2017 (12) TMI 1871 - SC - Companies Law

Condonation of delay in filing appeal - appeal lodged on 8th June, 2017 to be considered to be within the extended 45 days period or not - HELD THAT - On the facts of the present case, it is clear that within a period of seven days, the defect pointed out was cured. This being the case, it is clear that the initial date of lodgement of the appeal is the date on which the appeal should be considered as filed, even though an appeal number may be given to the appeal subsequently. The NCLAT's judgment deserves to be set aside, and the appeal that was lodged on 8th June, 2017 must be considered to be within the extended 45 days period. The NCLAT has also noticed that no sufficient cause was made out to condone the delay that falls within the second 45 days period. This is incorrect inasmuch as the appellant has pleaded that as a result of the death of his uncle, the appellant was unable to process the appeal within the initial 45 days and that, therefore, he should be said to have made out sufficient cause to condone the delay of 42 days. Appeal allowed.

Summary

Issues:
- Calculation of limitation period for filing an appeal before the National Company Law Appellate Tribunal (NCLAT)
- Interpretation of Rule 26 of the NCLAT Rules of 2016 regarding the filing and scrutiny of appeals
- Consideration of sufficient cause for condonation of delay in filing the appeal

Calculation of Limitation Period:
The Supreme Court considered the timeline for filing an appeal before the NCLAT based on the National Company Law Tribunal's judgment date. The appellant filed an appeal within the initial 45 days period, and subsequently, defects in the appeal were rectified within four days of notification. The NCLAT, however, held the appeal out of time, as per Rule 26 of the NCLAT Rules, due to the defects being rectified after the second 45-day period. The Court analyzed the Rules to determine the date of lodgment of an appeal and emphasized that curing defects within seven days should be considered as the date of filing the appeal, even if an appeal number is assigned later. Consequently, the Court set aside the NCLAT's judgment, deeming the appeal filed within the extended 45 days period.

Interpretation of Rule 26 of NCLAT Rules:
The Court delved into the interpretation of Rule 26 of the NCLAT Rules, focusing on the process of filing and scrutiny of appeals. It highlighted that the date of appeal lodgment is crucial, as indicated by the date stamp and diary number assigned upon receipt. The Rules specify procedures for defective appeals, including returning them for compliance and subsequent actions by the Registrar. The Court clarified that the Registrar has discretion to condone delays beyond seven days for rectification, emphasizing that the appeal should be considered filed upon curing defects within the stipulated time frame.

Consideration of Sufficient Cause for Condonation:
Regarding the appellant's plea for condonation of delay due to the death of a family member, the Court found that sufficient cause was indeed established. The appellant's inability to process the appeal within the initial 45 days period was attributed to this reason. The Court disagreed with the NCLAT's assessment that no sufficient cause was made out, emphasizing that the circumstances warranted condonation of the delay. Consequently, the Court set aside the NCLAT's judgment based on the established sufficient cause for the delay.

In conclusion, the Supreme Court allowed the appeal, overturning the NCLAT's decision and disposing of any pending applications. The detailed analysis covered the calculation of the limitation period, interpretation of Rule 26 of the NCLAT Rules, and the consideration of sufficient cause for condonation of delay, ensuring a comprehensive review of the legal issues involved in the judgment.