Whether appeal which is dismissed as barred by limitation is decree under section 2 (2) of Code of civil procedure, 1908?


Question of Law
An Appeal fled along-with an Application for condoning the delay in filing that Appeal when dismissed on the refusal to condone the delay is nevertheless a decision in the Appeal, held Supreme Court in Shyam Sunder Sarma Vs. Pannalal Jaiswal, (2005) 1 SCC 436 ; AIR 2005 SC 226.

Legal Provisions
A decree is defined in Section 2 (2) of the Code of Civil Procedure, 1908 as under;
Decree means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within Section 144 but shall not include;

• (a) any adjudication from which an appeal lies as an appeal from an order;
• (b) any order of dismissal for default;

Explanation; A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely dispose of the suit. It may be partly preliminary and partly final.

The provisions of Rule 3-A of Order 41 CPC introduced by the Amendment Act 104 of 1976 was brought into force on the basis of the 14th & 27th Reports of the Law Commission.

In its 27th Report, the Law Commission recommended as under:

In the Fourteenth Report, attention was drawn to the practice which was previously followed of admitting an Appeal subject to objections as to limitations being raised at the time of hearing, where, the Memorandum of Appeal was accompanied by a Petition seeking condonation of delay under Section 5 of Limitation Act, 1963.

This practice has been disapproved by the Privy Council, which has stressed the expediency of adopting a procedure securing at the stage of admission the final determination (after due notice) of question of limitation affecting the competence of the Appeal. Following this advice, the High Courts of Andhra Pradesh, Bombay and Madras have made appropriate amendments to the Rule, and the Fourteenth Report recommended that similar amendments be made by other High Courts.

The proposed amendment carries out this recommendation, and follows the Madras Amendment, Order XLI, Rule 1 (3) with verbal modifications. The Bombay amendment is contained in Order XLI, Rule 3-A (Bombay).

The provision was accordingly introduced by the Amendment Act with a view to secure at the stage of admission of the Appeal a final determination on the question of limitation. R 3-A of Order 41 CPC reads as under:

1. When an appeal is presented after the expiry of the period of limitation specified therefor, it shall be accompanied by an application supported by affidavit setting forth the facts on which the appellant relies to satisfy the Court that he had sufficient cause for not preferring the Appeal within such period.
   
2. If the Court sees no reason to reject the Application without the issue of a notice to the respondent, notice thereof shall be issued to the respondent and the matter shall be finally decided by the Court before it proceeds to deal with the Appeal under Rule 11 or Rule 13, as the case may be.
   
3. Where an Application has been made under Sub-rule (1), the Court shall not make an order for the stay of execution of the decree against which the Appeal is proposed to be filed so long as the Court does not, after hearing under Rule 11, decide to hear the Appeal.

It is clear from Sub-rule (1) that there is a proper presentation of the Appeal filed out of time if it is accompanied by the Application to condone delay supported by an affidavit setting forth the grounds for the condonation of delay. Sub-rule (2) requires the Application to be finally decided by the Court before it proceeds to deal with the Appeal under Rule 11 or Rule 13, as the case may be. A dismissal of the Application for condonation of delay results in the dismissal of the Appeal which can only be under Rule 11.

Section 3 of the Limitation Act also requires an Appeal filed after the prescribed period of time to be dismissed subject to the provisions contained in Sections 4 to 24. Sub-rule (3) of Rule 3-A does not render an Appeal properly presented under Sub-rule (1), a proposed Appeal. Sub-rule (3) in spite of its language would only mean that no stay of the execution of the decree appealed against shall be granted before the Court after hearing the Appeal under Rule 11 decides to admit the same. An Appeal presented out of time is nevertheless an appeal in the eye of law for all practical purposes (Vide Musala Annaji Rao Vs Bogarapu Papaiah Setty, AIR 1975 Andh Pradesh 73).

The question, Whether an Appeal properly presented with a Petition to condone the delay can be admitted or not, is at the second stage and to reach that stage the Application has to be disposed of finally.

