The Supreme Court on Friday expressed displeasure over its own 1987 judgment in Collector, Land Acquisition v. Katiji, observing that the decision, which condoned a delay of merely four days, had driven the country backwards because litigants have since repeatedly relied on it to seek condonation of delay.
A Bench of Justices Dipankar Datta and Sheel Nagu made the observation while dismissing appeals filed by Karvy Stock Broking Limited and its former Chairman and Managing Director C Parthasarathy against Securities Appellate Tribunal (SAT) orders refusing to condone delays in challenging penalties imposed by the Securities and Exchange Board of India (SEBI).
"Our nation has been driven back because of the decision in 1987, when for condoning a delay of only four days, this Court wrote about 15–16 pages. And that is the decision in Collector, Land Acquisition v. Katiji, which has now been used so long as if this is the panacea for all ills in condonation of delay applications," the Bench remarked.
In its 1987 judgment, the Supreme Court advocated a liberal approach to condonation of delay, holding that substantial justice should prevail over technical considerations.
The Court observed that the judgment had subsequently been treated as a general justification for condoning delays in legal proceedings. It also referred to subsequent Supreme Court judgments, including Sheo Raj Singh, and emphasised that different considerations apply when a court itself exercises discretion to condone delay and when an appellate court reviews another forum's exercise of discretion.
It also clarified that regulatory authorities and private litigants would be treated equally in matters involving delayed appeals.
"We will be equally harsh with the SEBI when it comes up before us with time-barred appeals. We will not recognize any distinction between a private litigant or a public litigant or a government...From now onwards, you will come in time," the Court remarked.
The dispute arose from SEBI's April 28, 2023 order concerning the misuse of clients' securities by Karvy Stock Broking. SEBI found that Karvy had misused clients' securities to raise funds and diverted approximately ₹1,442.95 crore to related group companies. The regulator imposed penalties of ₹13 crore on Karvy and ₹8 crore on Parthasarathy, besides restraining both from accessing the securities market for seven years.
On September 9, 2026, the SAT refused to condone the delays in filing their appeals. The Supreme Court's dismissal leaves those orders undisturbed without examining the merits of SEBI's findings.
The appellants were represented by Senior Advocates Mukul Rohatgi and Balbir Singh.
SEBI was represented by Additional Solicitor General N Venkataraman.