common bond - aiboc

Vol. 39 No. 10 Total 12 Pages BANGALORE Single Copy Rs. 3/- JANUARY - 2021

A JUG FILLS DROP BY DROP

Editorial WELCOME 2021

he headline story of pandemic has beenreplaced in national media by stories of

peasants’ movement at Delhi-Haryana borderand fraternal action programme of the workingpeople in support of thefarmers. The farmers aremarching towards Delhi whenthey are blocked at theoutskirts. The entire statemachinery is failing to controlthe wrath of the farmeragainst the three controversialFarm Bills passed in theParliament. The gradual onsetof biting cold has failed todeter the peasants from theirresolve. The fraternal strikeaction apart from extendingsolidarity with the peasants’struggle also expressed itsfury against sweeping reformsof labour laws and other anti-people policiespursued by the government. Reports fromdifferent corners suggest that there wasspontaneous response and sustenance to thecause of protest action. But is it sufficient?Can we reach the goal by observing a one daystrike? Possibly, the movement has not yetattained the desired level of confidence of thecitizenry.

There are pockets of huge resentment andresistance against different policies andprogramme of the central government despitemassive popular mandate it enjoys. People arevoicing their concern about growing unemployment,recession, intolerance and other primary issuesthat are affecting the populace. But they aresporadic, scattered and do not have a cohesive

character for which it has failed to create thedesired volume of thunder that will strike theearth with lightning and torrential outburst tocleanse the society from all negativity. The

failure to build a commonthread between all theaffected persons inagriculture, industry, bank,insurance, port trust andeducation, etc., a realmilitant alternative with adefined alternative roadmapcannot be built. Absence ofsuch unified movement of theworking class is a majorsource of comfort for theruling institution.

The above lines are notdirected towards anyparticular political party but

towards the evolving political structure of thecountry. Centralisation of power, at any point oftime, leads to unfettered autocracy. So for sakeof India, voice of dissent is so necessary at thishour. Such dissent is not for dissent itself. It isfor building a complete structure that encompassesall the rational burning issues affecting the peopleat large. Such a structure with a defined policyalternative can only be an accepted alternative.

The issue is how the contour of such resistancewill be drawn. Who are the forces to join suchstructure of active resistance? Unfortunately,the opposition political parties are conceding spaceson a regular interval. People are not reactingunless there individual self are affected. This isa red herring signal for democracy. This is wherethe youth of the country has a role to play.

Wishes theirReaders

A Happy &ProsperousNew Year

2021

COMMON BOND

T

2 Common Bond, January-2021IN THE SKY THERE IS NO DISTINCTION OF EAST AND WEST

Fortunately, a large number of forward lookingyouth are with the Confederation. But we haveour own doubt about fulfillment of our dreams inthe prevailing socio-political super structure. Eversince the onset of liberalization, there are certainnegative features that have engulfed the societydespite some positive gains elsewhere. A majornegative fallout is the alienation of the youthfrom the society itself. A fetish consumerismand self centred outlook has taken them out ofthe orbit for a desire to change the society.The word ‘REVOLUTION’ is possibly a clichénow. The students and youth have their earlylesson in social belongingness by a group ofdedicated persons in colleges and universities.Such persons unfortunately are no longer there.Student politics itself are losing its acceptabilityin the campuses.

The year 2020 is possibly the worst year in thehistory of modern civilization. We in the presentgeneration have not seen a pandemic of this sizeand magnitude. As we are going to press, morethan a crore people have been affected. Wehave lost hundreds from our own bankingfraternity. The emerging crisis in the economyhas been compounded by the impact of theCOVID-19. As the poet had written that if‘winter comes can spring be far behind’, similarlycan banking sector remain insulated from thecrisis if it engulfs the entire economy. Thegrowing non-performing assets, tepid growth inbusiness are all indicative of the malignancy ofthe system.

Unfortunately, like in other sectors, thegovernment proposes to respond by adoptingpolicies which are more apt in killing the patientitself rather than the curing it. The policies ofconsolidation and merger, so steadfastly opposedby the Confederation, have created an anarchicalsituation amongst the merged banks. Publishedfinancials suggest that rather than being a globalplayer as dreamt by the government, the publicsector banks post-merger are getting dwarfedin its home turf. The recent merger of LakshmiVilas Bank with DCB opens up the Indian bankingto the foreign players with disastrousconsequences for the national sovereignty.

