- Bookmark
- Share
- CaseIQ
Liquidator, Warangal... v. Appellate Authority ...
Structured Summary of the Opinion (Chalmaeswar, J.)
Factual and Procedural Background
Respondents Nos. 3 to 15 filed applications under Section 10(1) of the Payment of Gratuity Act before the second respondent claiming gratuity arising from the closure of the Warangal District Co-operative Marketing Society Limited, which was closed on October 1, 1987. The second respondent allowed the claims by orders dated August 17, 1990 and October 1, 1990 in separate applications concerning respondents Nos. 2 to 15.
The petitioner, aggrieved by the second respondent's orders, preferred appeals to the first respondent under Section 7(7) of the Payment of Gratuity Act, 1972. The appellate authority recorded a finding that the appeals were preferred after the lapse of 120 days. Because the appeals were beyond the statutory period, the petitioner sought condonation of delay by invoking Section 5 of the Limitation Act, 1963. The appellate authority refused to condone the delay by a common order dated July 17, 1991, holding that it would not invoke Section 5 of the Limitation Act in proceedings under Section 7(7) of the Payment of Gratuity Act. The petitioner filed the present writ petition challenging that refusal.
Legal Issues Presented
- Whether the appellate authority constituted under Section 7(7) of the Payment of Gratuity Act can invoke Section 5 of the Limitation Act, 1963 to condone delay in preferring an appeal beyond the statutory period.
- Whether the appellate authority under the Payment of Gratuity Act is to be regarded as a "Court" for purposes of invoking Section 5 of the Limitation Act (the opinion assumes that question in the petitioner's favour for argument's sake but does not decide it).
- More generally, whether the provisions of the Limitation Act, 1963 (notably Section 5 and Section 29(2)) apply when a special enactment prescribes its own period of limitation and a mechanism for extension.
Arguments of the Parties
Petitioner's Arguments
- The appellate authority under Section 7(7) of the Payment of Gratuity Act is a Court and therefore is entitled to exercise the power to condone delay under Section 5 of the Limitation Act, 1963.
- Reliance was placed on the Supreme Court judgment in Sahkari Ganna Vikas Samiti Ltd. v. Mahabir Sugar Mills (P.) Ltd. to support the contention that the appellate authority is a Court for this purpose.
- The petitioner also relied on the Supreme Court decision in Shantilal M. Bhayani v. Shanti Bai (1995 Suppl (4) SCC 578) to contend that where a special enactment does not expressly exclude the Limitation Act, Section 5 remains applicable and can be invoked in proceedings under the Payment of Gratuity Act.
Respondents' Arguments
This opinion does not contain a detailed account of the respondents' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Sahkari Ganna Vikas Samiti Ltd. v. Mahabir Sugar Mills (P.) Ltd. | Relied upon by petitioner to support the proposition that the appellate authority under the relevant statute is a Court and may exercise powers analogous to those available to Courts under the Limitation Act. | The court records that learned counsel relied on this Supreme Court judgment but does not base its decision on it; it is noted as part of the petitioner's submissions. |
| Shantilal M. Bhayani v. Shanti Bai, 1995 Suppl (4) SCC 578 | Holds that where a special or local law prescribes a period of limitation and does not expressly exclude the application of provisions of the Limitation Act, an appellate authority may invoke Section 5 of the Limitation Act to condone delay (as in the context of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960). | The court discusses and distinguishes this decision: it recognises Shantilal as authority for the principle but construes it as being applied in the context of a special law enacted prior to the Limitation Act. The court holds that Shantilal must be understood in that historical context and thus is not directly controlling here. |
| City College, Calcutta v. State of West Bengal, 1987 I LLJ 41 (Calcutta High Court, Division Bench) | Dealt with an identical situation and held that the appellate authority under the Payment of Gratuity Act could not condone delay beyond 120 days on the ground that it is not a Court. | The court notes this Division Bench decision but expressly states it will not examine afresh whether the appellate authority is a Court. The City College decision is referenced as dealing with an identical situation and supporting the conclusion that condonation beyond 120 days was not permissible on that ground. |
Court's Reasoning and Analysis
The court's analysis follows the statutory scheme and the interaction between the Payment of Gratuity Act (a special enactment) and the Limitation Act, 1963:
- The court sets out Section 7(7) of the Payment of Gratuity Act: an appeal must be preferred within sixty days from receipt of the order, and the appellate authority may, if satisfied of sufficient cause, extend that period by a further sixty days (i.e. a maximum of 120 days).
- Because the appeals were preferred beyond the prescribed period, the petitioner sought condonation under Section 5 of the Limitation Act. The appellate authority refused, taking the view that it should not invoke Section 5 in proceedings under Section 7(7) of the Payment of Gratuity Act.
- The court notes that it will assume, for the purposes of argument, that the appellate authority is a "Court" and thus that Section 5 could in principle be available if not otherwise excluded; however, the court observes that this presumption alone does not resolve the core question.
