2009 (9) TMI 575 - HC - Companies Law

Condonation of delay - whether the provisions of section 5 of the Limitation Act, 1963 are applicable to an appeal filed under section 10F of the Companies Act, 1956? Held that - Borrowing the language of the Hon ble Supreme Court in Popular Construction Co. s case 2001 (10) TMI 1044 - SUPREME COURT OF INDIA if there were any residual doubt on the interpretation of the language used in section 10F, the legislative intent behind the constitution of the Company Law Board and the object of insertion of section 10F would resolve the issue involved of curtailment of the Court s power with the exclusion of the operation of section 5 of the Limitation Act, 1963. In view thereof, the scheme of the Companies Act, 1956 as am ended from time to time surely supports the curtailment of the Court s powers by the exclusion of operation of section 5 of the Limitation Act, 1963. Thus the question of condoning delay in filing company appeal under section 10F of the Companies Act, 1956 does not arise and the said application is dismissed.

Issues Involved:
1. Applicability of Section 5 of the Limitation Act, 1963 to an appeal filed under Section 10F of the Companies Act, 1956.
2. Interpretation of the proviso to Section 10F regarding the limitation period for filing an appeal.
3. Legislative intent behind the constitution of the Company Law Board and the insertion of Section 10F.

Issue-wise Detailed Analysis:

1. Applicability of Section 5 of the Limitation Act, 1963:
The core issue is whether Section 5 of the Limitation Act, 1963, which allows for the condonation of delay, applies to appeals filed under Section 10F of the Companies Act, 1956. The applicant contended that Section 29(2) of the Limitation Act makes Section 5 applicable unless expressly excluded by the special or local law. The applicant argued that the language of Section 10F does not expressly exclude Section 5, unlike the Arbitration and Conciliation Act, 1996, which uses the phrase "but not thereafter" in Section 34(3). The respondent, however, argued that the phrase "not exceeding 60 days" in Section 10F implies an express exclusion of Section 5.

2. Interpretation of the Proviso to Section 10F:
The proviso to Section 10F allows for an appeal to be filed within a further period "not exceeding 60 days" if sufficient cause is shown. The applicant argued that this does not amount to an express exclusion of Section 5 of the Limitation Act. The respondent countered by citing the Supreme Court's decision in Union of India v. Popular Construction Co., which held that the phrase "but not thereafter" in Section 34(3) of the Arbitration and Conciliation Act, 1996, amounts to an express exclusion. The respondent argued that the phrase "not exceeding 60 days" in Section 10F similarly implies an express exclusion, making Section 5 inapplicable.

3. Legislative Intent and Scheme of the Companies Act:
The legislative intent behind the constitution of the Company Law Board and the insertion of Section 10F was to ensure speedy and efficient adjudication of disputes. The court noted that the Company Law Board was established to handle certain matters expeditiously, without being bound by the strict rules of evidence or the Code of Civil Procedure. The legislative intent was to restrict the right of appeal under Section 10F to questions of law only, to ensure early finality to issues. The court concluded that allowing the application of Section 5 of the Limitation Act would defeat this purpose and render the proviso to Section 10F otiose.

Conclusion:
The court held that the phrase "not exceeding 60 days" used in the proviso to Section 10F of the Companies Act, 1956, amounts to an express exclusion of Section 5 of the Limitation Act, 1963. Therefore, the court does not have the discretion to condone delays beyond the additional 60 days provided in the proviso. The application for condonation of delay was dismissed.

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