The government has cleared the wage revision.

The arrears and new salaries will be paid to themembers in the first month of the New Yearitself. But an agreement achieved in a difficulttime has its own flip and flop side. The demandfor 5 days a week, demand for a transparentstaff accounting policy, issues affecting theretirees are yet to be achieved. There is noletup in pursuing the anti-banker policy by thegovernment. Union Finance Minister is on recordto observe that the Cabinet had already takenthe decision to privatize some of the public sectorbanks along with proposed privatization acrossthe sectors.

The challenge of earlier years is to haltconsolidation. The challenge of the ensuing yearwill be to halt privatization. But Confederationcannot alone resist. We have to align with thebroader movement of the masses. Unity has tobe built based on clear policy understanding.The gains of the wage settlement can only beenjoyed if we can effectively roll back the movetowards privatization. We have to clearlyunderstand that the bipartite is effective inthe current environment only and private ownershave no responsibility or commitment in honouringthe agreed service condition.

Fire has reached our doorstep. The night whichappears to have the potency to give birth of anew morning, may prolong itself, unless, thetempest of resistance can be built up by all sothat a fresh ray of hope welcome the firstmorning of 2021. Sometime in the middle of themonth the Confederation will meet in its 12thTriennial General Council at S. R. SenguptaNagar, Anil Jana Manch in Kolkata. Let a clarioncall of a defining movement emerge from thisgeneral council meet. Common Bond welcomesthe new leadership and assures its readers thatit will be their weapon in a decisive battle forreclaiming a India which really belongs to thepeople.

A very happy 2021 to all our readers, well-wishers, patrons and their families. We shallcontinue to meet and exchange carrying thelegacy.STAY SAFE. BEST WISHES FROM THEEDITORIAL BOARD FOR A HAPPY NEW YEAR

Common Bond, January-2021 3

THERE HAS TO BE EVIL SO THAT GOOD CAN PROVE ITS PURITY ABOVE IT

In a joint operation, Reserve Bank of India onNovember 18, 2020 announced its plan to mergeLakshmi Vilas Bank Ltd. with DBS Bank India,immediately after the Government imposed amoratorium on the LVB limiting cash withdrawalsto ` 25,000/- for a month. The amalgamation withthe Indian subsidiary of Singapore DBS Bankmarks a shift in the RBI and Government standwith a foreign bank being tasked with reviving anailing old generation private lender instead ofrelying on public sector players to take over aproblematic rival.

Chennai Headquartered LVB started its journeyin Karur, the textile hub of the then MadrasPresidency in the year 1926. It has spread its wingsin 19 states and 1 union territory with 566branches. The bank is under a severe financialstrain ever since its management changed its gearand started lending to the large corporates withoutbothering for adhering to prudential norms at thecost of its customary strength in lending to smallbusiness. It all intensified after its disbursementof around ` 720 crore to the investment arms ofShri Malvinder Singh and Shri Shivinder Singh,former promoters of Ranbaxy, Fortis Health Careand Religare.

Unlike developed countries, ever since theBanking Regulation Act was formulated, RBI avoidletting a bank to collapse and step in to steer clearany systematic problem. In September, 2019, withthe LVB’s situation deteriorating, RBI had put itunder Prompt Corrective Action (PCA) limitingexpansion and mandating it to raise additionalcapital which LVB failed to mobilise. It tried to getit merged with M/s. India Bulls which didn’t findthe support from RBI while subsequent discussionwith M/s. Clix Capital was stuck over valuation.

The crisis lingered on. The Government and RBIdecided to step in what appeared to be preplannedexercise. As part of the revival strategy, DBS will

Article PROLOGUE TO AN UNFOLDING DRAMA

By Editorial Team

invest ` 2,500 crore in LVB. The terms ofamalgamation envisage complete write off ofShare Capital, Reserves and Surplus includingShare Premium Account. Besides on the appointeddate LVB shall cease to exist by operation of thescheme and its Shares and Debentures listed inany Stock Exchange shall stand delisted withoutany further action. Simply put, the Shares will havezero value when the scheme gets operationalized.The scheme did get operationalized since. The storyof amalgamation ensures 566 branches and 918standalone ATM in a platter to DBS at the cost of` 2,500 crore. A win-win situation for DBS Bankno doubt.