- The court examines Section 29(2) of the Limitation Act, which provides that where a special or local law prescribes a period of limitation different from the Schedule, Section 3 applies and Sections 4 to 24 apply only insofar as they are not expressly excluded by that special law. The court explains that this provision governs the interaction between special enactments and the Limitation Act.
- The court considers the Supreme Court's decision in Shantilal M. Bhayani v. Shanti Bai, which applied Section 5 of the Limitation Act in the context of a special enactment (the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960) that pre-dated the Limitation Act. The present court emphasises that Shantilal must be read in the context of special laws enacted prior to the Limitation Act.
- The court then applies the settled rule of statutory interpretation that where there are two inconsistent parliamentary mandates, the later enactment prevails. The Payment of Gratuity Act was enacted in 1972, while the Limitation Act is of 1963. However, the decisive point for the court is that the Payment of Gratuity Act itself prescribes a specific limitation mechanism: 60 days with a statutory proviso allowing the appellate authority to extend by a further 60 days — a specific, self-contained regime for extension up to 120 days.
- Because Parliament, in the later statute (Payment of Gratuity Act, 1972), prescribed a specific period and a limited mechanism for extension, the court views that scheme as controlling the question of condonation in appeals under that Act. The presence of an express and limited extension mechanism in the Payment of Gratuity Act means that invoking Section 5 of the Limitation Act to go beyond that statutory scheme would not be appropriate.
- The court therefore concludes that the appellate authority acted properly in refusing to condone the delay beyond the period permitted by Section 7(7) of the Payment of Gratuity Act.
Holding and Implications
Holding: The writ petition is dismissed. The court held that it would not interfere with the appellate authority's decision refusing to condone the delay in preferring the appeals; the appellate authority "rightly refused to condone the delay."
Implications:
- Direct effect on the parties: The appellate authority's refusal to condone the delay in the appeals was upheld and the writ petition challenging that refusal was dismissed. The court awarded no costs.
- Broader or precedential effect: The court emphasised that where a statute prescribes a specific limitation period and a specific, limited power of extension (as Section 7(7) does), that statutory scheme governs whether delay may be condoned. The opinion distinguishes prior Supreme Court authority applied to special laws enacted before the Limitation Act and therefore does not extend an undifferentiated rule enabling Section 5 to bypass a later special statute's limitation mechanism. The court did not purport to lay down any novel general rule beyond this interpretation and did not state that it was creating a new precedent beyond its holding in these proceedings.
Order: The writ petition is dismissed. No costs.
Chalmaeswar, J.
1. Respondents Nos. 3 to 15 herein filed an application under Section 10(1) of the Payment of Gratuity Act before the second respondent herein claiming certain amounts towards gratuity payable by the said applicants on account of closure of an establishment known as Warangal District Co- operative Marketing Society Limited. The said establishment was admittedly closed on October 1, 1987. The second respondent on consideration of the material before him allowed the claim of respondents Nos. 2 to 15 herein by two separate orders dated August 17, 1990, and October 1, 1990, respectively in different applications filed by respondents No. 2 to 15 herein. The further details of which may not be necessary.
2. Aggrieved by the decision of the second respondent, the petitioner herein preferred appeals to the first respondent herein under Section 7(7) of the Payment of Gratuity Act, 1972. Though it is not clear from the record as to the date of the presentation of the above mentioned appeals by the petitioner herein, the appellate authority, as a matter of fact, recorded a finding that the appeals were preferred after the lapse of 120 days.
3. Under Section 7(7) of the Payment of Gratuity Act, the normal period of limitation for preferring an appeal, passed by the primary authority, under Section 7, Sub-section (4) is 60 days from the date of the receipt of the order. However, the appellate authority is empowered to extend the said period of limitation by another 60 days if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days. In fact the relevant portion of Sub-section (7) reads as follows:
"Any person aggrieved by an order under Sub-section (4), within sixty days from the date of the receipt of the order, prefer an appeal to the appropriate Government or such other authority as may be specified by the appropriate Government in this behalf:
Provided that the appropriate Government or the appellate authority, as the case may be, may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period by a further period of sixty days."
4. As the appeals were preferred beyond the period of limitation, prescribed under the Act, the petitioner herein, it appears, filed an application seeking the condonation of delay invoking Section 5 of the Limitation Act, 1963. The appellate authority declined to condone the delay by a common order passed in all the above mentioned appeals dated July 17, 1991, holding that the appellate authority acting under Section 7(7) of the Payment of Gratuity Act would not invoke under Section 5 of the Limitation Act, 1963. Challenging the same, the present writ petition is filed.
5. Learned counsel for the petitioner argued that the appellate authority acting under Section 7(7)'of the Payment of Gratuity Act is a Court and, therefore, entitled to exercise the power to condone the delay as provided under Section 5 of the Limitation Act, 1963. For this purpose, learned counsel relied on a judgment of the Supreme Court in Sahkari Ganna Vikas Samiti Ltd. v. Mahabir Sugar Mills (P.) Ltd. .
