SUPREME COURT HAS HELD THAT EXTENSION OF PERIOD UP TO WHICH DELAY CAN BE CONDONED IS NOT THE SAME AS EXTENSION OF LIMITATION PERIOD

A Three Judge Bench of the #SupremeCourt comprising of the CJI SA Bobde and his companion Judges, Justices A.S. Bopanna and V. Ramasubramanian passed a Judgment dated September 18, 2020 in the case of Sagufa Ahmed & Ors. v. Upper Assam Plywood Products Pvt. Ltd. & Ors. Civil Appeal Nos. 30073008 of 2020 and held that any period beyond the #prescribedperiod, during which the Court or Tribunal has the discretion to allow a person to institute the proceedings, cannot be taken to be “prescribed period”.

In this case, the Appellants claimed that they held 24.89% of the shares of Upper Assam Plywood Products Private Limited (First Respondent). The Appellants moved the Guwahati Bench of NCLT for the winding up of the Company, which was dismissed vide an Order dated 25.10.2019. Thereafter, they applied for a certified copy of the NCLT dated 25.10.2019, on 21.11.2019. However, it was received by them on 19.12.2019. An appeal was supposed to be filed on or before 18.03.2020, however, the Appellants made a delay and the same was filed on 20.07.2020.

Therefore, an Appeal was filed along with an Application for Condonation of Delay on 20.07.2020. Subsequently, by an Order dated 04.08.2020, the Application for Condonation of Delay was dismissed by the National Company Law Appellate Tribunal (Appellate Tribunal) on the ground that the delay cannot be condoned beyond a period of 45 days. As a consequence, the Appeal was also dismissed. Hence, the Appellants moved the Apex Court, challenging the Order passed by the Appellate Tribunal dismissing the application for condonation of delay as well as the Appeal.

The Appellants made the following two contentions:

1. Firstly, that the Appellate Tribunal erred in computing the period of limitation from the date of the Order of the NCLT which is absolutely contrary to Section 421(3) of the Companies Act, 2013.
2. Secondly, that the Appellate Tribunal failed to take note of the Lockdown as well as the Order passed by this Hon’ble Court on 23.03.2020.

On the first contention, the Supreme Court observed that the Appellants received the copy of the Order on 19.12.2019, and they had a period of 45 days to file an appeal i.e. this period expired on 02.02.2020.

By virtue of proviso to Section 421(3), the Appellate Tribunal was empowered to condone the delay up to a period of 45 days. This extended period expired on 18.03.2020. The Bench observed that the nationwide Lockdown was imposed on 24.03.2020 and that the Appellants had sufficient time to file the appeal on or before 18.03.2020.

The Hon’ble Supreme Court of India vide Order dated 23.03.2020 in Suo Moto Writ Petition (Civil) No. 3 of 2020 extended the period of limitation for filing any proceeding w.e.f 15.03.2020 until further orders. Clarifying the same, the Apex Court said that the said Order extended only “the period of limitation” and not the period up to which delay can be condoned in exercise of discretion conferred by the Statute. The Apex Court opined that such an Order was passed for the benefit of the litigants who could not initiate proceedings within the period of limitation prescribed by general or special law due to the Pandemic and the Lockdown imposed in the country. Further, placing reliance on Section 10 of the General Clauses Act, 1897 and Section 4 of the Limitation Act, the Court held that the expression “prescribed period” cannot be construed to mean anything other than the period of limitation.

Hence, dismissing the Appeal, the Supreme Court held that extension of period up to which delay can be condoned is not same as extension of period of limitation. Thus, the Appellants cannot take the benefit of the Order dated 23.03.2020, which provided for extension of period of limitation only.

Suchitra Upadhyay

Associate

The Indian Lawyer