It is interesting by way of recapitulation to look atthe RBI decision to merge a weak bank in the 21stcentury.

It is evident that this is for the first time; RBI withthe blessings of the Government deviated from thetraverse terrain and embarked on a novel journey.What really prompted it? AIBOC along with otherofficers’ organization always emphasized on theneed to increase the transparency of decisionmaking and frame appropriate regulatory guidelineregarding amalgamation of failed private sectorbanks and NBFCs at a time when the frequency ofsuch failures are up. In recent times theGovernment also forced IL&FS, a NBFC, in whichit had a majority stake to go for a Board andManagement overhaul due to massivemismanagement by the previous top brass. It isimperative in the post COVID situation, a clearroad map for overhauling the beleaguered weak

YEAR WEAKER BANK MERGED INTO

2020 Lakshmi Vilas Bank DBS Bank

2010 Bank of Rajasthan ICICI Bank

2004 Global Trust Bank OBC

2003 Nedungadi Bank PNB

2002 Benares State Bank BOB

4 Common Bond, January-2021OVERCOME ANGER BY LOVE, EVIL BY GOOD

old generation private banks should be formulatedinstead of adopting a case specific response. Thebest way out is the nationalization of the entiresector was rightly demanded by AIBOC. But wewish to digress a little further.

The decision to merge LVB with DBS was followedby a recommendation by an internal committeeof the RBI which proposed an overhaul of licensingpolicy of private banks and suggested allowinglarge corporates and industrial houses to floatbanks in India after suitable amendments to TheBanking Regulations Act we should aim atpreventing concentration of risk and unabatedlending by group companies. Further large andwell managed non-banking financial companieswith assets of over ` 50,000 crore may be allowedto convert into banks with a track record of atleast 10 years. The recommendations may besummarized as under:

i) Large corporates and industrial housesmay float banks after the BankingRegulation Act is amended

ii) Stake held by banks’ promoters may alsobe hiked from 15% to 26%

iii) Well-run NBFCs with over ` 50k croreassets and 10 year track record mayconvert to banks

iv) Payments banks can convert to smallfinance banks after three years ofoperations

The developments pertaining to merger of LVBwith DBS Bank followed by the publication of theReport of the Internal Committee of RBI clearlyindicate a well-planned road map of privatizationand entry of foreign banks in the Indian bankingspace. Governor of RBI while addressing a pressconference to share the decision of MonetaryPolicy Committee though denied the parenthoodof the Internal Committee Report, it is abundantlyclear that the said Report will not get thediscernable publicity unless it has the blessingsof the power that be.

It is an accepted doctrine that there should be adivorce between the ownership of industrial capitaland banking capital for the simple reason thathowever efficient the oversight system be, therewill be a natural tendency to use the finance forthe group companies without adhering to theprudential lending norms. This is based on thesimple understanding that provider of finance anduser of finance should be two distinct entities withno common interest. RBI which always preachesprudential management and governance of thebanks would appoint a committee which came outwith a recommendation which run parallel to itsown declared objective.

If we dissect the Balance Sheet of LVB, we willfind that the total business of the bank stood at` 37,595 crore at the end of September 2020, asagainst ` 47,115 crore at the end of September2019. The net loss after tax amounted to ` 396.99crore for the quarter ended September 30, 2020as against a net loss of ` 357.18 crore in the yearago quarter. Going further, LVBs Gross NonPerforming Assets stood at 24.45% while net NPAstood at 7.01%. The bank’s Tier-I Capital Ratio hasturned negative; the overall Capital Adequacy Ratio(CAR) as per Basel-III guideline was at a negative2.85% as of September 30. So there is no doubtthat the LVB is in crisis. But it is interesting torecollect that in 2018 DBS Bank wanted to acquire50% stake in LVB for ` 100 per share along with aright to have management control. DBS went toRBI for a discussion. But RBI reportedly told thatDBS will have to comply with stake dilution normsapplicable to private bank co-owners. The deal didnot materialize.

