2017 (5) TMI 1791 - AT - Companies Law

Condonation of delay of more than 45 days in filing appeal - inherent power under Rule 11 of the NCLAT Rules 2016, to condone the delay - grievance of the appellant is that Registrar of the NCLAT has not made any endeavour to decline to register the appeal on failure to remove the defects within 7 days as prescribed under sub-clause (4) of Rule 26 - HELD THAT - As per the provisions of the NCLAT Rules 2016 read with Section 422 of the Companies Act 2013, if defects are not removed within 7 days and the defects are removed after 7 days i.e. beyond the period prescribed under the rules, the appeal is treated to be a fresh appeal. Such procedure is followed so that the appellants may get advantage of 'court fee' prescribed under the NCLAT Rules and may use the same 'paper book' which are generally voluminous. If the Registrar General would have refused to register the appeal after 7 days, as per clause (4) of Rule 26, the appellant would have filed a fresh appeal with fresh court fee with separate sets of paper book, separate affidavit, separate vakalatnama which would be disadvantageous to the appellants. Appeal was filed on 31st March 2017, and the defect was to be removed within 7 days i.e. by 7th April 2017. Therefore, no extension of time could have been granted even by the Registrar to remove the defects particularly when the Appellate court has no power to condone delay after 90 days of receipt of judgment which expired on 7th April 2017 in the present case. In the present case, curiously the applicant has not explained the delay and laches on his part. It has not explained that why the appeal was not filed within 45 days of receipt of the certified copy of the judgment i.e. by 21st February 2017. They have also not explained the delay for preferring the appeal for another 38 days i.e. till 31st March 2017 when it was filed - Though it was open to the applicant to file a petition before Appellate Tribunal with prayer to ignore the minor defects, no such application was filed by appellant. The appeal was taken back on 3rd April 2017 and they re-filed on 1st May 2017 i.e. beyond the period of 90 days from the date of receipt of judgment passed by Tribunal, when Appellate Tribunal had no jurisdiction to entertain the appeal. The unexplained delay on the part of the applicant and laches on his part show that applicant does not deserve exercise of inherent power - application dismissed.

Issues Involved:
1. Jurisdiction to condone delay beyond statutory limits.
2. Inherent powers of the Appellate Tribunal for review and recall of orders.
3. Procedural requirements and compliance under NCLAT Rules 2016.
4. Expeditious disposal of appeals under Section 422 of the Companies Act 2013.
5. Applicability of Supreme Court precedents on procedural and substantive review.

Issue-wise Detailed Analysis:

1. Jurisdiction to condone delay beyond statutory limits:
The primary issue was whether the Appellate Tribunal had jurisdiction to condone the delay beyond the statutory limit prescribed under Section 421 of the Companies Act 2013. The Tribunal noted that the appeal was filed with defects on 31st March 2017, and the defects were not removed within the stipulated seven days. The appellant sought condonation of a 54-day delay, but the Tribunal dismissed the appeal, stating it had no jurisdiction to condone delays beyond 45 days as per Section 421(3).

2. Inherent powers of the Appellate Tribunal for review and recall of orders:
The appellant argued that the Appellate Tribunal possessed inherent powers under Rule 11 of the NCLAT Rules 2016 to review and recall its order. The Tribunal examined the Supreme Court's decision in Indian Oil Corporation Ltd. v. Union of India, which distinguished between procedural review and review on merits. It concluded that procedural defects could be corrected to prevent abuse of process, but substantive review required statutory provision.

3. Procedural requirements and compliance under NCLAT Rules 2016:
The Tribunal scrutinized the procedural compliance under Rule 26 of the NCLAT Rules 2016. It noted that the appellant failed to remove the defects within the prescribed seven days, resulting in the appeal being treated as a fresh filing on 1st May 2017. The Tribunal emphasized that the Registrar's failure to decline registration did not benefit the appellant, as the appeal would still be subject to the same statutory limits.

4. Expeditious disposal of appeals under Section 422 of the Companies Act 2013:
The Tribunal highlighted the requirement for expeditious disposal of appeals under Section 422, which mandates disposal within three months from the date of filing. The Tribunal stressed that procedural delays, such as the appellant's failure to remove defects promptly, hinder the timely disposal of appeals, thereby contravening legislative intent.

5. Applicability of Supreme Court precedents on procedural and substantive review:
The Tribunal referred to the Supreme Court's decision in Union of India v. Popular Construction Company, which held that when the legislature prescribes a special limitation for appeals, courts cannot extend it beyond the specified period. The Tribunal applied this principle, concluding that it lacked jurisdiction to entertain the appeal beyond the extended period of 90 days from the receipt of the Tribunal's judgment.

Conclusion:
The Tribunal found no merit in the appellant's application for review and recall of the order. It emphasized that the appellant's unexplained delay and procedural non-compliance did not warrant the exercise of inherent powers. Consequently, the Interlocutory Application was dismissed with a cost of ?50,000 to be paid to the Library of the Appellate Tribunal.

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