SURVIVAL OF THE RIGHT ITSELF DOES NOT AMOUNT TO ACCRUAL OF RIGHT

[Mr. M. GOVINDARAJAN]

                        In ‘Siddramappa S. Yalamalli V. Commissioner of Central Excise, Belgaum’ – (2010 -TMI - 204019 - CESTAT, BANGALORE) one Shri Murgesh S. Yelamoli was the Managing Partner of the appellants’ firm.  He received the orders of three orders as detailed below: 

•  No. ST/642/10, dated 27.2.2009 received on 16.3.2009;
•  No. ST/640/10, dated 29.12.2008 received on 15.01.2009; and
•  No. ST/641/10, dated 27.1.2009 received on 07.02.2009. 

All the legal matters of the firm were handled by the said Managing Partner.   He died on 23.06.2009.  Appeals were filed by the firm before the Tribunal on 05.10.2009.  These appeals were filed beyond six months from the date of receipt of the copies of the orders-in-original by the Managing Partner.  Therefore the appellate authority dismissed all the appeals. 

                        Against this order the firm went for appeal before the Tribunal. The appellant submitted the following points before the Tribunal in substantiating their claim: 

• The receipt of order copies by the Managing Partner was known to them till 22.09.2009 when a briefcase of the deceased Managing partner was opened.  Then only the appellants took steps to prepare the appeals and filed the same before the Commissioner (Appeals);
• Though the Commissioner (Appeals) cannot entertain an appeal filed after 6 months from the date of receipt of the copy of the order of the Adjudicating authority the period of 6 months is to be counted from the date of receipt of the copy of the order by successor of a person who had received such copy during his life time without imparting any knowledge in relation to such receipt copy of the order to the successor;
• Section 16 of the Limitation Act has to be understood with reference to entire period of limitation available for the appellants to challenge the order of the lower authority;
• The accrual of right cannot be restricted only to the first day of the period of limitation but it will subsist till the expiry of the period of limitation;
• Since the present appellants i.e., the successors of the deceased of the Managing Partner of the appellants could lay their hands on the copies of the orders only on 22.9.2009, the day which was within the period of 6 months from the date of receipt of the copies of the orders by the deceased Managing Partner of the appellants, the period of limitation, as far as the present appellants are concerned, should be counted from 22.9.2009.  Having so counted, the Commissioner (Appeals) could not have held that the appeals were filed beyond the period of 6 months;

The Department put for the following submissions: 

• The provision of law comprised under Section 85(3) specifically provides for definite period not only for filing the appeal but also defines the extended period for the purpose of condonation of delay in filing the appeal within such period of limitation;
• The copies of the orders were received by the Managing Partner of the appellants on 15.1.2009, 7.2.2009 and 16.3.2009 whereas the appeals were filed on 05.10.2009 and therefore the same were filed beyond 6 months from the date of receipt of the copies of the order;
• The Commissioner (Appeals) has to function within the parameters prescribed in this regard under the statutory provisions and cannot exceed the powers bestowed up on it under the said provisions of law;
• In this case the Commissioner (Appeals) lacked jurisdiction to entertain the appeals and therefore no fault can be found with the impugned orders dismissing the appeals; 

The Tribunal after considering both parties held the following: 

• The statutory authorities created under a statute have to function within the parameters prescribed under such statute and cannot travel beyond the parameters prescribed under the same;
• Bearing the same in mind, no fault can be found with the impugned orders passed by the Commissioner (Appeals);
• As far as Section 16 of the Limitation Act is concerned-

-         sub section (1) provides that where a person who would, if he were living, have a right to institute a suit or make an application dies before the right accrues, or where a right to institute a suit or make an application accrues only on the death of a person, the period of limitation shall be computed from the time when there is a legal representative of the deceased capable of instituting such suit or making such application;

-         sub section (2) provides that where a person against whom, if he were living, a right to institute a suit or make an application would have accrued dies before the right accrues, or where a right to institute a suit or make an application against any person accrues on the death of such person, the period of limitation shall be computed from the time when there is a legal representative of the deceased against whom the plaintiff may institute such suit or make such application;

-         sub section (3) provides that nothing in sub section (1) or sub section (2) applies to suits to enforce rights of pre-emption or to suits for the possession of immovable property or of a hereditary office.

-         The applicability of Section 16 of the Limitation Act to the proceedings before the Tribunal or other authorities constituted under the said is itself in doubt;

-         The authorities functioning under the Act are bound by the provisions of the Act.   If the proceedings are taken under the Act by the Department the provisions of limitation prescribed under the Act will prevail;

• Considering the facts of the present case Section 16 would be of no help to the appellants.   Section 16 relates to the cases where right to sue accrues after the death of the party.   In this case the period to file the appeal commenced with the accrual of the right to file the appeal in favor of the appellants on the day when the copies were received by the Managing partner.   Therefore provisions of Sec. 16 of the Limitation act cannot apply in the facts of the case. 

The High Court further held that the there cannot be any doubt about the proposition that the right to accrue will survive till the expiry period of limitation.   However Section 16 speaks of ‘date of accrual of right to sue’.   Date of accrual of right to sue is different from subsistence of a right which ahs already accrued.   A right to file appeal, in fact, arises from the day when proceeding commences before the original authority.   The provisions regarding the period of limitation are procedural provisions in relation to filing of the appeals.   Besides as far as the period of limitation for exercise of the right to appeal is concerned under the relevant statute, it commences from the day when aggrieved party receives the copy of the order.   It will thereafter survive for the period of limitation prescribed under the statute.   Survival of the right itself does not amount to accrual of right.   Survival follows the accrual.  Being so, the expression of accrual of right used in Section 16 cannot be equated with the survival of the right already accrued on receipt of the copy of the order.