So the DBS wanted to acquire LVB for at least` 100 per share at one point. And now the entirebank has been handed over to DBS at free of cost.DBS has a capital base of ` 7,500 crore and adeposit book of ` 25,000 crore in India. They aregetting an equal amount of deposit from LVB forzero Capital. The RBI’s hurried bail out was notwarranted since there was no run on the bank atany stage and chances of recovery were present.It is expected that RBI should do a proper valuationof the bank before taking a call on merger. It is


THREE THINGS CANNOT BE LONG HIDDEN: THE SUN, THE MOON AND THE TRUTH

viewed by many that the RBI move hinders theprinciple of natural justice and may quell theefforts of other old generation private banks tomobilise capital because no one will bet on themlearning from the experience of LVB where thedepositor lose their entire investment.

Similarly, allowing Indian Corporate Houses intobanking will lead to the concentration ofeconomic and political power in those businesshouses and the Government could be faced withsignificantly higher bail out cost if these bankswere to fail. The history of such connected lendingis invariably disastrous – how can the bank makegood the loans when it is owned by the borrowerhimself? Even an independent committedregulator, with all the information in the world,finds it difficult to be in every nook and corner ofthe financial system to stop poor lending.Information on loan performance is rarely timelyor accurate. Yes Bank is an example. It managedto conceal its weak exposure for a considerableperiod and RBI failed to detect it.

Allowing the entry of corporates into banking willmean that highly indebted and politicallyconnected business houses will have the greatestincentive and ability to push for licenses. This willincrease the importance of money power inpolitical system and may lead to succumbing toauthoritarian cronyism. Can the regulatordiscriminate between proper business and shadyones? It can, but it has to be thoroughlyindependent and thoroughly apolitical. Whetherthese necessary and sufficient conditions areprevailing in India, will remain a subject matterof debate.

In 2016, the RBI had recognized the risk ofexcessive exposure to specific houses andannounced group exposure norms that limit theexposure the banking system can have to specificindustrial houses. The Internal Working GroupReport itself points out that all but one expert itconsulted were of the opinion that largecorporate/industrial houses should not be

allowed to promote a bank. The licensee’stemptation will be to misuse it because of self-lending opportunity. The timing of therecommendation is also questionable. Onepossibility is that Government wants to expand theset of bidders when it turns to privatize some ofthe public sector banks as being speculated for thelast few months.

So if we stitch the thread, it is clear that the RBIand Government wish to open the Indian bankingspace for both private sector players as well asforeign financial entities. We all know the reasons.India is a vast market not only for commodities butalso for finance which is required both forproduction and marketing of such commodities.When the system is flush with liquidity particularlyafter the injection of huge dose by the central banksto boost the demand for combating the pandemicimpact on the economy, India could provide a readymarket for such excess liquidity lying idle in theinternational market as well as the domesticindustrial houses.

So the merger of LVB should not be viewed inisolation. It is just unfolding of a great game plan ofprivatization and dismantling of the public sectorbanking and handing the same to the close croniesof the power that be in both domestic andinternational arena.

It is far better to professionalize the public sectorbank governance. It will be pennywise pound foolishto replace the poor governance under the presentstructure of this bank with a highly conflictedstructure of ownership by corporate houses or by aforeign entity. We are apprehensive that this wouldsubvert both the political and economic sovereigntyof the country and the move has to be viewed fromthat wide angle instead from taking a close anglesnap treating the issue as banks or banking sectorspecific, it is up to AIBOC to think over thisnarrative, develop the same and build aunassailable movement of bankers in the widernational interest. Else, may be a few years downthe line, there will be none even to write an obituaryof a great movement.

6 Common Bond, January-2021

BETTER THAN A HUNDRED YEARS OF IDLENESS IS ONE DAY SPENT IN DETERMINATION

The Monetary Policy Committee (MPC) left thepolicy repo rate unchanged at 4 per cent, for thethird time on the trot. This was widely expectedgiven the sticky retail inflation which, in the RBI’sview, is likely to remain elevated.

However, to support the nascent recovery in theeconomy, the six-member MPC persisted with itsaccommodative stance and decided to continuewith it for as long as necessary to revive growthon a durable basis.

The MPC forecast the retail inflation to hold aboveits midpoint target of 4 per cent in the second halfof 2020-21. Its members unanimously voted tokeep the policy rate unchanged.

