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2014 Supreme(Del) 2014
High Court of Delhi
SANJIV KHANNA & V. KAMESWAR RAO, JJ.
M/s. Andhra Cement Ltd.
Versus
Dy. Commissioner Central Excise, Guntur
Writ Petition (Civil) No. 7304 of 2011
Decided on: 01-09-2014
For the Petitioner:Maneesha Dhir, Geeta Sharma, Ujjwal Jain, Sadvi Shahi, Advocates.
For the Respondent: Satish Kumar, Sr. Standing Counsel.
The main legal point established in the judgment is the determination of the starting point of limitation for challenging an order, the importance of proper communication and service of orders, and the consequences of not adhering to the time schedule.
Headnote:
Condonation of Delay - Industrial and Financial Reconstruction - Sick Industrial Companies (Special Provisions) Act, 1985 - Section 15(1) - Section 25 - Regulation 15 - [SUMMARY OF ACT SECTIONS] - The court discussed the starting point of limitation for challenging an order, violation of principles of natural justice, and the requirements of Regulation 15. The court also highlighted the importance of knowledge in construing limitation and the consequences of lackadaisical approach. The decision emphasized the need for proper communication and service of orders and the consequences of not adhering to the time schedule.
Fact of the Case:
The petitioner challenged an order passed by the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) regarding the condonation of delay in challenging an order passed by the Board for Industrial and Financial Reconstruction (BIFR). The petitioner argued that the starting point of limitation should be the date when the respondent received a copy of the order from the BIFR. The respondent had applied for a certified copy of the order after a considerable delay, which the petitioner contended should be a factor in determining the starting point of limitation.
Finding of the Court:
The court found that there was a violation of principles of natural justice as the order directing complete waiver of interest and penalty was passed without hearing the respondent-Revenue. The court also noted that the BIFR did not supply a certified copy of the order to the respondent-Revenue, and emphasized the importance of proper communication and service of orders.
Issues: The issues included the starting point of limitation for challenging an order, violation of principles of natural justice, and the requirements of Regulation 15 for the authentication and communication of orders by the BIFR.
Ratio Decidendi: The court held that the starting point of limitation should be the date when the certified copy of the order was obtained. The court emphasized the need for proper communication and service of orders, and the consequences of not adhering to the time schedule.
Final Decision: The writ petition was dismissed, and the interim order was vacated. The parties were directed to appear before the AAIFR for further proceedings.
Sanjiv Khanna, J.
1. Andhra Cement Ltd. – petitioner has filed this writ petition impugning order dated 12th August, 2011 passed by the Appellate Authority for Industrial and Financial econstruction (AAIFR) on an application filed by the Deputy Commissioner of Central excise, Guntur (‘Excise Department’, for short) – respondent for condonation of delay in challenging the order dated 21st July, 2008, passed by Board for Industrial and financial Reconstruction (BIFR).
2. AAIFR has held that starting point of limitation would be the date when the respondent received copy of the order dated 22nd December, 2009, from the BIFR.
3. The facts as noticed by AAIFR are that an appeal was preferred by the respondent n 14th December, 2009, but without enclosing certified copy of the order passed by he BIFR dated 21st July, 2008. In fact, the respondent had applied for the certified copy on 14th December, 2009, which was supplied to them on 6th January, 2010. Thereafter, the certified copy was filed with the appeal pending before AAIFR.
4. Learned counsel for the petitioner submits that in the present case, the respondent as made aware of the order dated 21st July, 2008, by way of letter dated 8th October, 2008 written by the petitioner enclosing therewith summary of record of proceedings held before Bench No. 1 of BIFR on 21st July, 2008. The said letter was received by the respondent on 24th October, 2008.
Reliance is placed upon the letter dated 7thNovember, 2008 written by the Office of the Commissioner of Customs and Central Excise, Guntur to the Assistant Commissioner of Customs and Central Excise, Guntur/Vijaywada. Our attention is drawn to the legal opinion dated 17th June, 2009, obtained by the respondent from the Ministry of Law and Justice. Reliance is placed on decisions of the Delhi High Court in W.P.(C) 2207/2007, Vijay Kumar Mills Ltd. And Another vs. ICICI Bank & Ors., decided on 10th July, 2008, Civil Writ No.5408/2007, Textile Labour Union, Nadiad vs. UOI & Ors. decided on 17th August, 2007 and Girdhar Lal M. Pittie and Anr. vs. Appellate Authority for Industrial and Financial Reconstruction and Others, (1998) 94 Company Cases 225 in support of the proposition that the date of knowledge is an important factor for construing and deciding when limitation should begin and failure of the respondent to apply for certified copy within a reasonable time should be a factor, which was highlighted but not duly considered by the AAIFR. Reference is made to the decision of the Supreme Court in Postmaster General and Others vs. Living Media India Ltd. and Anr, (2012) 3 SCC 563 to highlight that lackadaisical approach should not be condoned and delays in matters of this nature could cause prejudice. It is highlighted that the petitioner has already made full payment of the principal amount under the rehabilitation scheme and Customs, Excise and Gold (Control) Appellate Tribunal has allowed the appeal of the petitioner quashing penalty and interest in view of the order dated 21st July, 2008 passed by the BIFR.
5. To appreciate the said contentions, we would like to record basic and relevant facts, viz., (a) The petitioner herein is a company engaged in the activity of manufacture and sale of cement. (b) In 1990, they filed a reference under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (Act, for short) before the BIFR and by order dated 23rd July, 1990, were declared ‘sick’. IDBI was appointed as an operating agency. (c) By order dated 6th June, 1994, a rehabilitation scheme was sanctioned, but the same was challenged by the outgoing promoters as the scheme envisaged change of management. AAIFR on 19th December, 1994, sanctioned the scheme with certain modifications. (d) In spite of infusion of funds, the petitioner had suffered huge and prolonged losses. In December, 2001, BIFR passed an order declaring that scheme had failed and issued direction for change of management, which again was challenge
