Supreme Court on Limitation Period for Appeal from NCLAT

0
483

February 09, 2018

Case name: Bengal Chemists & Druggists Association v. Kalyan Chowdhury

Date of Judgment: February 02, 2018

In the instant case, the appeal was preferred against National Company Law Appellate Tribunal (NCLAT) order wherein the NCLAT dismissed the appeal as not maintainable on the ground that 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 had also expired.

Provision of appeal under the Companies Act, 2013 –Here it would be pertinent to mention that Section 421(3) of the Companies Act, 2013 provides for appeals from orders of Tribunal and states that an appeal shall be filed within a period of 45 days from the date on which a copy of the order of the Tribunal is made available to the person aggrieved,. The proviso to Section 421(3) of the Companies Act, 2013 enumerates that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days from the date aforesaid, but within a further period not exceeding forty-five days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.

In appeal before the Supreme Court, the Appellant has contended that in view of Section 433 of Companies Act (it provides that provisions of the Limitation Act shall, as far as may be, apply to proceedings or appeals before the Tribunal or the Appellate Tribunal) the provisions of the Limitation Act apply to the case and hence Section 5 of the Limitation Act  would be applicable to condone the delay beyond the period of 90 days.

Bench’s Verdict

The Bench in the case refused to interfere with NCLAT’s impugned order and made the following observations:

  • That a cursory reading of Section 421(3) of the Companies Act, 2013 makes it clear that the proviso provides a period of limitation different from that provided in the Limitation Act, and 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.
  • That Section 433 of Companies Act cannot come to the aid of the appellant because the provisions of the Limitation Act only apply “as far as may be”. In a case like the present, where there is a special provision contained in proviso to Section 421(3) of the Companies Act, 2013. Hence, Section 5 of the Limitation Act cannot apply.
  • That the second period of grace in proviso to Section 421(3) of the Companies Act, 2013 , 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.
  • While pronouncing its verdict, the Supreme Court relied on the case of Chhattisgarh SEB v. Central Electricity Regulatory Commission[1]. In this case appeal provision under Section 125 of the Electricity Act, 2003 was in issue. With reference to the instant case, the Court opined that the language of Section 125 of Electricity Act was similar to the language contained in Section 421(3) of the Companies  Act, 2013. In that case also the issue that came up for consideration was whether Section 5 of the Limitation Act could be invoked for allowing the aggrieved person to file an appeal beyond 60 days plus the further grace period of 60 days. The Apex Court in the case held that Section 5 of the Limitation Act couldn’t apply to Section 125 of the Electricity Act.

The case can be accessed here.

[1] 2010 (5) SCC 23