With the outlook for inflation turning adverserelative to expectations in the last two months,the MPC projected CPI (consumer price index)inflation at 6.8 per cent for Q3 FY 21 and 5.8 percent for Q4 FY21.

The CPI inflation for the first half of FY22 has beenforecast at 4.6-5.2 per cent, with risks broadlybalanced.

Going by these projections and the MPC’s objectiveto achieve CPI inflation of 4 per cent within a bandof +/- 2 per cent, room to cut rates may beavailable only in the first quarter of FY22. The MPCprojected real GDP contraction in FY21 to be lowerat 7.5 per cent against the earlier projection of adecline of 9.5 per cent.

The RBI has been facing a tough task of jugglingbetween various objectives — inflation, rupee,bond yields and liquidity. A large governmentborrowing this fiscal year has prompted it to stepup outright OMOs (purchase of governmentbonds) to keep bond yields under check. But thishas led to an increase in liquidity.

Importantly, strong foreign flows have led to theRBI buying dollars to keep the rupee fromappreciating. But this has only exacerbated theliquidity glut, stoking inflation concerns.

The central bank has leaned more towards itsobjective of supporting growth rather thanaddressing high inflation. Managing long-termyields (to keep borrowing costs low), in view ofthe large government borrowing, also appears totop the RBI’s agenda for now.

Disinvestment will now gain a lot of momentum

Finance Minister Nirmala Sitharaman said, thepace of disinvestment will now gain a lot ofmomentum, and those which have already foundcabinet approval will be taken up with allearnestness. Speaking on Day 1 of ASSOCHAMFoundation Week, via video conferencing,Sitharaman said “Disinvestment will be happening,corporatisation of not just the defence, DRDOrelated labs but also banks - where I want them torun a lot more professional, they should also beable to raise money from the market,” she said.Sitharaman said that the Union Budget for 2021-

Economy

& Banking RBI’S 3RD QUARTER MONETARY POLICY


YOU WILL NOT BE PUNISHED FOR YOUR ANGER, YOU WILL BE PUNISHED BY YOUR ANGER

22 would emphasise on sustaining high publicexpenditure on infrastructure to revive theeconomy.

Regulatory Sandbox

RBI relaxes norms for applicants RegulatorySandbox: RBI relaxes norms for applicants : TheReserve Bank of India (RBI) has reduced the networth requirement for applicants for entry to theRegulatory Sandbox (RS) to foster innovation infinancial services. Further, the central bank hasallowed partnership firms and Limited LiabilityPartnership (LLPs) to participate in RS. RS refersto the live testing of new products or services ina controlled/ test regulatory environment forwhich regulators may (or may not) permit certainregulatory relaxations for the limited purpose ofthe testing. As per the modified enablingframework, an entity seeking entry to RS shallhave a minimum net worth of ` 10 lakh as per itslatest audited balance sheet against the existing` 25 lakh .

Cyber Security

Cyber security, data protection is a must topromote financial inclusion, says RBI GovernorShaktikanta Das. Issues concerning cybersecurity and data protection must be addressedto gain confidence of the excluded section in useof technology, which is necessary for promotingfinancial inclusion. “Technology, though being agreat enabler, can also lead to exclusion of certainsegments of society,” said the RBI, Governor inhis keynote address at a webinar on ‘Investing inInvestor Education in India: Priorities for Action’.The RBI Governor added that it was imperativeto build trust in formal financial services amongthe hitherto excluded population.

Credit Bureaus

Access to credit and cost of credit need to be

addressed by lesser reliance on collateral securityand greater cash-flow-based lending to improve thecredit-to-GDP ratio, according to Reserve Bank ofIndia Governor Shaktikanta Das. In this regard, Dasobserved that credit bureaus and the proposedPublic Credit Registry (PCR) framework areexpected to improve the flow of credit as well ascredit culture. As per RBI data, scheduledcommercial banks’ credit as a per cent of GDP camedown to 50.99 per cent in FY20 from 51.51 per centin FY19. “India, with a large section of populationin the working age group, is already the third-largest economy in the world in terms of purchasingpower parity and is aiming to become a $5-trillioneconomy. “...Among all the prerequisites forachieving demographic dividend and acceleratedgrowth, quality of human resources, greaterformalisation of economy, a higher credit-to-GDPratio and greater financial inclusion are thedifferentiating factors that would elevate oureconomy to the desired level,” Das said at awebinar organised by the National Council ofApplied Economic Research.

