2017 (11) TMI 1238 - AT - Companies Law

Condonation of delay - reasons for delay - Held that - Only after rectification of the mistake a party is allowed to file an appeal. Thus the date of filing of the appeal being 16th June, 2017 which is beyond the further period of forty five days (total 90 days), the Appellate Tribunal has no jurisdiction to condone the delay. As suggested, if we treat the date of filing as 8th June, 2017, in such case also, we are not inclined to condone the delay as the explanation for delay in filing the appeal is not satisfactory. The appellants have not stated as to what the appellants were doing for one month between 13th March to 12th April, 2017 i.e. the date when the impugned order was passed and served and the uncle of 1st appellant died. Even their action for the subsequent period from 12th April, 2017 to 8th June, 2017 has not been explained. For the reasons aforesaid, the application for condonation of delay is rejected.

Summary

Issues:
- Appeal against rejection of application under Sections 397, 398, and 402 of the Companies Act, 1956.
- Application for condonation of delay in filing the appeal.

Analysis:
1. The appeal was filed against the order passed by the National Company Law Tribunal rejecting the application under Sections 397, 398, and 402 of the Companies Act, 1956. The appeal was filed beyond the prescribed period, and an application for condonation of delay was submitted along with the appeal.

2. The appellants provided reasons for the delay, citing the unexpected death of appellant No. 1's uncle, causing distress and turmoil. Appellant No. 1, who was the authorized representative, had to fulfill family obligations, leading to a delay in preparing and filing the appeal. Appellant No. 2 eventually filed the appeal after understanding the case intricacies, contributing to the delay.

3. The relevant provision, Section 421 of the Companies Act, 2013, allows for a 45-day period to file an appeal, extendable by an additional 45 days if sufficient cause is demonstrated. The appeal in this case was filed well beyond the initial 45-day period, with the defect being pointed out and rectified later.

4. Rule 26 of the National Company Law Appellate Tribunal Rules, 2016 outlines the procedure for filing appeals and rectifying defects. The rule mandates rectification of mistakes before filing an appeal. In this case, the appeal was filed beyond the extended period of 90 days, leaving no jurisdiction for condonation of the delay.

5. The Appellate Tribunal found the explanation for the delay unsatisfactory. The appellants failed to provide a satisfactory account of their actions during the period between the order date and the uncle's death, as well as the subsequent period. Consequently, the application for condonation of delay was rejected, and the appeal was dismissed as barred by limitation.

6. The judgment emphasized the importance of adhering to statutory timelines and providing valid reasons for seeking condonation of delay. The decision was based on the failure to provide a convincing explanation for the delay in filing the appeal, ultimately leading to its dismissal without costs.