The Hindu Business Line : Illegality and irregularity

The two expressions are to be distinguished on the touchstone of curability. While "illegality" goes against the very rule of law or jurisdiction, and cannot be condoned, "irregularity" is merely procedural and can be complied with subsequently without affecting the merits of a case. Thus "irregularity" must be construed somewhat liberally.

WHAT IS illegal cannot be condoned. Illegality makes an act or transaction null and void ab initio. On the other hand, irregularity is pardonable and the defect can be cured after giving an opportunity as dictated by the circumstances of each case. What is irregular generally pertains to non-compliance of certain procedures or technical mistakes that do not vitiate legal provisions.

The law relating to procedures is to be construed somewhat liberally so as to make it effective even retrospectively or retroactively. It is a well-settled principle of law that procedures are presumed to be retrospective, unless a construction is textually inadmissible. It is a settled canon of interpretation of procedural law that normally its non-adherence does not result in illegality, which would render the appeal incompetent, unless such non-compliance related to a substantive provision and had caused prejudice to the other party and may have the effect of taking away a settled right.

Law relating to procedure may not prove fatal to the proceedings initiated by the assessee and it would be in the interest of justice, fairness and equity to provide an opportunity to the assessee to rectify the irregularity committed in regard to compliance with the procedural rules.

In United Bank of India v. Naresh Kumar (1997; 90 Comp Cas 329; 1996; 6 S.C.C. 660), the Supreme Court held that procedural defects that do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party which has a just cause. As far as possible, a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.

In Hanamanthappa v. Chandrashekharappa (AIR 1997, S.C. 1307), the Supreme Court took the view that where a plaint was returned under Order 7, Rule 10-A, and presented in another court by making alterations to it, it was not materially altered without seeking permission of the Court and as such it ought not to be rejected under Order 8, Rule 10 of the Civil Procedure Code, but could be treated as a fresh plaint and the matter proceeded in accordance with law.

In a case under the Court Fees Act, it was held that even if the court is of the opinion that the plaintiff is liable to pay ad valorem court fee of a higher value than affixed on the plaint, justice would demand that an opportunity be granted to the person to make good the deficiency, rather than reject the plaint.

In Anil Rishi v. Gurbaksh Singh (AIR, 1999; P & H 121), it was held that having come to the conclusion that the plaintiff-respondent was liable to pay the ad valorem court fee, the necessary corollary thereof was whether the plaintiff would be entitled to pay the fee or the plaint was liable to be rejected. It is a settled principle of law that wherever or whenever the court comes to a conclusion that the plaintiff is liable to pay court fee higher than that set by the plaintiff, it must grant time to the plaintiff to make up the deficiency rather than rejecting the plaint right at the threshold for payment of inadequate court fee.

In a case where at the time of admission of the second appeal before the High Court, time was granted to the plaintiff to file a certified copy as soon as it was available, but the same was filed within seven days after obtaining some time and the appeal was dismissed by the High Court under Order 41, Rule 1(2) of the Code of Civil Procedure, the Supreme Court, in Jogdhayan v. Babu Ram (AIR, 1983; S.C. 57) directed that the provisions of Section 148 should have been dismissed without going into the merits of the case.

Substantial compliance with the rules of procedure has normally been accepted by the courts and the consistent view appears to be that the doors of adjudication should not be shut on an applicant at the very threshold of the proceedings, unless there is violation of the substantive provision resulting in settlement of rights of parties.

Applying this principle, the Supreme Court, in Ragu Thilak D. John v. S. Rayappan (AIR, 2001; S.C.W. 342; AIR, 2001; S.C. 699) while relying upon the judgments in L. J. Leach and Co. Ltd. v. Jardine Skinner and Co. (AIR, 1957; S.C. 357); Smt. Ganga Bai v. Vijay Kumar (AIR, 1974; S.C. 1126); and B. K. N. Pillai v. P. Pillai (AIR, 2000; S.C. 614), held that courts, while deciding such prayers, should not adopt a hyper-technical approach.

A liberal approach should be the general rule particularly in cases where the other side could be compensated with the costs. Technicalities of law should not be permitted to hamper the courts in the administration of justice between the parties. Amendments are allowed in the pleadings to avoid uncalled for multiplicity of litigation.

The aforesaid distinction was recently considered by the Delhi High Court in the case of Remfry and Sons v. C.I.T. (276 I.T.R. 1). In this case, the assessee firm filed a loss return for the assessment year 1978-79 but the Assessing Officer determined the taxable income of the assessee at Rs 9,46,713 and, after providing permissible deductions, and demanded tax on Rs 7,22,313. The Commissioner (Appeals) dismissed the appeal challenging the order, on the ground that it was not signed by a competent person in terms of Rule 45(2)(cc) of the Income-Tax Rules, 1962.

The Tribunal affirmed the view taken by the Commissioner (Appeals). On a reference, the Delhi High Court held that the irregularity committed by the assessee was curable and could be rectified on the date of its filing and even subsequent thereto, as the appeal was filed within the period of limitation. Hence, the orders passed by the Tribunal as well as the Commissioner (Appeals) were liable to be set aside.

The Court laid down that unless the non-compliance with the procedure is of such a nature that it necessarily creates a bar or takes away a substantive right vested in the other side, where the appeal is filed in accordance with the form but is only signed by an authorised representative and not by a specified person under Rule 45, the appellant should be granted an opportunity to correct this error rather than dismiss the appeal as not maintainable, particularly when the appeal is otherwise complete in all respects and has been filed within the prescribed period of limitation.

Thus, the basic distinction between the two expressions is the effect of its being curable or incurable.

Normally, an "illegality" which goes to the very root of the matter or jurisdiction could hardly fall in the class of those cases, but an "irregularity" is merely procedural and where it has even been substantially complied with, to bring such a case within the class of cases where irregularity is curable, would be a fair and just interpretation of the relevant rule.

(The author is a Mumbai-based advocate. He can be contacted atranina@bom2.vsnl.net.in)

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