Monetary Policy Transmission

Monetary policy transmission of PSU banksstronger than private lenders: RBI paper: Themonetary policy transmission of state-owned banksin the short-run is stronger than their counterpartsin the private sector, and can be improved furtherwith capital infusion, said a RBI working paper. Thecredit channel of monetary policy transmission isrobust in India and its efficacy can be reinforced bybetter capital position of banks, said the workingpaper on ‘Asset Quality and Credit Channel ofMonetary Policy Transmission in India: SomeEvidence from Bank-level Data’. “Controlling forasset quality, in the short-run, the credit channel ofmonetary transmission of public sector banks isstronger relative to that of private sector banks,” itsaid. The Reserve Bank of India said the viewsexpressed in the paper are those of the authors andnot of the central bank.


THE FOOL WHO KNOWS HE IS A FOOL IS MUCH WISER THAN THE FOOL WHO THINKS HE IS WISE

CIRCULARS

2020 LLR 964

KARNATAKA HIGH COURT

Hon’ble Mr. G. Narendar, J.

W.P. No. 50166 of 2019 Dt/- 06.03.2020

Adarsh Flims and T.V. Institute

vs.

B.N. Kodandaramaiah and Another

PAYMENT OF GRATUITY ACT, 1972 – Section 7(7) – Condonation of delay – LIMITATION ACT, 1963

– Section 29 – Applicability of – Whether appellate authority have power to condone delay in filing of

appeal beyond 60 days as provided under Section 7(7) of the Act ? No – Held, Appellate Authority is

not vested with power to condone delay in filing of appeal beyond 60 days as per first proviso to

Section 7(7) of the Act – The Act is self-contained Act – Limitation Act does not apply – Appellate

Authority has rightly dismissed the appeal filed beyond prescribed limitation of 60 days – Writ petitionis dismissed.

72 dated 08th December, 2020: Text of Joint letter issued by 4 Officer’s Organisations, i.e., AIBOC,AIBOA, INBOC and NOBO dated 08.12.2020 requesting the Hon’ble Minister of Finance & CorporateAffairs, Government of India, to include Banking workforce along with those working inhealthcare, Police, Sanitary workers, etc. to inoculate them .

JUDICIAL VERDICT

For Petitioner: Mr. S.V. Shastri, AdvocateFor Respondent: Mr. V.S. Nail, Advocate C/R.

IMPORTANT POINTS

Appellate Authority is not vested with power tocondone delay in filing of appeal beyond 60 daysas per first proviso to section 7(7) of the Act.

The Payment of Gratuity Act, 1972 is a self-contained Act i.e., why the Limitation Act doesnot apply.

ORDER

G Narendar, J. 1. Heard the learned counsel forthe petitioner and the learned counsel for therespondent.

2. The point that falls for consideration for thedisposal of the instant writ petition is, whether theappellate authority was right in dismissing theappeal on the ground of appeal being belated byholding that the appellate authority is not vestedwith the power to condone the delay beyond 60 daysas provided under the proviso to subsection (7) ofSection 7 of the Payment of Gratuity Act, 1972 (for


EVERY HUMAN BEING IS THE AUTHOR OF HIS OWN HEALTH OR DISEASE

short, ‘the Act’).

3. The Appellate Authority after considering theissue, has found that the appeal has been filed onthe 178th day, rather there is delay of 178 days inpreferring the appeal and it has held that in termsof sub-section (7) of Section 7 of the Act, theappellate authority could have condoned the delayif the same was within 60 days. After the lapse of60 days, the appellate authority may condone thedelay for a further period of 60 days as providedunder the proviso to sub-section (7) of Section 7of the Act. The proviso to subsection (7) of Section7 of the Act reads as under:

“7. Determination of the amount ofgratuity.-

(1).......

(2)......

(7) Any person aggrieved by an order undersub-section (4) may, within sixty days fromthe date of the receipt of the order, preferan appeal to the appropriate Governmentor such other authority as may be prescribedby the appropriate Government in thisbehalf:

Provided that the appropriate Governmentor the appellate authority, as the case maybe, may, if it is satisfied that the appellantwas prevented by sufficient cause frompreferring the appeal within the said periodof sixty days, extend the said period by afurther period of sixty days.”

