

30

Page 31 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

31

Page 32 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

32

Page 33 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:

33

Page 34 “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

34

Page 35 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.”

35

Page 36 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.”

36

Page 37 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.

37

Page 38 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

38

Page 39 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

39

Page 40 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.

40

Page 41 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

41

Page 42 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

42

Page 43 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

43

Page 44 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:

44

Page 45 “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,

45

Page 46 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

46

Page 47 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

47

Page 48 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

48

Page 49 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

49

Page 50 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.

50

Page 51 (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

51

Page 52 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

52

Page 53 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

53

Page 54 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

54

Page 55 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.”

55

Page 56 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

56

Page 57 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

57

Page 58 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

58

Page 59 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

59

Page 60 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

60

Page 61 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

61

Page 62 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:

62

Page 63 “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

63

Page 64 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

64

Page 65 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

65

Page 66 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

66

Page 67 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

67

Page 68 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

68

Page 69 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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Page 70 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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Page 71 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)

71

Page 72 …..………………J.

(R.F. Nariman)

New Delhi;

April 23, 2015.

72