Published on: 01st January 2023 at 22:25 IST
It must be stated before stating anything else that in a frank, fair, forthright and firm judgment titled Bank of India vs Magnifico Minerals Private Limited and Anr. in Interim Application No. 30326 of 2022 in Commercial Appeal from Order (L) No. 27216 of 2022 pronounced finally on December 19, 2022 pulled up the Bank of India for its ‘lackadaisical attitude’ in dealing with public money, observing that nationalized banks should be made conscious of the fact that their negligence causes a great deal of loss to the public.
It must be noted that a Division Bench of Hon’ble Mr Justice Kamal Khata and Hon’ble Mr Justice KR Shriram refused to condone a delay of 579 days in filing a commercial appeal against a November 2020 order. The court’s refusal was primarily due to insincere efforts that were made by Bank of India and hence we find that it dismissed the appeal.
At the very outset, this learned, laudable, landmark and latest judgment authored by Hon’ble Mr Justice Kamal Khata for a Division Bench of the Bombay High Court comprising of Hon’ble Mr Justice KR Shriram and himself sets the ball in motion by first and foremost putting forth in para 1 that, “This application is for condoning a delay of 579 days in filing of appeal.”
Be it noted, the Bench observes in para 7 that, “In our view, as is apparent from the application, there is no sufficient cause made out and an insincere effort is made to get the delay condoned. We say this because,
(a) The applicant is a Nationalized Bank and has several persons to look after its affairs and a team of people for legal matters. It is well equipped with technology to communicate with people through telephones, emails, sms, whatsapp etc. There are no particulars given,
(b) As to when (the date) the instructions were given to advocate to file the appeal after the certified copy of the order was made available on 5th December 2020 is not mentioned.
(c) When (the date) the draft appeal was sent to its Delhi Branch, when (the date) it was approved by the legal department and returned to the advocate. (the date) – even approximate date is not given;
(d) With regard to the alleged follow up with the advocate and in the absence of revert from him what action the bank took against the officers is also not mentioned. What steps were taken to follow up is also not given.
(e) How the applicant suddenly came to know only in August 2022, is not explained.
(f) Despite the delay, why applicant took more than a month to engage a new advocate in September 2022 is not explained.”
It is worth noting that the Division Bench then specifies in para 8 that, “This is a Commercial Appeal that is being filed by applicant. The Hon’ble Apex Court in Government of Maharashtra (Water Resources Department) Represented By Executive Engineer vs. Borse Brothers Engineers And Contractors Private Limited (2021) 6 SCC 460 in paragraph nos. 59, 62 and 63 has held as under:
“59. Likewise, merely because the Government is involved, a different yardstick for condonation of delay cannot be laid down. This was felicitously stated in Postmaster General v. Living Media (India) Ltd. [Postmaster General”] as follows: (SCC pp. 573, paras 27 -29)
27. It was not in dispute that the persons(s) concerned were aware or conversant with the issues involved including the prescribed period of limitation for taking up the matter by way of filing a special leave petition in this Court.
They cannot claim that they have a separate period of limitation when the Department was possessed with competent persons familiar with court proceedings. In the absence of plausible and acceptable explanation, we are posing a question why the delay is to be condoned mechanically merely because the Government or a wing of the Government is a party before us.
28. Though we are conscious of the fact that in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bona fides, a liberal concession has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances, the Department cannot take advantage of various earlier decisions.
The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation undoubtedly binds everybody, including the Government.
62. Also, it must be remembered that merely because sufficient cause has been made out in the facts of a given case, there is no right in the appellant to have delay condoned. This was felicitously put in Ramlal v. Rewa Coalfields Ltd (1962) 2 SCR 762: AIR 1962 SC 361.
63. Given the aforesaid and the object of speedy disposal sought to be achieved both under the Arbitration Act and the Commercial Courts Act, for appeals filed under Section 37 of the Arbitration Act that are governed by Articles 116 and 117 of the Limitation Act or Section 13(1-A) of the Commercial Courts Act, a delay beyond 90 days, 30 days or 60 days, respectively, is to be condoned by way of exception and not by way of rule.
In a fit case in which a party has otherwise acted bona fide and not in a negligent manner, a short delay beyond such period can, in the discretion of the court, be condoned, always bearing in mind that the other side of the picture is that the opposite party may have acquired both in equity and justice, what may now be lost by the first party’s inaction, negligence or laches. (Emphasis supplied).”
