2018 (2) TMI 487 - SC - Companies Law

Condonation of delay of 9 days - Section 5 of the Limitation Act - application to the peremptory language of Section 421(3) of the companies act, 2013 - period of limitation - appeal against the order of NCLT - Held that - In the present case, the Section 417(3) does not merely contain the initial period of 45 days, Section 417(3) goes on to state that another period of 45 days, being a grace period given by the legislature which cannot be exceeded, alone would apply, provided sufficient cause is made out within the aforesaid grace period. As has been held by us above, it is the second period, which is a special inbuilt kind of Section 5 of the Limitation Act in the special statute, which lays down that beyond the second period of 45 days, there can be no further condonation of delay. In view of the language of the proviso to Section 421(3) which contains mandatory or peremptory negative language and speaks of a second period not exceeding 45 days, which would have the same effect as the expression but not thereafter used in Section 34(3) proviso of the Arbitration Act, 1996. If we were to accept such argument, it would mean that notwithstanding that the further period of 45 days had elapsed, the Appellate Tribunal may, if the facts so warrant, condone the delay. This would be to render otiose the second time limit of 45 days, which, as has been pointed out by us above, is peremptory in nature. - Decided against the appellant.

Summary

Issues:
1. Appeal against order of National Company Law Appellate Tribunal dismissed as not maintainable due to delay.
2. Interpretation of Section 421(3) and Section 433 of the Companies Act, 2013 regarding limitation and applicability of Section 5 of the Limitation Act.
3. Comparison with judgments in similar cases under different statutes.
4. Applicability of Section 5 of the Limitation Act in special provisions of the Companies Act, 2013.

Analysis:
1. The appeal before the Supreme Court challenged the dismissal by the National Company Law Appellate Tribunal due to delay in filing. The Tribunal dismissed the appeal as not maintainable because it was filed 9 days after the initial 45-day limitation period and a further 45-day period had also expired.
2. The appellant's counsel argued that Section 421(3) of the Companies Act, 2013, does not contain language similar to the Arbitration Act, 1996, and that Section 433 of the Act allows for the application of the Limitation Act, 1963, including Section 5 to condone delays beyond 90 days. However, the Court found that the special provision in Section 421(3) prevails over the general provisions of the Limitation Act.
3. The Court referred to the judgment in Chhattisgarh SEB v. Central Electricity Regulatory Commission, which held that special provisions like Section 125 of the Electricity Act, 2003, do not allow for the invocation of Section 5 of the Limitation Act beyond the specified time limits. The Court also distinguished other judgments cited by the appellant that were not applicable in the present case.
4. It was emphasized that the second 45-day period provided in Section 421(3) is peremptory and cannot be extended beyond, even with the application of Section 5 of the Limitation Act. The absence of specific language as in the Arbitration Act, 1996, does not affect the mandatory nature of the provision. Consequently, the Court upheld the dismissal of the appeal, finding no reason to interfere with the Tribunal's judgment.