2020 (9) TMI 713 - SC - Companies Law

Condonation of delay in filing appeal - power to condone the delay beyond a period of 45 days - appellants admittedly received the certified copy of the order on 19.12.2019, they chose to file the statutory appeal before NCLAT on 20.07.2020 - Winding up of Company - contentions raised by the learned counsel for the appellants are twofold namely (i) that the Appellate Tribunal erred in computing the period of limitation from the date of the order of the NCLT, contrary to Section 421(3) of the Companies Act, 2013, and (ii) that the Appellate Tribunal failed to take note of the lockdown as well as the order passed by this Court on 23.03.2020, extending the period of limitation for filing any proceeding with effect from 15.03.2020 until further orders - Section 420(3) of the Companies Act, 2013. Computation of period of limitation from the date of the order of the NCLT - Section 421(3) of the Companies Act, 2013 - HELD THAT - From 19.12.2019, the date on which the counsel for the appellants received the copy of the order, the appellants had a period of 45 days to file an appeal. This period expired on 02.02.2020 - By virtue of the proviso to Section 421(3), the Appellate Tribunal was empowered to condone the delay upto a period of period of 45 days. This period of 45 days started running from 02.02.2020 and it expired even according to the appellants on 18.03.2020. The appellants did not file the appeal on or before 18.03.2020, but filed it on 20.07.2020. It is relevant to note that the lock down was imposed only on 24.03.2020 and there was no impediment for the appellants to file the appeal on or before 18.03.2020. To overcome this difficulty, the appellants rely upon the order of this Court dated 23.03.2020. Failure to take note of the lockdown as well as the order passed by this Court on 23.03.2020, extending the period of limitation for filing any proceeding with effect from 15.03.2020 until further orders - HELD THAT - What was extended by the order of this Court was only the period of limitation and not the period upto which delay can be condoned in exercise of discretion conferred by the statute. The above order passed by this Court was intended to benefit vigilant litigants who were prevented due to the pandemic and the lockdown, from initiating proceedings within the period of limitation prescribed by general or special law. It is needless to point out that the law of limitation finds its root in two latin maxims, one of which is Vigilantibus Non Dormientibus Jura Subveniunt which means that the law will assist only those who are vigilant about their rights and not those who sleep over them. The expression prescribed period appearing in Section 4 cannot be construed to mean anything other than the period of limitation. Any period beyond the prescribed period, during which the Court or Tribunal has the discretion to allow a person to institute the proceedings, cannot be taken to be prescribed period . The appellants cannot claim the benefit of the order passed by this Court on 23.03.2020, for enlarging, even the period up to which delay can be condoned - The second contention is thus untenable. Appeal dismissed - decided against appellant.

Summary

Issues:
Challenging NCLAT's order dismissing application for condonation of delay and appeal as time-barred.

Analysis:
The appellants hold 24.89% shares of a company and moved an application for winding up, dismissed by NCLT on 25.10.2019. They applied for a certified copy on 21.11.2019, received on 19.12.2019, but filed appeal on 20.07.2020. NCLAT dismissed the appeal and condonation application on 04.08.2020 due to delay beyond 45 days. Appellants argued NCLAT erred in computing limitation period from NCLT's order date and failed to consider lockdown and SC's order extending limitation period.

Contention1:
Section 421(3) mandates filing appeal within 45 days from copy receipt. Appellants were entitled to a free copy but applied after 27 days. Limitation started from 19.12.2019, expiring on 02.02.2020. NCLAT could condone delay up to 45 days, expiring on 18.03.2020. Appellants filed on 20.07.2020, after lockdown on 24.03.2020. Court held the delay in filing appeal from 19.12.2019 was unjustified.

Contention2:
Appellants relied on SC's order extending limitation period due to COVID-19. Court clarified the order extended only the period of limitation, not the condonable delay period. Referring to General Clauses Act and Limitation Act, it emphasized the distinction between the prescribed period (limitation) and the period for condonation. Citing a case, the Court explained the difference between the prescribed period and the period for condonation. Appellants' reliance on SC's order to extend the condonable delay period was rejected.

In conclusion, the Court dismissed the appeals as the appellants failed to file the appeal within the prescribed limitation period and could not rely on the SC's order to extend the period for condonation of delay beyond the statutory limit.