Extension given for period of limitation does not apply to ‘period upto which delay can be condoned’

Extension given for period of limitation does not apply to ‘period upto which delay can be condoned’ written by Isha Sawant student of Government Law College

Sagufa Ahmed v. Upper Assam Plywood Products Pvt. Ltd.

Facts:

 The appellant- Sagufa Ahmed, filed an appeal challenging the National Company Law Appellate Tribunal (NCLAT) order of dismissing and application for condoning delay along with an appeal and time barred. The appellants claimed to hold 24.8 9% share of the company- Upper Assam plywood product (respondent no. 1), and filed an application before the Guwahati bench of NCLT for winding up the company, this was dismissed by an order dated 25^th October 2019. They then applied for a certified copy of the NCLT order dated 25^th October 2019 on 21^st November 2019 however the copy of application was filed where is the date 22^nd November 2019 they then filed a statutory appeal before the NCLT on 20^thSeptember 2020. The NCLT by order dated 4^th August 2020 dismissed the application for condoning the delay on the ground that it has no power to condone delay beyond a period of 45 days, so the appeal was dismissed. Aggrieved by the decision of the NCLAT, the appellants have approached the Supreme Court.

Issues:

• Whether the appellant can get extension for filing an appeal for condoning delay after expiry of period of limitation.
• Whether the extension granted by the Supreme Court on ‘period of limitation’ would apply for condonation of delay beyond the prescribed period.

Legal Provisions:

• Companies Act, 2013, Section 421- Appeal from orders of Tribunal
• General Clauses Act, 1897 Section 10- Computation of time.

Appellant’s Contention:

The appellant raised a two fold contention- first, the Appeal Tribunal erred in computing the period of limitation from the date of the NCLAT order which is contrary to section 421(3) of the Companies Act of 2013; and Secondly, the Appellate Tribunal did not consider lockdown as well as the order of the Supreme Court dated 23^rd March 2020 extending the period of limitation from filing any proceeding with effect from 15^th. March 2020 till further orders.

Observations of the Court:

The case was heard before the Supreme Court Bench of S.A. Bobde, CJI, A.S. Bopanna and V. Balasubramanian. The court noted that sec-240(3) of the Companies Act 2013 mandates the in NCLT to send a copy of every order passed under Section 420(1) to all the parties concerned, and Section 420(3) mandates a tribunal to send a copy of every order passed under the section to all parties concerned. NCLT rule 50 mandates the registry of NCLT to send a certified copy of the final order to all parties concerned. It also enables the registry to send certified copies with costs as per schedule of fees to persons who are not parties. Section 421(1) provides for an appeal before the Appeal Tribunal against order of NCLT, subsection (3) lays down the period of limitation for filing an appeal and makes provision conferring limited discretion upon the Appellate Tribunal to condone the delay.

The court so noted that the appellant’s contention of period of limitation prescribed under Section 421(3) starts from the date on which the certified copy of the Tribunal’s order is received by the aggrieved person, to be correct. Therefore, the appellant awaiting the receipt of free copy of order were justified in filing an application under Section 421(3), for fixing the date from which the period of limitation would start, however, in the present case, appellant applied for a certified copy 27 days after the order was announced in their presence. The court did not hold this fact against the appellant, but noted that form 19^th December 2019, the date on which they received a certified copy of the order, the period of limitation began. They noted that the appellant had 45 days to file an appeal which expired on 2^nd February 2020. The court observed that the Appellate Tribunal was empowered u/s- 421(3) to condone the delay of period of up to 45 days, this period of 45 days started from 2^nd February 2020 and expired on 18^th March 2020, as agreed by the appellant.

However, the appellant filed an appeal on 20^th July 2020 instead of doing so before 18^th March 2020. It was stated that to be relevant the lockdown was imposed on 24^th March 2020 and that there was no obstacle to the opponent to file an appeal on or before 18^th March 2020. For this difficulty, the appellant relied on the order of the Supreme Court dated 23^rd March 2020. The court noted that the appellant cannot take refuge under that order as it was only applicable to the ‘period of limitation’ and not on the ‘period up to which delay be condoned in exercise of discretion conferred by the statue’. The court observed that the said order was for the benefit of vigilant litigants prevented by the pandemic and lockdown from initiating proceedings within the period of limitation prescribed by general or special law. The court went through the meaning of the words ‘prescribed period’ as the period of limitation for filing any application, suit or appeal as per the schedule.

Judgement:

The court held that the appellant cannot claim the benefit of the Supreme Court order dated 23^rd March 2020, for enlarging the period upto which delay can be condoned. The second contention was held to be unjustifiable and untenable. The appeals were held liable to be dismissed.