Section 3 of the Limitation Act also makes it obligatory on the part of the Court to dismiss an Appeal presented out of time subject, of course, to the provisions of Sections 4 to 24. In a case, where an Appeal has been admitted and then dismissed on a preliminary objection raised at the hearing disclosing the fact that the Appeal was filed out of time, is it possible to say that the order dismissing the Appeal, though on the ground of limitation, is not a decree?

The question is:
Whether a dismissal of the Appeal after considering an Application to condone the delay should be treated differently?
An appeal filed out of time is required to be dealt with by the Appellate Court under Section 3 of the Limitation Act and an order dismissing the Appeal is a decree that can be subject of a second appeal as held by the Full Bench in Haji Hassan Rowthers case (AIR 1972 Ker 56). Sub-rule (4) of Rule 11 of Order 41, CPC requires an Appellate Court, not being the High Court, dismissing an Appeal under Sub-rule (1) to deliver a judgment and a decree is to be drawn up in accordance with the judgment.

It is thus clear that the dismissal of an Appeal under Order 41, Rule 11 postulates the drawing up of a decree which can be the subject of a further Appeal under Order 41, Rule 1 read with Order 42, CPC. Sub-rule(4) of Rule 11 does not dispense with the need of a decree when the High Court dismisses an Appeal under Sub-rule (1). The only exception is that it need not deliver a judgment recording its reasons for dismissing the same.

Reverting to the facts as projected in Appeal (Civil) No. 5550/2014 titled Shyam Sunder Sarma Vs. Pannalal Jaiswal, the Respondent No.1 therein filed Title Suit No.89 of 1992 on the file of the Munsifs Court at Howrah against the Appellant & Ors., for a declaration of his title as a Thika Tenant in respect of the Schedule Property & for other consequential reliefs. The Appellant - defendant No.1 in the Suit, entered appearance and contested the Suit and the Application for Interim Injunction filed by the Plaintiff.

The Application for Interim Injunction was heard and the same was dismissed by the Trial Court. The Plaintiff filed an Appeal against that Order under Order XLIII Rule 1 of the Code of Civil Procedure, 1908 (for short the Code) and that Appeal was also dismissed by the District Judge on 16.03.1994.

The Suit itself stood posted to 08.10.1996. The Appellant the first defendant, did not appear. The evidence of the Plaintiff was recorded. On 09.10.1996 the Plaintiff filed two applications (a) One for an amendment of the Plaint and (b) the other for certain corrections in the Plaint. Those Applications were allowed the same day in the absence of any opposition. In view of his absence, the first defendant, the Appellant, was set ex parte and on 11.10.1996, the Suit was decreed ex parte.

On 16.11.1996, the first defendant, the Appellant, filed a Petition under Order IX Rule 13 of the Code of Civil Procedure accompanied by an Application under Section 5 of the Limitation Act for condoning the delay in filing the Petition for setting aside the ex parte decree.

Both the Applications were opposed by the Plaintiff. On 21.11.1996, the first defendant the Appellant, also filed an Appeal, Title Appeal No. 157 of 1996, against the ex parte decree along with an Application for condoning the delay in filing that Appeal as enjoined by Order XLI Rule 3-A of the Code of Civil Procedure and invoking Section 5 of the Limitation Act.

On 17.09.1998, the Trial Court allowed the Application filed by the first defendant under Section 5 of the Limitation Act and condoned the delay in filing the Petition under Order IX Rule 13 of the Code of Civil Procedure. The Plaintiff challenged that Order in the District Court in Revision, but the Revision Petition was dismissed on 11.08.2000. There was a further Revision to the High Court which was dismissed on 14.09.2000.

On 21.01.2000, since the first defendant the Appellant, did not appear to prosecute his Application under Section 5 of the Limitation Act in Title Appeal No. 157 of 1996, his Appeal against the ex parte decree, the District Court dismissed that Application for non taking of steps, resulting in default. On 06.03.2000, in view of the non-appearance of the first defendant the Appellant, Title Appeal No. 157 of 1996 against the ex parte decree itself was dismissed for default. In other words, both the Application under Section 5 of the Act for condoning the delay in filing that Appeal and the Appeal against the ex parte decree filed by the first defendant stood dismissed for default.