Quite significantly, the Division Bench then notes in para 9 that, “In this case, we are satisfied that the applicant has not acted bonafide and has treated the matter casually. Being a Public Sector Bank, it should have been more careful dealing with public money, particularly when it is possessed with competent persons familiar with court proceedings.
In the absence of plausible and acceptable explanation, we are not inclined to exercise discretion in favour of applicant.”
Most significantly, the Division Bench then minces just no words to encapsulate in para 10 what constitutes the cornerstone of this noteworthy judgment wherein it is held that, “We have to observe that the staff/officers of public sector banks/Nationalized Banks and public undertakings are insensitive about the fact that they are working for the public and dealing with public money. Their lackadaisical attitude puts the public money at grave risk and consequently the economy of the country.
Whilst applicant (a Nationalized Bank) expects the Courts to protect the interest of the public, they continue to be lackadaisical and negligent and have taken the Courts for granted, which in our opinion, is required to be stopped.
The errant staff and officers need to be pulled up and made accountable. It is high time that the public sector banks/Nationalized Banks should take things seriously and be made conscious of the fact that their negligence causes a great deal of loss to the public.
In this case too it appears that they are not made answerable so far and no action seems to have been taken against them by the higher authorities for their neglect of matters.”
Furthermore, the Division Bench then hastens to add in para 11 stating that, “It will be apposite to quote from the judgment State Bank of India (supra) where the Court in paragraph no.4 observed that :-
“4……..The property of the public institutions belongs to the society in general and not to any individual or group of individuals in particular. Precisely for this reason, it appears that no particular individual is interested in safeguarding it. What belongs to all belongs to none in particular,”.
“The affairs of the public institutions are managed by paid employees, some of whom are interested only in their salaries. As long as their salaries and jobs are not threatened, they take the least care in safeguarding the interests of the institutions they serve,”.
,”In the hierarchy of responsibility in the bureaucratic set up which invariably accompanies these institutions, the responsibility for the loss to the institution is hard to fix, and the employees take advantage of the same,”.
“What is more, with the growing corruption in various forms, it is not difficult for interested parties to manage delays in taking legal proceedings against the debtors of these institutions. In all cases where public institutions such as banks are involved, the stakes are bound to be high. It will not be difficult for unscrupulous persons to make a regular business out of the deliberate delays in taking appropriate legal proceedings against the debtor.”
These observations hold true even today. However, it is necessary for the courts to step up and change in accordance with the times. It is now exceedingly onerous and difficult to retrieve money lent if there is considerable delay in proceeding against the defaulters.
It is therefore imperative for the institutions to take strict action against all concerned and penalize them in such a manner that they would desist from causing any loss to the public money. The times have changed and consequently the difficulties faced then as narrated in State Bank of India (supra).”
Frankly speaking, the Division Bench then concedes in para 12 that, “In our view, therefore, mere granting of costs or penalizing the officers responsible, would not suffice as considerable time having passed, the concerned officers may not be either available on account of transfer, superannuation etc. and if they have passed, we do not propose to penalize the family.”
Furthermore, the Division Bench then very rightly points out in para 15 stating that, “In any case, all the submissions made in this application relying upon Rafiq & Ors (supra), Smt. Lachi Tewari (supra) and M/s. Transasia Bio-Medicals Pvt. Ltd. (supra) have been effectively dealt with the Apex Court,”.
“In Government of Maharashtra (Water Resources Department) Represented by Executive Engineer (supra) where it is held that, merely because the Government is involved, a different yardstick for condonation of delay cannot be laid down and in commercial matters, condonation of delay should be an exception and not a rule.””.
“In Government of Maharashtra (Water Resources Department) Represented by Executive Engineer (supra) where it is held that, merely because the Government is involved, a different yardstick for condonation of delay cannot be laid down and in commercial matters, condonation of delay should be an exception and not a rule.”
Finally, the Division Bench then concludes by holding in para 16 that, “The application is therefore, dismissed. No order as to costs. Appeal, consequently, also dismissed.”
In essence, we thus see that the Bombay High Court very rightly takes a strong exception to the lackadaisical attitude of the Bank of India in dealing with the public money as it puts the economy at a very great risk.
It also minced just no words to make it indubitably clear that the nationalized banks should be made conscious of the fact that their negligence causes a great deal of loss to the public. It was also made absolutely clear that in commercial matters condonation of delay should be an exception and not a rule! No denying it!
Sanjeev Sirohi, Advocate