2025 (11) TMI 692 - AT - Customs

Appeal dismissed for non-prosecution under Rule 20; adjournments denied without cogent cause; restoration possible on proof

CESTAT CHENNAI - AT dismissed the appeal for non-prosecution under Rule 20 of the CESTAT (Procedure) Rules, 1982 after service of notice and repeated ... Dismissal of appeal for appellant’s default of non-prosecution - Order XLI Rule 17 of the CPC - HELD THAT:- It is found that the notice issued to the appellant by RPAD has been delivered on 11.3.2025. On the past four occasions also there was no representation on behalf of the appellant. It is found that the appellant is not interested in pursuing the appeal. The Hon’ble Apex Court in the case of Ishwarlal Mali Rathod vs Gopal & Others [2021 (9) TMI 1301 - SUPREME COURT], while condemning the practice of seeking repeated adjournments has observed that 'The resultant effect would be that such a litigant would lose confidence in the justice delivery system and instead of filing civil suit and following the law he may adopt the other mode which has no backing of law and ultimately it affects the rule of law. Therefore, the court shall be very slow in granting adjournments and as observed hereinabove they shall not grant repeated adjournments in routine manner. Time has now come to change the work culture and get out of the adjournment culture so that confidence and trust put by the litigants in the Justice delivery system is not shaken and Rule of Law is maintained.' A Division Bench of the Hon’ble Supreme Court in Benny D'Souza & Ors vs Melwin D'Souza & Ors [2023 (11) TMI 1309 - SC ORDER], heard an appeal wherein the major contention of the appellant was that the High Court should have dismissed the appeal for non-prosecution in terms of the order XLI Rule 17 CPC and particularly the Explanation thereto instead of dismissing the appeal on merits. Rule 20 of CESTAT (Procedure) Rules, 1982 provides that if the appellant appears afterwards and satisfies the Tribunal that there was sufficient cause for his non-appearance when the appeal was called for hearing, can set aside the dismissal and restore the appeal. Hence an opportunity for the appellant to restore the appeal and be heard on merits if sufficient cause is shown for his non-appearance, remains. The adjournments can’t be given for the mere asking without any serious reason, without being backed with proof, for the non-appearance of the Appellant or his authorised representative on the dates of public hearing - no purpose would currently be served in continuing with this appeal and hence reject the same for default as per Rule 20 of CESTAT (Procedure) Rules, 1982. Appeal disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether the Tribunal may dismiss an appeal for appellant's default or hear and decide it on merits when the appellant (or authorised representative) does not appear on the fixed hearing date. 2. Whether repeated adjournments or non-appearances without credible explanation/proof may be permitted, and the evidentiary standard required to justify adjournments or restoration of a dismissed appeal. 3. The interplay between the Tribunal's procedural rule empowering dismissal for default and the principle that dismissal on merits is impermissible where statutory/precedential provisions bar such disposal for non-appearance. 4. Whether an opportunity to restore an appeal exists after dismissal for default and the circumstances in which such restoration must be granted. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Tribunal's power to dismiss for default or decide on merits Legal framework: Rule 20 of the Tribunal's Procedure Rules gives the Tribunal discretion: where the appellant does not appear on the day fixed (or adjourned day), the Tribunal may either dismiss the appeal for default or hear and decide it on merits. Precedent treatment: Higher court authority (as cited by the Tribunal) emphasises that courts should not mechanically grant adjournments and that dismissal for non-appearance ordinarily results in dismissal for non-prosecution rather than a determination on merits, where such a rule or explanation so provides. The Tribunal references decisions applying the principle that dismissal on merits for mere non-appearance is inappropriate where statute or explanation bars it. Interpretation and reasoning: The Tribunal reads Rule 20 as expressly permitting two alternative courses - dismissal for default or hearing on merits. The power to hear on merits remains available to prevent injustice where appropriate; conversely dismissal for default is a permissible sanction where the appellant fails to prosecute and provides no sufficient cause. The Tribunal also situates this discretion against the backdrop of higher court admonitions against routine adjournments and delay. Ratio vs. Obiter: Ratio - The Tribunal's interpretation that Rule 20 confers discretion to dismiss for default or hear on merits is decisive for disposal; Obiter - comments about the desirability of hearing on merits in particular factual permutations are advisory. Conclusion: The Tribunal properly