Summary and Analysis of M/s Sethia Infrastructure Pvt Ltd vs Mafatlal Mangilal Kothari & Ors

1. Heading of the Judgment

M/s. Sethia Infrastructure Pvt. Ltd. vs. Mafatlal Mangilal Kothari & Ors.
(Supreme Court of India, Civil Appellate Jurisdiction, Civil Appeal arising from SLP(C) No. 22195 of 2025)

Citation

M/s. Sethia Infrastructure Pvt. Ltd. vs. Mafatlal Mangilal Kothari & Ors., (2025) INSC 985.

Judges

Rajesh Bindal and Manmohan, JJ.

Date

August 14, 2025.

2. Related Laws and Principles

The judgment involves:

• Section 5 of the Limitation Act, 1963:
  Governs condonation of delay in legal proceedings.

• Principles of Natural Justice:
  Right to a fair hearing and due process.

• Procedural Law:
  Restoration of appeals dismissed for non-prosecution.

3. Basic Judgment Details

• Parties:
  Appellant: M/s. Sethia Infrastructure Pvt. Ltd. (a developer claiming third-party rights in the disputed property).
  Respondents: Mafatlal Mangilal Kothari & Ors. (original plaintiffs in an eviction suit).

• Core Issue:
  Whether the Bombay High Court erred in condoning a delay of 5,250 days (≈14.3 years) in filing an application to restore a dismissed appeal, without hearing the affected parties.

• High Court’s Decision (Impugned):
  Allowed restoration of the appeal without hearing the appellant and without assigning reasons.

• Supreme Court’s Decision:
  Set aside the High Court’s order and remanded the case for fresh consideration.

4. Explanation of the Judgment

A. Factual Background

• Originating Dispute (1967):
  Respondents filed a suit (Original Suit No. 289 of 1967) for eviction from a property. The suit was dismissed in 1988.

• First Appeal (1988):
  Respondents filed First Appeal No. 1483 of 1988 against the dismissal.

• Dismissal for Non-Prosecution (2008):
  The High Court dismissed the appeal on 20.05.2008 due to the respondents' failure to file pleadings within the stipulated 3-month period (per order dated 20.02.2008).

• Application for Restoration (2022):
  Filed after 5,250 days (≈14.3 years) with a plea to condone the delay.

• High Court’s Order (2023):
  Allowed the application without hearing the appellant, relying solely on an affidavit of "private service" to assume notice was served.

B. Supreme Court’s Reasoning

1. Violation of Natural Justice:
   The High Court restored the appeal without hearing the appellant, despite the appellant’s interest as a developer who had acquired rights in the disputed property during the 14-year gap.
   The assumption of "private service" via an affidavit was insufficient to deny the appellant a hearing.

2. Failure to Consider Third-Party Rights:
   Critical Principle: When an application for restoration is filed after an inordinate delay, courts must presume that third-party rights may have been created.
   Here, the appellant (a developer) had begun construction on the disputed property during the 14-year period. Ignoring this violated equitable principles.

3. Lack of Reasoned Order:
   The High Court’s order was non-speaking (merely stating "reasons stated in the application" and citing a judgment).
   Condoning 14+ years of delay requires detailed justification, especially when third-party rights are affected.

4. Judicial Caution for Long Delays:
   Courts must be cautious in condoning extreme delays as "time does not stand still." Litigants cannot "wake up from slumber" only when property values rise or development begins.

C. Final Directions

1. High Court’s Order Set Aside:
   The order dated 25.10.2023 was quashed.

2. Remand for Fresh Hearing:
   The application for condonation of delay and restoration must be reheard by the High Court.
   The appellant (Sethia Infrastructure) must be heard as an affected party.
   The appellant may be impleaded formally if required.

3. Parties to Appear Before High Court:
   Directed to appear on 02.09.2025 for further proceedings.

D. Key Legal Principles Reiterated

• Third-Party Rights: Courts must presume that prolonged delays lead to creation of third-party rights.

• Reasoned Orders: Condoning massive delays demands detailed reasoning, not cryptic approvals.

• Natural Justice: No order affecting rights can be passed without hearing affected parties.

Key Takeaway:
The Supreme Court emphasized that condoning extreme delays (especially over a decade) requires rigorous scrutiny, protection of third-party rights, and adherence to natural justice. Litigants cannot indefinitely delay proceedings only to resurge when property values increase.