In the Trial Court, the Petition for setting aside the ex parte decree filed under Order IX Rule 13 of the Code of Civil Procedure came up for hearing. On behalf of the Plaintiff, an objection was raised that in view of the filing of Title Appeal No. 157 of 1996 by the first defendant against the ex parte decree and in view of the explanation to Order IX Rule 13 of the Code of Civil Procedure, the Application under Order IX Rule 13 of the Code could not be entertained by the Court which had passed the ex parte decree.

On behalf of the first defendant the Appellant, it was contended that since the Appeal filed by the Appellant against the ex parte decree was dismissed for default as a consequence of the dismissal of the Application for condoning the delay in filing that Appeal being dismissed for default, the explanation created no bar to the entertaining of the Petition under Order IX Rule 13 of the Code of Civil Procedure, especially in the context of the fact that the delay in filing that Petition had already been condoned by the Trial Court and affirmed up to the High Court.

But, the Trial Court took the view that since the Appeal against the ex parte decree filed by the first defendant was not withdrawn, the Petition under Order IX Rule 13 of the Code of Civil Procedure could not be entertained or relief granted to the first defendant in view of the explanation to Order IX Rule 13 of the Code of Civil Procedure. Thus, the Petition for setting aside the ex parte decree was dismissed.

The first defendant challenged that decision in an Appeal under Order XLIII Rule 1 of the Code. The Lower Appellate Court agreed with the conclusion of the Trial Court that the explanation to Order IX Rule 13 of the Code precluded the Court from exercising its power to set aside the ex parte decree. Thus, the Appeal was dismissed. The first defendant challenged the same in a proceeding before the High Court under Article 227 of the Constitution of India.

The High Court held that the question posed for decision was covered by decisions of this Court referred to by it in its order and in the light of those decisions the Order of the Trial Court as affirmed by the District Court, could not be interfered with. The High Court, thus, dismissed the Petition filed by the first defendant under Article 227 of the Constitution of India. The first defendant has challenged this order of the High Court in this Appeal (Civil) No. 5550/2014 titled Sham Sunder Sarma Vs Pannalal Jaiswal.

The question as to:
Whether an Appeal accompanied by an Application for condoning the delay in filing the Appeal, is an Appeal in the eye of law, when the Application for condoning the delay in filing the Appeal is dismissed and consequently the Appeal is dismissed as being time barred by limitation, in view of Section 3 of the Limitation Act?.

There was conflict of views on this question before the High Courts.

But the Privy Council in Nagendra Nath Dey Vs. Suresh Chander Dey (59 Indian Appeals 283) held;

there is no definition of appeal in the Civil Procedure Code, but their Lordships have no doubt that any application by a party to an Appellate Court, asking it to set aside or revise a decision of a Subordinate Court, is an Appeal within the ordinary acceptation of the term and that it is no less an Appeal because it is irregular or incompetent.

These observations were referred to with approval by Supreme Court in Raja Kulkarni & Ors. Vs State of Bombay, (1954 SCR 384).

The specific question involved, came to be considered by Supreme Court in M/S Mela Ram & Sons Vs Commissioner of Income Tax, Punjab, (1956 SCR 166). The Supreme Court held that an Appeal presented out of time is an Appeal and an Order dismissing it as time barred is one passed in an Appeal. The Supreme Court referred to and followed the view taken by the Privy Council and by its earlier two respective decisions above referred to.

The Supreme Court quoted with approval the observations of Chagla C. J. in K. K. Porbunderwalla Vs Commissioner of Income Tax, (1952) 21 ITR 63 to the following effect:
.. Although the Appellate Assistant Commissioner did not hear the Appeal on merits and held that the Appeal was barred by limitation his Order was under Section 31 and the effect of that Order was to confirm the assessment which had been made by the Income Tax Officer.

In Sheodan Singh Vs. Daryao Kunwar, (AIR 1966 SC 1332) rendered by four learned Judges of Supreme Court, one of the questions that arose was as to Whether the dismissal of an Appeal from a decree on the ground that the Appeal was barred by limitation was a decision in the Appeal.

The Supreme Court held:
We are therefore of opinion that where a decision is given on the merits by the Trial Court and the matter is taken in Appeal and the Appeal is dismissed on some preliminary ground like limitation or default in printing, it must be held that such dismissal when it confirms the decision of the Trial Court on the merits, itself amounts to the Appeal being heard and finally decided on the merits, whatever, may be the ground for dismissal of the Appeal.

