APPLICABILITY OF SECTION 5 OF LIMITATION ACT IN CONDONING THE DELAY IN FILING APPEAL BEFORE THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL

[Mr. M. GOVINDARAJAN]

Appeal under Companies Act, 2013

The Companies Act, 2013 (‘Act’ for short) provides for the establishment of National Company Law Tribunal and National Company Law Appellate Tribunal.  Section 421 of the Act provides for filing appeal before the National Company Law Appellate Tribunal against the order of National Company Law Tribunal by an aggrieved person.  Section 421(3) provides that the appeal is to be filed within forty five days from the date on which the order of the Tribunal is made available on the person aggrieved.  The appeal shall be filed in such form and such fees as may be prescribed.  The Appellate Tribunal may entertain an appeal after the expiry of the said forty five days from the date aforesaid, but within a further period not exceeding forty five days, if the Appellate Tribunal is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the limitation period.

Applicability of Limitation Act

Section 433 of the Act provides that the provisions of the Limitation Act, 1963 shall, as far as may be, apply to proceedings or appeals before the Tribunal or the Appellate Tribunal, as the case may be.

Condonation of delay beyond 90 days

In ‘Bengal Chemists & Druggists Association V. Kalyan Chowdhury’ – 2018 (2) TMI 487 - SUPREME COURT OF INDIA the appellant filed an appeal before the National Company Law Appellate Tribunal belatedly.  The Appellate Tribunal dismissed the appeal as not maintainable inasmuch as the appeal has been filed 9 days after the period of limitation of 45 days has expired and a further period of another 45 days has also expired.  Against this order the appellant filed the present appeal before the Supreme Court.

The appellant submitted the following before the Supreme Court-

• Section 421(3) of the Companies Act does not contain the language of section 34(3) proviso of the Arbitration Act, 1996 which contains the words ‘but not thereafter’
• In any case under section 433 of the Act, the provisions of the Limitation Act, 1963 shall, as far as may be, apply to appeals before the Appellate Tribunal.
• Therefore section 5 of the Limitation Act would be applicable to condone the delay beyond the period of 90 days.

The appellant relied on the following judgments-

• ‘Guda Vijayalakshmi V. Guda Ramachandra Sekhhara Sastry’ –1981 (3) TMI 260 - SUPREME COURT OF INDIA;
• ‘Dr. Pratap Singh V. Director of Enforcement, Foreign Exchange Regulation Act’ – 1985 (4) TMI 323 - Supreme Court Of India;
• ‘Mangu Ram V. Municipal Corporation of Delhi’ – 1975 (10) TMI 102 - SUPREME COURT.

The Supreme Court analyzed the provisions of section 421(3) and section 433 of the Act.  The Supreme Court observed that a cursory reading of section 421 (3) makes it clear that the proviso provides a period of limitation different from that provided in the Limitation Act.  It also provides a further period not exceeding 45 days only if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.  Section 433 cannot come to the aid of the appellant because of the provisions of the Limitation Act only apply ‘as far as may be’.  Where there is a special provision in an act, section 5 of the Limitation Act obviously cannot apply.

The Supreme Court held that 45 days is the period of limitation and a further period not exceeding 45 days is provided only if sufficient cause is made out for filing the appeal within the extended period.  According to the Supreme Court this is a per emptory provision, which will otherwise be rendered completely ineffective, if the submissions of the appellant are accepted.  It would mean that the further period of 45 days had elapsed, the Appellate Tribunal may, if the facts so warrant, condone the delay, according to the appellant.  This would be to render otiose the second time of 45 days, which is peremptory in nature.

The Supreme Court relied on the following judgment to substantiate its decision as above.

• In ‘Chhattisgarh SEB V. Central Electricity Regulatory Commission’ – 2010 (4) TMI 1031 - SUPREME COURT, the issue that arose before the Supreme Court was whether section 5 of the Limitation Act can be invoked for allowing the aggrieved person to file an appeal beyond 60 days plus the further grace period of 60 days.

Section 125 of the Electricity Act lays down that any person aggrieved by any decision or order of the Tribunal can file an appeal to this court within 60 days from the date of communication of the decision or order of the Tribunal.  The proviso to section 125 empowers the Court to entertain an appeal filed within a further period of 60 days if it is satisfied that there was sufficient cause for not filing appeal within the initial period of 60 days.  This shows that the period of limitation prescribed for filing appeals under sections 111(2) and 125 is substantially different from the period prescribed under the Limitation Act for filing suits etc.,  the use of the expression ‘within a further  period not exceeding 60 days’ in the proviso to section 125 makes it clear that the outer limit for filing an appeal is 120 days.  There is no provision in the Act under which the Supreme Court can entertain an appeal filed against the decision or order of the Tribunal after more than 120 days.

The Supreme Court also analyzed the judgments relied on by the appellant.  In ‘Guda Vijayalaksmi’ case (supra) a transfer petition was filed under section 25 CPC before the Supreme Court.  A preliminary objection was raised that in view of sections 21 and 21A of the Hindu Marriage Act, 1955, section 25 would not be applicable.  This objection was rejected by the Supreme Court holding that section 21 would not apply to substantive provisions of the Code as apart from the procedural provisions.  Section 21A of the Hindu Marriage Act only dealt with transfer in certain cases.  The Supreme Court held that this judgment will not be applicable to the appellant’s case.  The proposition sought to be canvassed by the appellant is that section 5 of the Limitation Act would continue to apply even after a second period of 45 days is peremptorily laid down.   The Supreme Court held that this judgment relied on by the appellant would not be applicable to his case.

The Supreme Court analyzed the second case law relied on by the appellant in ‘Dr. Pratap Singh’ (supra).  In this case section37 of FERA, 1973 was involved.  Section 37(2) provides that the provisions of the Code relating to searches shall, so far as may be, apply to searches directed under Section 37(1).  The Supreme Court, in this case, held that the expression ‘so far as may be’ has always been construed to mean that those provisions may generally be followed to extent possible.  To give full meaning to the expression ‘so far as may be’ section 37(2) should be interpreted to mean that broadly the procedure relating to search as enacted in section 165 should be followed.  The Supreme Court held that the ratio of the judgment in the above said case is concerned is that the expression ‘so far as may be’ only means to the extent possible.  If not possible, obviously the Limitation Act would not apply.  The Supreme Court held that it is not possible for section 5 of the Limitation Act would apply given the peremptory language of section 421(3).

The Supreme Court analyzed the third case law relied on by the appellant in ‘Mangu Ram’ (supra).   In this judgment section 417 of Code of Criminal Procedure, 1898 provided for special leave to appeal from an order of acquittal.    Section 417(4) required that the application for special leave should be made before the expiry of 60 days from the date of the order of acquittal.  Applying section 29(2) of the Limitation Act, the Supreme Court held that section 5 of the Limitation Act would not be impliedly excluded in such case despite the mandatory and peremptory language contained in section 417(4) of the Cr.PC.  The Supreme Court held that all periods of limitation are cast in such mandatory and peremptory language and section 5 could not be said to be impliedly excluded.  The Supreme Court distinguished this judgment.

The Supreme Court also considered the submissions of the appellant on the difference between the expression used in the Arbitration Act and its absence in section 421 (3).  The Supreme Court held that in view of the above discussions this would also make no difference in view of the language of the proviso to section 421(3) which contains mandatory or peremptory negative language and speaks 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.

The Supreme Court, therefore, dismissed the appeal.