SC Order Extending Limitation Order Does Not Enlarge The Period Upto Which Delay Can Be Condoned In Exercise Of Statutory Discretion: SC

     While clarifying its March 23 order most recently on September 18, 2020 in a latest, landmark and laudable judgment titled Sagufa Ahmed & Ors vs. Upper Assam Plywood Products Pvt. Ltd. & Ors. in Civil Appeal No. 30073008 of 2020, a three Judge Bench of the Supreme Court comprising of CJI Sharad A Bobde, Justice V Ramasubramanian and Justice AS Bopanna observed clearly, categorically and convincingly that the said order extended only “the period of limitation” and not the period upto which delay can be condoned in exercise of discretion conferred by the statute. The Apex Court held that the expression “prescribed period” appearing in Section 4 of the Limitation Act cannot be construed to mean anything other than the period of limitation. It explicitly, elegantly and effectively held that the appellant cannot claim the benefit of the order for enlarging even the period up to which delay can be condoned.

To start with, this noteworthy judgment authored by Justice V Ramasubramanian for himself, CJI Sharad Arvind Bobde and Justice AS Bopanna first and foremost mentions in para 1 that, “Challenging an order passed by the National Company Law Appellate Tribunal (hereinafter referred to as ‘NCLAT’) dismissing an application for condonation of delay as well as an appeal as time barred, the appellants have come up with the above appeals.”

To put things in perspective, it is then stated in para 3 that, “The appellants herein together claim to hold 24.89% of the shares of a company by name Upper Assam Plywood Products Private Limited, which is the first respondent herein. The appellants moved an application before the Guwahati Bench of the National Company Law Tribunal (hereinafter referred to as ‘NCLT’) for the winding up of the company. The said petition was dismissed by the NCLT by an order dated 25.10.2019.”

It would be pertinent to mention here that para 6 then brings out that, “Though the appellants admittedly received the certified copy of the order on 19.12.2019, they chose to file the statutory appeal before NCLAT on 20.07.2020. The appeal was filed along with an application for condonation of delay.”

As it turned out, para 7 then elucidates that, “By an order dated 04.08.2020, the Appellate Tribunal 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 have come up with the present appeals.”

By the way, regarding the contentions of the appellant, it is then divulged in para 8 that, “The contentions raised by the learned counsel for the appellants are two-fold 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.”

Needless to say, para 13 then states that, “Therefore, it is true, as contended by the appellants, that the period of limitation of 45 days prescribed in Section 421(3) would start running only from the date on which a copy of the order of the Tribunal is made available to the person aggrieved. It is also true that under Section 420(3) of the Act read with Rule 50, the appellants were entitled to be furnished with a certified copy of the order free of cost.”

Of course, para 14 then further states that, “Therefore, 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).

Notwithstanding to what has been stated above, it is then postulated in para 15 that, “Despite the above factual position, we do not want to hold against the appellants, the fact that they waited from 25.10.2019 (the date of the order of NCLT) upto 21.11.2019, to make a copy application. But at least from 19.12.2019, the date on which a certified copy was admittedly received by the counsel for the appellants, the period of limitation cannot be stopped from running.”

In addition, it is then disclosed in para 16 that, “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.”

Be it noted, it is then pointed in para 17 that, “By virtue of the proviso to Section 421(3), the Appellate Tribunal was empowered to condone the delay upto a 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 appellant 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 lockdown 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.”

More significantly, it is then illustrated in para 18 that, “To get over their failure to file an appeal on or before 18.03.2020, the appellants rely upon the order of this Court dated 23.03.2020 in Suo Motu Writ Petition (Civil) No. 3 of 2020. It reads as follows:

“This Court has taken Suo Motu cognizance of the situation arising out of the challenge faced by the country on account of Covid-19 Virus and resultant difficulties that may be faced by litigants across the country in filing their petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws (both Central and/or State).

To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunals across the country including this Court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings.

We are exercising this power under Article 142 read with Article 141 of the Constitution of India and declare that this order is a binding order within the meaning of Article 141 on all Courts/Tribunals and authorities.

This order may be brought to the notice of all High Courts for being communicated to all subordinate Courts/Tribunals within their respective jurisdiction.

Issue notice to all the Registrar Generals of the High Courts, returnable in four weeks.””

Most significantly and most remarkably, it is then enunciated in para 19 that, “But we do not think that the appellants can take refuge under the above order. 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.”

Finally, it is then held in the last para 25 that, “Therefore, 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. The second contention is thus untenable. Hence the appeals are liable to be dismissed. Accordingly, they are dismissed.”

To conclude, the three Judge Bench of the Apex Court which includes the CJI also has thus made the legal position on this explicitly clear! The said Supreme Court order extending limitation order does not enlarge the period upto which delay can be condoned in the exercise of statutory discretion! There can be no denying it also!

Sanjeev Sirohi

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