4. From a reading of the above, it is crystal clearthat the Appellate Authority is vested with the powerto condone the delay of additional 60 days overand above the 60 days period as provided undersub-section (7) of Section 7 of the Act, and hence,

in the opinion of this Court, the reasoning of theappellate authority cannot be found fault with.

5. Learned Counsel for the petitioner would placereliance on the ruling of the Apex Court in thecase of Superintending Engineer/Dehar PowerHouse Circle Bhakra Beas Management Board(Pw) Slapper & Others Vs Excise And TaxationOfficer, Sunder Nagar/Assession Authority,2019SCC ONLINE SC 1400, wherein the Apex Courtwas considering the scope of Section 48 of theHimachal Pradesh Value Added Tax Act, 2005, andwas pleased to hold that the Limitation Act wouldget attracted, and hence, it was pleased to holdthat the High Court erred in holding that whileexercising the revisional power under Section 48of the said Act. The Division Bench of HimachalPradesh High Court considering the provision ofSection 48(1) of the Act, held that it could notcondone the delay beyond the period of 90 daysas provided under sub-section (1) of Section 48of the said Act, and that the language containedin the provision excludes the applicability ofSection 5 of the Limitation Act.

6. From a reading of the provision, it is apparentthat it is not in pari materia with sub-section (7)of Section 7 of the Act, wherein the first provisoto sub-section (7) of Section 7 of the Act clearlymandates that the appropriate Government or theAppellate Authority as the case may be can extendthe said period by a further period of 60 days i.e.,the Appellate Authority could have extended thesaid period by an additional 60 days over andabove the 60 days provided under sub-section (7)of Section 7 of the Act.

7. From a reading of the first proviso, it isapparent that no discretion is vested in theAppellate Authority to invoke or enlarge thelimitation period. If that be so, the Act being aself-contained Act, question of applicability ofLimitation Act would not arise. In the considered


HE WHO SEEKS HAPPINESS BY HURTING WILL NEVER FIND IT

opinion of this Court, reliance on the ruling citedsupra by the learned Counsel for the petitioner isinapplicable in the light of the language employedin the statutory provisions.

8. Per contra, learned Counsel for the respondenthas placed reliance on the ruling of the co-ordinatebench of this Court rendered in W.P.No.35266/2011disposed off on 28.01.2013, whereby the learnedSingle Judge by placing reliance on the ruling ofthe Apex Court in the case of Commissioner ofCustoms & Central Vs M/s. Hongo India (P) Ltd.& Anr. (arising of SLP(C) No.18999/2007), heldthat the High Court has no power to condone thedelay beyond the prescribed period of 60 + 60days, contrary to the prescription of the statute.The learned Single Judge was also pleased to holdthat Article 226 of the Constitution of India couldnot be invoked to negate the statutory provisionproviding for limitation. This Court is in agreementwith the view expressed by the co-ordinate bench.

9. The said ruling came to be taken in appeal inW.A.No.5487/2013, wherein the Division Benchwas also pleased to affirm the same by holdingthat in view of the language employed in theproviso, there is no power to condone the delaybeyond 120 days and was pleased to affirm theorder of the learned Single Judge.

10. Learned Counsel for the respondent has alsoplaced reliance on the ruling of the Apex Courtrendered in the case of WARANGAL DISTRICTCO-OPERATIVE SOCIETY LTD. VS APPELLATEAUTHORITY UNDER PAYMENT OF GRATUITYACT, 1972 & OTHERS, (2002) 3 LLJ 616, whereinat paragraphs 8 & 9, the Apex Court has examinedthe applicability of Limitation Act in the light ofthe provision contained under Section 29 of theLimitation Act itself. The Apex Court has observedin paragraph 9 & 11 as under:

