2025 (7) TMI 863 - HC - Benami Property

Refusal to condone a delay of 204 days in filing appeals under Section 46 of the Prohibition of Benami Property Transactions Act 1988 by tribunal - HELD THAT - Appellant is entitled to succeed especially in the light of the fact that the appeals preferred by the benamidar are stated to have been admitted by the appellate tribunal and posted to 5.8.2025 for consideration. It would be highly unjust to deny an opportunity to the appellant to contest the proceedings of the adjudicating authority especially in the light of the contention raised by them that the proceedings u/s 26 of the Prohibition of Benami Property Transactions Act 1988 are not possible against them. It is true that the merits of the appeals will not be a ground to condone the delay. However on showing sufficient cause it is open for the appellate tribunal to condone the delay. A reading of Section 46 of the Prohibition of Benami Property Transactions Act 1988 shows that the appellate tribunal is vested with absolute power to condone the delay beyond 45 days. It is pertinent to mention that there is no outer time limit by which the tribunal is permitted to condone the delay. Therefore on showing sufficient cause the Tribunal can always entertain the application for condonation of delay. What constitutes a sufficient cause is of course a matter to be decided on the facts of each case. There cannot be a hard and fast rule regarding what constitutes a sufficient cause. It is in this context that the decision rendered by this Court in George Antony 2025 (5) TMI 2165 - KERALA HIGH COURT requires to be considered. This Court is of the considered view that the tribunal could have taken a more pragmatic approach rather than taking a pedantic approach and dismissing the appeals. Thus the orders dated 19.03.2025 passed by the tribunal impugned in these appeals call for interference. The delay of 204 days in preferring the appeals stands condoned.

Summary

The core legal questions considered by the Court in these appeals were:

1. Whether the appellate tribunal was correct in law in refusing to condone a delay of 204 days in filing appeals under Section 46 of the Prohibition of Benami Property Transactions Act, 1988.

2. Whether the appellate tribunal erred in not accepting the sufficient cause explained by the appellant for the delay in filing the appeals.

Issue-wise Detailed Analysis:

Issue 1: Legality of refusal to condone delay of 204 days in filing appeal

Relevant legal framework and precedents: Section 46 of the Prohibition of Benami Property Transactions Act, 1988 prescribes a limitation period of 45 days from receipt of the order for filing an appeal before the appellate tribunal. However, the statute vests the appellate tribunal with absolute discretion to condone delay beyond the prescribed period upon showing sufficient cause. There is no outer time limit prescribed for condonation of delay under this provision. The Court referred to the precedent set in George Antony v. Albert Antony, which elucidates the flexible approach to condonation of delay based on facts and circumstances of each case.

Court's interpretation and reasoning: The Court emphasized that the appellate tribunal's power to condone delay is discretionary and should be exercised liberally to avoid injustice. The tribunal's refusal to condone delay must be based on a proper appreciation of the reasons furnished by the appellant. The Court observed that the tribunal adopted a pedantic approach by dismissing the appeals solely on the ground of delay without adequately considering the explanation provided.

Key evidence and findings: The appellant is a charitable and religious trust engaged in social welfare activities under a spiritual organization. The delay was substantially attributed to the appellant's engagement in spiritual activities during the Christmas season and subsequent legal consultations to determine the appropriate remedy. The appellant initially contemplated challenging the proceedings by way of writ petition under Article 226 of the Constitution but later opted to prefer appeals before the appellate tribunal based on legal advice. The appeals filed by the benamidar (the alleged owner in the benami transaction) were admitted and posted for hearing, indicating ongoing proceedings on related matters.

Application of law to facts: Considering the discretionary power under Section 46, the Court found that the appellant's explanation constituted sufficient cause. The delay was not due to negligence or willful default but arose from genuine legal deliberations and procedural decisions. The Court held that denying the appellant an opportunity to contest the adjudicating authority's orders would be unjust, especially in light of the parallel appeals filed by the benamidar being admitted for hearing.

Treatment of competing arguments: The respondent argued that the period from January 2024 to June 2024 was unexplained and that the tribunal's order was correct. The Court rejected this contention, noting that the appellant's engagement in spiritual activities and legal consultations justified the delay. The Court emphasized that the tribunal should have adopted a pragmatic, rather than a rigid, approach.

Conclusion: The appellate tribunal erred in law by refusing to condone the delay. The delay of 204 days was condoned, and the appeals were ordered to be admitted and heard along with related appeals.

Issue 2: Adequacy of the explanation furnished for delay

Relevant legal framework and precedents: The concept of "sufficient cause" for condonation of delay is fact-sensitive and lacks a rigid definition. Courts have consistently held that sufficient cause must be judged on the facts of each case, considering reasons such as illness, legal advice, or other unavoidable circumstances. The Court relied on the principles laid down in George Antony (supra) to assess the sufficiency of cause.

Court's interpretation and reasoning: The Court recognized that the appellant's explanation-engagement in religious activities during Christmas and subsequent legal advice regarding the appropriate remedy-amounted to a sufficient cause. The Court noted that the appellant's initial intention to file a writ petition was a bona fide legal strategy, and the eventual decision to file appeals was based on sound legal advice.

Key evidence and findings: The appellant's pleadings and submissions detailed the timeline of events, including receipt of show cause notices, provisional and final orders, and the period during which legal advice was sought. The Court found the explanation credible and supported by the factual matrix.

Application of law to facts: Applying the principle that sufficient cause is flexible and fact-dependent, the Court concluded that the appellant's reasons were adequate to justify the delay.

Treatment of competing arguments: The respondent's contention that the delay period was unexplained was not accepted, as the Court found the appellant's explanation detailed and reasonable.

Conclusion: The explanation furnished by the appellant satisfied the requirement of sufficient cause for condonation of delay.

Significant Holdings:

"A reading of Section 46 of the Prohibition of Benami Property Transactions Act, 1988 shows that the appellate tribunal is vested with absolute power to condone the delay beyond 45 days. It is pertinent to mention that there is no outer time limit by which the tribunal is permitted to condone the delay. Therefore, on showing sufficient cause, the Tribunal can always entertain the application for condonation of delay."

"What constitutes a sufficient cause is, of course, a matter to be decided on the facts of each case. There cannot be a hard and fast rule regarding what constitutes a sufficient cause."

"It would be highly unjust to deny an opportunity to the appellant to contest the proceedings of the adjudicating authority, especially in the light of the contention raised by them that the proceedings under Section 26 of the Prohibition of Benami Property Transactions Act, 1988 are not possible against them."

"The tribunal could have taken a more pragmatic approach rather than taking a pedantic approach and dismissing the appeals."

The Court set aside the orders of the appellate tribunal refusing condonation and dismissed the appeals. The delay of 204 days in filing the appeals was condoned. The appellate tribunal was directed to number and proceed with the appeals, along with related appeals filed by the benamidar, in accordance with law.