In Board of Revenue Vs M/S Raj Brothers Agencies etc., [1973 (3) SCR 492 ], the Supreme Court approved the decision of the Madras High Court which had applied the principle stated in M/S Mela Ram & Sons (supra).

The question was considered in extenso by a Full Bench of the Kerala High Court in Thambi Vs. Mathew, [1987 (2) KLT 848]. Therein, after referring to the relevant decisions on the question it was held that an Appeal presented out of time was nevertheless an Appeal in the eye of law for all purposes and an Order dismissing the Appeal was a decree that could be the subject of a Second Appeal.

It was also held that Rule 3-A of Order XLI introduced by Amendment Act, 104 of 1976 to the Code of Civil Procedure, 1908 did not in any way affect that principle. An Appeal registered under Rule 9 of Order XLI of the Code of Civil Procedure had to be disposed of according to law and a dismissal of an Appeal for the reason of delay in its presentation, after the dismissal of an Application for condoning the delay, is in substance and effect a confirmation of the decree appealed against. Thus, the position that emerges on a survey of the authorities is that an Appeal filed along with an Application for condoning the delay in filing that Appeal when dismissed on the refusal to condone the delay is nevertheless a decision in the Appeal.

The Supreme Court in Shyam Sunder Sarma Vs. Pannalal Jaiswal (supra) while considering the decision laid down in Ratansingh Vs Vijaysingh & Ors., [(2001) 1 SCC 469 ] rendered by two Learned Judges holding therein that dismissal of an application for condonation of delay would not amount to a decree and, therefore, dismissal of an Appeal as time barred was also not a decree, held that:

12........the decision was rendered in the context of Article 136 of the Limitation Act, 1963 and in the light of the departure made from the previous position obtaining under Article 182 of the Limitation Act, 1908. But we must point out with respect that the decisions of this Court in M/S Mela Ram & Sons (supra) were not brought to the notice of their Lordships.

The principle laid down by a Three Judge Bench of this Court in M/S Mela Ram & Sons (supra) and that stated in Sheodan Singh (supra) was, thus, not noticed and the view expressed by the Two Judge Bench, cannot be accepted as laying down the correct law on the question. Of course, their Lordships have stated that they were aware that some decisions of the High Courts have taken the view that even rejecting an Appeal on the ground that it was presented out of time is a decree within the definition of a decree obtaining in the Code of Civil Procedure, 1908. Thereafter noticing the decision of the Calcutta High Court above referred to, their Lordships in conclusion apparently agree with the decision of the Calcutta High Court.

Though the decision of the Privy Council in Nagendra Nath Dey Vs. Suresh Chander Dey (supra) was referred to, it was not applied on the ground that it was based on Article 182 of the Limitation Act, 1908, and there was a departure in the legal position in view of Article 136 of the Limitation Act, 1963. But with respect, we must point out that the decision really conflicts with the ratio of the decision in M/S Mela Ram & Sons (supra) and Sheodan Singh (supra) and another decision of this Court rendered by two Learned Judges in Rani Choudhary Vs Lt. Col. Suraj Jit Choudhary [(1982) 2 SCC 596].

In Essar Constructions Vs N. P. Rama Krishna Reddy [(2000) 6 SCC 94) brought to our notice two other learned Judges of this Court, left open the question. Hence, reliance placed on that decision is of no avail to the Appellant.

Dismissal of an appeal on the ground of limitation was thus held as amounting to a confirmation of the decree of the Trial Court on the merits of the case. Thus the decree of the Trial Court gets merged in the Appellate Courts decree even when the Appeal is dismissed on a preliminary ground or as time-barred. The logical sequitur of the analysis is that an Appeal filed along-with an Application for condonation of delay in filing that Appeal when dismissed on refusal to condone the delay is a decree within the meaning of Section 2 (2) of the Code of Civil Procedure, 1908.

Written By: Dinesh Singh Chauhan, Advocate - High Court of Judicature, J&K, Jammu.
Email: [email protected], [email protected]