“9. Looking at the scheme of the Limitation

Act, Section 3 of the Act declares thatevery suit instituted, appeal preferred andapplication made after the periodprescribed for such institution, preference,etc., shall be dismissed. However, Section5 stipulates that any appeal or application,except the application under Order 21 ofthe Code of Civil Procedure, if filed beyondthe period of limitation prescribed underthe Limitation Act could still be admittedby the Court, if the Court is satisfied thatsuch an appellant or applicant hadsufficient cause for not preferring theappeal or not making the application withinthe prescribed period of limitation. Fromthe above two Sections, it appears that asuit filed beyond the prescribed period oflimitation is absolutely barred, but anappeal preferred beyond the period oflimitation prescribed could still beconsidered if the appellate Court issatisfied that such delay is by virtue of acause which was not within the control ofthe appellant. Section 29(2) of theLimitation Act reads as follows:

Where any special or local law prescribesfor any suit, appeal or application a periodof limitation different from the periodprescribed by the Schedule, the provisionsof Section 3 shall apply as if such periodwere the period prescribed by the Scheduleand for the purpose of determining anyperiod of limitation prescribed for any suit,appeal or application by any special or locallaw, the provisions contained in Sections 4to 24 (inclusive) shall apply only in so faras, and to the extent to which, they are notexpressly excluded by such special or locallaw.

An analysis of the above sub-section showsthat where a special period of limitation


DO NOT DWELL ON THE PAST OR FUTURE. CONCENTRATE ON THE PRESENT MOMENT

different from the one prescribed in theSchedule to the Limitation Act, 1963, isprescribed by any special or local law forthe purpose of filing the suit, appeal, orapplication, the bar contained underSection 3 shall apply and such a suit orapplication is required to be dismissed asif that such a special limitation is prescribedunder the Schedule to the Limitation Act. Itis further provided in the sub-section thatprovisions contained in Sections 4 to 24 ofthe Limitation Act shall apply to the caseswhere a special limitation is prescribed asmentioned above, to the extent to which theyhave not expressly excluded by such speciallocal law. Interpreting the scope of Section29(2), the Supreme Court in Shantilal M.Bhayani v. Shanti Bai, (supra), held that asthere was no specific exclusion ofapplication of the Limitation Act in the TamilNadu Buildings (Lease and Rent Control)Act, 1960, the appellate authority under theAct was entitled to invoke the powers underSection 5 of the Limitation Act and condonethe delay in preferring the appeal waspreferred beyond the period of speciallimitation prescribed under the Tamil NaduBuildings (Lease and Rent Control) Act.Obviously, their Lordships while decidingthe case had in mind the last clause ofSection 29 of sub-section (2) “they are notexpressly excluded “

10. xxx xxx

11. However, the difficulty in this case is that thelimitation prescribed under the Payment of GratuityAct, once again an enactment made by Parliamentis only 60 days for the purpose of preferring anappeal. Under the proviso to Section 7, sub-section(7), the appellate authority is empowered to “extend

the period” of limitation by another sixty days. Inother words, the appellate authority is empoweredto condone the delay to upper limit of another sixtydays beyond the prescribed period of limitation.No doubt, the Payment of Gratuity Act does notexpressly exclude the operation of the LimitationAct, but the fact remains that the Payment ofGratuity Act is of the year 1972 where theLimitation Act is of the year 1963. The settledprinciple of interpretation of statutes is that ifthere are two mandates by the SovereignLegislature, the later of the two shall prevail.Therefore, the fact that there was no expressexclusion of Section 5 of the limitation under thePayment of Gratuity Act makes no difference whileconstruing the scope of the power of the appellateauthority constituted under the Payment ofGratuity Act, to condone the delay in preferringthe appeals. The legal position enunciated by theSupreme Court in Shantilal M. Bhayani v. ShantiBai (supra), in my view, must be understood inthe context of the Limitation Act, 1963, and thespecial period of limitation, prescribed in anyother special or local law prior to the date of theenactment of the Limitation Act. It is worthwhilementioning that the Tamil Nadu Buildings (Leaseand Rent Control) Act, which is the subject matterof the issue before the Supreme Court in theabove case was of the year 1960.”

11. This Court after having examined the languageemployed in the proviso to sub-section (7) ofSection 7 of the Act, is of the considered opinionthat the application of Section 29 of the LimitationAct stands excluded. Hence, in the opinion of thisCourt, the order of the appellate authority cannotbe found fault with, and accordingly, petitionstands dismissed. No opinion is expressed on themerits of the matter and the petition is disposedoff on the short ground of limitation alone.


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