2025 (10) TMI 1135 - HC - FEMA

Legal representative substituted despite 3,621-day delay; Section 394 CrPC and Limitation Act principles applied to condone delay

Abdul Hameed Rehmani Versus Special Director Enforcement Directorate

HC allowed application for substitution and condoned a 3,621-day delay in filing an impleadment application. Court held statutory schemes under FERA, 1973 ... Continuance of proceeding in the event of death or insolvency - right of the present applicant to seek substitution as legal representative - statutory provisions of FERA, 1973 and FEMA, 1999- Death or insolvency in certain cases - impleadment application has been filed after an inordinate and unexplained delay of 3621 days - HELD THAT:- The Code of Criminal Procedure, 1973, on the other hand, contains its own provisions dealing with the substitution of legal representatives in criminal proceedings. For instance, Section 394 provides for abatement of appeals, and sub-section (2) specifically stipulates that where the appeal is against a conviction and sentence of death or imprisonment, and the appellant dies during the pendency of the appeal, any of his near relatives may – within thirty days of his death – apply to the appellate court for leave to continue the appeal; and if such leave is granted, the appeal shall not abate. Any application filed beyond this period of thirty days has to be accompanied by an application under Section 5 of the Limitation Act seeking condonation of delay. FERA, 1973, undisputedly, is a criminal statute, but as noted above, its Section 55 does not provide any timeline within which the legal representative of the appellant is required to file an application for his impleadment. Section 43 of FEMA, 1999 goes a step further in providing that an appeal shall not abate by reason of death, and that all rights and obligations of the deceased shall devolve upon his legal representatives. In view of this statutory scheme, the right of the present applicant to seek substitution as legal representative and to continue the present appeal cannot be curtailed, for such a right is specifically preserved under the governing statute. Even examining the present case from the standpoint of reasonableness, the circumstances of the present case clearly indicate that no undue delay can be attributed to the applicant. The record shows that the present appeal had been heard initially, and an interim order had been granted in favour of the appellant. Thereafter, the case was placed in the category of ‘regular matters as per its own turn’ in the year 2009, and it was not taken up for hearing till the year 2022, when it was again placed in the same category after merely issuing court notice to the counsels. The appellant, Abdul Hameed Rahmani, had passed away in 2013. Given that the appeal had not been listed for hearing at any time between 2009 and 2022, it cannot be said that it was unreasonable on the part of the applicant to file the present application for substitution as legal representative only in 2023, upon learning of the pendency of the appeal. The long non-listing of the matter, coupled with the absence of any proceedings during this period, provides a satisfactory and justifiable explanation for the delay. This is not a simplicitor case of condonation of delay, but one involving peculiar facts and circumstances where – the appeal had been preferred in 2007, placed in the ‘regular matters’ category in 2009, and then remained unlisted for nearly thirteen years. The appellant passed away in 2013, the appeal was listed once in 2022 and again relegated to the ‘regular matters’ list, and it was only when the connected criminal revision petitions were taken up in 2023 that the applicant, being the son of the deceased-appellant, became aware of the pendency of this appeal before this Court. These circumstances, viewed cumulatively, provide a reasonable and bona fide explanation for the delay in filing the impleadment application. In the totality of the above discussion, this Court finds that the applicant has made out a sufficient cause for condonation of delay. The statutory provisions of FERA, 1973 and FEMA, 1999 themselves confer a right upon the legal representatives to continue pending proceedings, and the applicant had filed these applications upon acquiring knowledge of the pendency of appeal, after the same were taken up for hearing in the years 2022-2023. Application seeking condonation of delay in filing the impleadment application is allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether an application for condonation of an inordinate delay (3621 days) in seeking impleadment as legal heir in a pending appeal is maintainable where the provision prescribing limitation for filing the appeal does not itself provide for condonation of delay. 2. Whether statutory provisions dealing with continuance of proceedings on death or insolvency (specifically the provisions corresponding to Section 55 of the repealed Act and Section 43 of the successor Act) confer a right on legal representatives to be substituted and continue an appeal, and whether those provisions prescribe any limitation or bar to late substitution. 3. Interaction between the special statutory scheme (continuance/substitution under the foreign exchange statutes) and the general procedural and limitation regime (Order XXII CPC, Articles 120-121 Limitation Act, and provisions under the CrPC where applicable): what procedural route and limitation principles govern substitution and/or setting aside abatement in such proceedings. 4. Whether, on the facts (long non-listing of the appeal, death of appellant during pendency, applicant's belated knowledge of pendency), sufficient cause is made out to condone the delay in filing the impleadment application. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Maintainability of condonation application where the appeal-limitation provision is silent on condonation Legal framework: The statutory provisions prescribing the time for filing an appeal before the High Court under the special enactments set a 60-day period from communication of the order; the successor Act authorises condonation of further delay only up to 60 days for filing the appeal itself. Precedent Treatment: The respondent relied on the submission that the right to appeal and any power to condone delay must flow from the statute; where statute does not provide, condonation cannot be granted. The Court examined and rejected this contention in light of other statutory provisions conferring substitution rights. Interpretation and reasoning: The Court held that the limitation provisions governing the filing of appeals (and limited condonation for filing an appeal) deal exclusively with the remedy of appeal and do not address substitution/impleadment of legal representatives or condonation of delay in moving such substitution applications. Consequently, the absence of an express provision in the appeal-limitation section does not preclude a court from considering condonation of delay in an application for substitution where substitution is recognised elsewhere in the statutory code. Ratio vs. Obiter: Ratio - Where substitution/continuance is itself a statutory right, the court may entertain an application for condonation of delay in impleadment notwithstanding that the appeal limitation provision is silent as to such condonation. Conclusion: The contention that condonation cannot be granted because the appeal-limitation provision does not expressly permit it is misplaced. Issue 2 - Effect of statutory provisions on continuance and substitution (Section 55 of repealed Act and Section 43 of successor Act) Legal framework: The provisions under the statutory scheme expressly provide that proceedings/appeals do not abate by reason of death or insolvency and that legal representatives may prefer or continue appeals in place of the deceased, with devolving of rights and obligations. Precedent Treatment: The Court relied on these specific statutory provisions as directly applicable and decisive of the entitlement to substitution, treating them as part of a special and self-contained framework. Interpretation and reasoning: The Court interpreted these provisions to mean that substitution is a statutory right; the special provisions do not contain a timeline for substitution and thus are distinct from the limitation that governs the filing of the appeal itself. Because the statute preserves the right of legal representatives as a matter of right, substitution cannot be frustrated by a literal application of the appeal limitation provision where that provision does not address death/insolvency contingencies. Ratio vs. Obiter: Ratio - Statutory continuance provisions that confer a right to legal representatives to continue appeals render substitution an intrinsic statutory right and do not, in themselves, impose any limitation period for filing applications for substitution unless expressly provided. Conclusion: The statutory scheme establishes a right of legal representatives to be substituted and continue an appeal; absence of an express limitation in those provisions does not defeat that right. Issue 3 - Interaction with general procedural/limitation law (Order XXII CPC, Articles 120-121 Limitation Act, CrPC provisions) Legal framework: Order XXII CPC and Articles 120-121 Limitation Act prescribe a sequence and time-frame (90 days for substitution; thereafter 60 days to apply for setting aside abatement; thereafter condonation under Section 5 Limitation Act) for civil substitution. CrPC contains specific timelines (e.g., 30 days) for applications to continue criminal appeals after death. Precedent Treatment: The Court referred to the Supreme Court's exposition of the procedural sequence for substitution and setting aside abatement under civil procedure and limitation law and noted distinct rules under criminal procedure. Interpretation and reasoning: The Court emphasised that the special statutory scheme for continuity under the foreign exchange laws is distinct from the general civil/criminal procedural rules. While Order XXII and Articles 120-121 provide a clear mechanism for civil suits/appeals, and CrPC provides for criminal appeals, those provisions do not displace the express statutory continuance rights under the special enactment which lack any prescribed timeline. The Court treated the general rules as illustrative of standard practice but not determinative where the special statute speaks differently. Ratio vs. Obiter: Obiter/Guiding - The general procedure and limitation rules provide a useful framework but do not override a specific statutory right of continuance without an express limiting provision. Conclusion: General substitution and limitation principles remain relevant, but where a special statute confers a right to legal representatives to continue proceedings without stipulating a timeline, the special scheme governs; procedural provisions of CPC/CrPC/Limitations do not automatically curtail that statutory right. Issue 4 - Sufficiency of cause on facts for condonation of delay in substitution application Legal framework: Courts assess 'sufficient cause' for condonation of delay in light of statutory scheme and facts; precedents recognise that long non-listing of appeals in High Courts may excuse delay in taking procedural steps by litigants. Precedent Treatment: The Court relied on authority noting that admitted appeals often remain unlisted for years and that appellants are not obliged to monitor listing continuously; such storage/pendency provides a reasonable basis for delay in procedural responses. Interpretation and reasoning: On the facts, the appeal was admitted and granted interim relief in 2008-2009, then placed in 'regular matters' and not listed for nearly 13 years. The appellant died in 2013; the applicant first learned of the appeal's pendency only when the matter resurfaced in 2022-2023. The Court found the prolonged non-listing, the absence of proceedings during the period, and bona fide acquisition of knowledge in 2022-2023 to be a satisfactory, justifiable explanation for the delay in filing the impleadment application in 2023. Ratio vs. Obiter: Ratio - Where an appeal remains unlisted in 'suspended animation' for a prolonged period and the legal heir acquires knowledge of pendency only upon revival, such circumstances may constitute sufficient cause to condone delay in seeking substitution. Conclusion: On the facts, sufficient cause was made out; no undue delay could reasonably be attributed to the applicant and condonation of the 3621-day delay was justified. Final Disposition and Directions (Court's Conclusions) The Court concluded that (a) the statutory continuance provisions confer a right on legal representatives to be substituted and continue pending appeals; (b) the absence of an express timeline in those provisions does not preclude condonation of delay in an impleadment application; (c) the general procedural and limitation rules do not oust the special statutory right where the special enactment is silent on time; and (d) on the facts, sufficient cause existed to condone the 3621-day delay. Accordingly, the application for condonation of delay was allowed and the matter ordered listed for hearing with directions to permit impleadment/substitution as prayed.