6. Secondly, learned counsel submitted that in view of the judgment of the Supreme Court in Shantilal M. Bhayani v. Shanti Bai. 1995 Suppl (4) SCC 578 as there is no provision under the Payment of Gratuity Act, which excludes, the application of the provisions of the limitation act to the proceedings under the Payment of Gratuity Act, Section 5 of the Limitation Act is still applicable to the proceedings under the Payment of Gratuity Act.
7. For the purpose of the present case, I do not propose to go into the question whether the appellate authority constituted under the Payment of Gratuity Act, 1972, is a Court and, therefore, Section 5 of the Limitation Act applies to such an authority. I shall presume for the purpose of this case that such an authority is a Court, but in my view, the presumption would not automatically solve the problem.
8. The question would be whether the special period of limitation is prescribed under any particular enactment for regulating the proceedings under the said enactment?
Whether the provisions of the Limitation Act, 1963, could still be invoked while dealing with the proceedings under the said special enactment?
9. Looking at the scheme of the Limitation Act, Section 3 of the Act declares that every suit instituted, appeal preferred and application made after the period prescribed for such institution, preference, etc., shall be dismissed. However, Section 5 stipulates that any appeal" or application, except the application under Order 21 of the Code of Civil Procedure, if filed beyond the period of limitation prescribed under the Limitation Act could still be admitted by the Court, if the Court is satisfied that such an appellant or applicant had sufficient cause for not preferring the appeal or not making the application within the prescribed period of limitation. From the above two Sections, it appears that a suit filed beyond the prescribed period of limitation is absolutely barred, but an appeal preferred beyond the period of limitation prescribed could still be considered if the appellate Court is satisfied that such delay is by virtue of a cause which was not within the control of the appellant. Section 29(2) of the Limitation Act reads as follows:
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 in so far as, and to the extent to which, they are not expressly excluded by such special or local law."
An analysis of the above sub-section shows that where a special period of limitation different from the one prescribed in the Schedule to the Limitation Act, 1963, is prescribed by any special or local law for the purpose of filing the suit, appeal, or application, the bar contained under Section 3 shall apply and such a suit or application is required to be dismissed as if that such a special limitation is prescribed under the Schedule to the Limitation Act. It is further provided in the sub-section that provisions contained in Sections 4 to 24 of the Limitation Act shall apply to the cases where a special limitation is prescribed as mentioned above, to the extent to which they have not expressly excluded by such special local law. Interpreting the scope of Section 29(2), the Supreme Court in Shantilal M. Bhayani v. Shanti Bai., (supra), held that as there was no specific exclusion of application of the Limitation Act in the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, the appellate authority under the Act was entitled to invoke the powers under Section 5 of the Limitation Act and condone the delay in preferring the appeal under the said Act, though the said appeal was preferred beyond the period of special limitation prescribed under the Tamil Nadu Buildings (Lease and Rent Control) Act. Obviously, their Lordships while deciding the case had in mind the last clause of Section 29 of Sub-section (2) ... ''they are not expressly excluded..."
10. Sovereign Legislature (Parliament) is competent to create such legal fictious as the one created under Section 29(2) of the Limitation Act and also competent to prescribe the limitation of such fictions.
11. However, the difficulty in this case is that the limitation prescribed under the Payment of Gratuity Act, once again an enactment made by Parliament is only 60 days for the purpose of preferring an appeal. Under the proviso to Section 7, Sub-section (7), the appellate authority is empowered to "extend the period" of limitation by another sixty days. In other words, the appellate authority is empowered to condone the delay to upper limit of another sixty days beyond the prescribed period of limitation. No doubt, the Payment of Gratuity Act does not expressly exclude the operation of the Limitation Act, but the fact remains that the Payment of Gratuity Act is of the year 1972 where the Limitation Act is of the year 1963. The settled principle of interpretation of statutes is that if there are two mandates by the Sovereign Legislature, the later of the two shall prevail. Therefore, the fact that there was no express exclusion of Section 5 of the limitation under the Payment of Gratuity Act makes no difference while construing the scope of the power of the appellate authority constituted under the Payment of Gratuity Act, to condone the delay in preferring the appeals. The legal position enunciated by the Supreme Court in Shantilal M. Bhayani v. Shanti Bai. (supra), in my view, must be understood in the context of the Limitation Act, 1963, and the special period of limitation, prescribed in any other special or local law prior to the date of the enactment of the Limitation Act. It is worthwhile mentioning that that the Tamil Nadu Buildings (Lease and Rent Control) Act, which is the subject matter of the issue before the Supreme Court in the above case was of the year 1960.
12. In view of my conclusion on this, I do not wish to examine the question whether the appellate authority under the Payment of Gratuity Act is a Court or not though a Division Bench of the Calcutta High Court in a decision in City College. Calcutta v. State of West Bengal 1987-I-LLJ-41, dealing with the identical situation held that the appellate authority under the Payment of Gratuity Act could not condone the delay beyond 120 days on the ground it is not a Court.
13. In the circumstances, I do not see any reason to interfere with the impugned order. The appellate authority, in my view, rightly refused to condone the delay.
14. The writ petition is, therefore, dismissed. No costs.
Alert