L & T FINANCE LIMITED Vs. TAHIR HUSSAIN

JUDGEMENT

(1.) THE petitioner is a non -banking finance company incorporated under the Companies Act, 1956. It entered upon a loan -cum -hypothecation agreement with the respondent to finance a Tata truck, the repayments of which were agreed to be paid in 47 monthly instalments. The truck was hypothecated and remained collateral property for the purpose of loan as security. It is complained that the first respondent defaulted in payment of instalments which led to the truck being re -possessed on 13th November, 2009. The loan was recalled and the outstanding amounts were required to be paid within 7 days from the date of receipt of notice, failing which, the proceeds of the sale of the truck would be adjusted in the loan account. The dispute led to arbitration in terms of clause 17.1 of the loan -cumhypothecation agreement. But before doing so, the petitioner company filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 on 1st February, 2010 in the suit brought by the respondent. In the said application, it was mentioned that the disputed truck was sold by the petitioner company on 13th December, 2009 as per the terms and conditions of the hypothecation agreement. This application under Section 8 was filed in response to a civil suit filed by the first respondent praying for mandatory and permanent injunction before the learned Additional Civil Judge (Senior Division), Ferozepur Jhirka, District Mewat. There was an ad -interim injunction issued by the trial court in favour of the plaintiff -respondent herein. The defendants, the petitioners herein, filed the application and sought adjournment and the matter was posted for filing written statement and reply to the application and stay was extended till the next date.

(2.) THE petitioners assert that they lost track of the suit thinking that the civil suit was not maintainable in view of the application filed under Section 8 of the Act. It is averred in this petition that the counsel engaged by them before the learned trial court were no longer on the panel of the company. It is asserted that the petitioner company is a very large organization having various branches and departments and has a very large portfolio of finance and has voluminous and scattered litigation throughout and therefore the suit was left unattended. The petitioner, one fine day discovered that it was proceeded ex parte on 9th September, 2010. The suit had been decreed ex parte on 18th August, 2012. The execution proceedings were taken out and on receipt of notice in execution, they came to know of the ex parte decree and filed an appeal in the Court of learned Additional District Judge, Nuh against the ex parte judgment and decree together with an application under Section 5 of the Limitation Act for condonation of delay of 335 days which had occurred in filing the appeal. It was supported by an affidavit. The appellate court has dismissed the application for condonation of delay. The appeal stood automatically dismissed. Against that order, the petitioner is before this Court.

(3.) I asked learned counsel for the petitioner to point out from the application and affidavit under Section 5 of the Limitation Act of sufficient cause shown for condoning the delay. He points out from Annexure P -7 the reason which led to delay in filing the appeal. It was not disputed that the counsel had been engaged before the Civil Court by the petitioner. The only reason shown to support re -entry into the case is the size of organization handling voluminous and scattered litigation and hence, at times, a matter gets left out unattended. Such pleas in support of an application for condonation of delay in filing appeals appears to have become the stock in trade of finance companies. The larger the company, the greater is its responsibility to approach Court in time since they have at their command the legal paraphernalia supported by a battery of lawyers available to them and to accordingly advise. The delay of 335 days in filing the appeal is not supported by any cogent explanation for the delay and therefore the appellate court was right in dismissing the application for condonation of delay.