exercised its statutory discretion to dismiss for default in the factual matrix where the appellant repeatedly failed to appear and gave no indication of pursuing the appeal. Issue 2 - Adjournments, proof and standards for non-appearance Legal framework: Procedural rules and judicial principles require that adjournments are not to be granted routinely; non-appearance must be supported by sufficient cause and proof where restoration is later sought. Precedent treatment: The Tribunal relies on appellate authority criticizing dilatory tactics and mandating judicial diligence against routine adjournments; such authority supports requiring tangible justification for repeated adjournments or non-appearances. Interpretation and reasoning: The Tribunal reasons that allowing adjournments merely on request, without serious reason or supporting evidence for non-appearance, would perpetuate delay and frustrate access to timely justice. The judgment adopts the view that litigational discipline and protection of other parties' rights require refusal of unsubstantiated adjournment requests and may justify dismissal for default. Ratio vs. Obiter: Ratio - Adjournments cannot be granted merely on request without evidence; sufficient cause must be shown and supported by proof when non-appearance is relied upon to avoid dismissal. Obiter - generalized policy observations about the effects of delay on litigants and rule of law, while persuasive, are not operative commands in particular cases. Conclusion: The Tribunal correctly refused to countenance further adjournment or non-appearance where no serious reason or proof was provided; non-appearance over several hearings justified dismissal for default. Issue 3 - Effect of explanation in procedural rules regarding dismissal on merits Legal framework: Some procedural provisions (in the broader jurisprudence cited) contain an Explanation that non-appearance empowers dismissal for non-prosecution but does not authorise dismissal on merits. The Tribunal contrasts such provisions with Rule 20, which explicitly grants discretion to either dismiss for default or hear on merits, and preserves restoration where sufficient cause is later shown. Precedent treatment: Appellate authorities have construed explanations barring dismissal on merits strictly, restoring appeals where dismissal for non-appearance was treated as a merits disposal. The Tribunal acknowledges those authorities but distinguishes them on the basis that Rule 20 expressly contemplates both outcomes and includes a restoration mechanism. Interpretation and reasoning: The Tribunal reconciles the precedential caution against merits dismissals for non-appearance with Rule 20 by emphasising the presence of a statutory safeguard: if the appellant subsequently shows sufficient cause, the Tribunal must set aside dismissal and restore the appeal. Thus, dismissal for default under Rule 20 is not a final deprivation without opportunity for explanation and restoration. Ratio vs. Obiter: Ratio - Where Tribunal rules expressly permit dismissal for default paired with a restoration remedy upon sufficient cause, dismissal for default is permissible and consistent with principles that guard against inadvertent merits adjudication absent opportunity for explanation. Obiter - references to authorities proscribing merits dismissal where no such restoration mechanism exists. Conclusion: The Tribunal's dismissal for default under Rule 20 is lawful and consistent with broader precedents so long as the statutory restoration avenue remains available to an appellant who can later show sufficient cause. Issue 4 - Restoration after dismissal for default: standard and obligation Legal framework: Rule 20 provides that where an appeal has been dismissed for default and the appellant subsequently appears and satisfies the Tribunal that there was sufficient cause for non-appearance, the Tribunal shall set aside the dismissal and restore the appeal. Precedent treatment: Authorities emphasise that procedural fairness requires an opportunity to explain non-appearance and that courts should restore matters when sufficient cause is shown; however, courts also demand credible proof of cause and do not countenance casual or repeated defaults. Interpretation and reasoning: The Tribunal underscores that the restoration remedy is mandatory where sufficient cause is demonstrated, but places the onus on the appellant to produce credible proof. The Tribunal's exercise of discretion to dismiss for default does not extinguish the right to restoration; it merely enforces procedural discipline subject to later justification. Ratio vs. Obiter: Ratio - Restoration is obligatory upon satisfactory demonstration of sufficient cause; Obiter - the Tribunal's policy-driven observations about discouraging adjournment culture. Conclusion: Dismissal for default is appropriate in the absence of appearance or proof; should the appellant later demonstrate sufficient cause with evidence, the Tribunal must set aside dismissal and restore the appeal. In the present facts, no such showing was made and dismissal was justified.