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Order extending period of limitation not applicable to the period upto which delay can be condoned

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

CIVIL APPEAL NOs.3007­3008 OF 2020 SEPTEMBER 18,  2020

A Bench consisting of CJI S.A.Bobde, Justice A.S.Bopanna and Justice V.Ramasubramanian held in a case that the order of the Supreme Court in extending the period of limitation applies only to the “Limitation Period” or the “Prescribed Period” and not to the period up to which the delay can be condoned

The appellants in the case hold 24.97 % share in the respondent company. Subsequently, the appellants filed application before the Guwahati bench of the NCLT, which was dismissed by the NCLT’s order dated 25.10.2019. The appellants then applied for a copy of the order on 21.11.2019 and the copy of the order was received by them on 19.12.2019. But the applicants filed a statutory appeal before the NCLT only on 20.07.2020 along with a condonation of delay.

By an order dated 8.4.2020, the NCLAT dismissed the application for condonation of delay on the ground that the Tribunal has no power to condone the delay beyond a period of 45 days. Consequently the appeal was also dismissed. It is against the dismissal of both the application for condonation of delay as well as the appeal, that the appellants approached the Supreme Court.

The 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 in Suo Motu Writ Petition (Civil) No.3 of 2020, extending the period of limitation for filing any proceeding with effect from 15.03.2020 until further orders.

(i) Contention 1:

The court while making references to Section 420 of the Companies Act, 2013 (order of tribunals), Rule 50 of the National Company Law Tribunal Rules, 2016 (Registry to send certified copy) and section 421(3) of the Companies Act, 2013 (Appeals from orders of Tribunals) observed the following:

if the appellants had chosen not to file a copy application, but to await the receipt of a free copy of the order in terms of Section 420(3) read with Rule 50, they would be perfectly justified in falling back on Section 421(3), for fixing the date from which limitation would start running. But the appellants in this case, chose to apply for a certified copy after 27 days of the pronouncement of the order in their presence and they now fall back upon Section 421(3).

Further, the court held,

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. This takes us to the second contention of the appellants.

(ii) Contention 2:

While making references to section 10 of the general clauses act (Computation of time) and section 4 of the Limitation Act (Expiry of prescribed period when court is closed) the court answered the second contention in the following words:

What was extended by the above 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 court also made reference to its judgment in Assam Water Supply and Sewerage Board v. Subash Projects and marketing Ltd, where the question of what is prescribed time was answered in the following words:

Section 2(j) of the 1963 Act when read in the context of Section 34(3) of the 1996 Act, it becomes amply clear that the prescribed period for making an application for setting aside arbitral award is three months. The period of 30 days mentioned in proviso that follows subsection (3) of Section 34 of the 1996 Act is not the 'period of limitation' and, therefore, not 'prescribed period' for the purposes of making the application for setting aside the arbitral award.

Therefore, the court said that 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. And the appeal was accordingly dismissed.

- Kalidharan



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