The Supreme Court has held that the Company Law Board (CLB), being a quasi-judicial body without any express statutory power to condone delay, acted without authority in condoning the 249-day delay in filing the appeal under Section 58(3) of the Companies Act, 2013. The Court held that Section 433 of the Companies Act, 2013, which empowers the NCLT/NCLAT to apply the Limitation Act, 1963, cannot be given retrospective effect to empower the CLB.
Finding that the legislature has consciously timed the enactment of Section 433 to coincide with the constitution of the NCLT, indicating an intent not to confer similar powers on the CLB, the Apex Court pointed out that the respondent’s remedy was already time-barred under the Erstwhile Act (deadline was June 30, 2013) even before Section 58 of the Act, 2013 came into force on September 12, 2013. Essentially, new law of limitation cannot revive a ‘dead remedy’.
A Two-Judge Bench of Justice J. B. Pardiwala and Justice R. Mahadevan found that Section 58(3) is a simpliciter provision prescribing a mandatory period of limitation, and the absence of negative words like “but not thereafter” does not make the period directory. Since the appeal under Section 58(3) was before the CLB (a quasi-judicial body), Section 29(2) of the Act, 1963 (the savings clause) is not attracted.
Therefore, the question of “express exclusion” of Section 5 does not arise; rather, what is required is an “express inclusion” of such a power, which was absent, added the Bench.
The Bench reiterated the established legal principle that the Act, 1963 applies only to ‘courts’ and not to quasi-judicial bodies or tribunals, unless a special statute expressly confers such power. The application of the Act is “body/forum specific”. The Bench stated that the CLB, constituted under Section 10E of the Erstwhile Act, was a ‘court’ only in a restricted sense for limited purposes (e.g., discovery, examining witnesses) and had no express power to condone delay for filing an appeal.
The Bench also drew a vital distinction between Section 5 (extension of time/condonation of delay) and Section 14 (exclusion of time). The Bench explained that Section 5 involves a discretionary power vested in courts to “extend” the prescribed period upon showing “sufficient cause”. This power is flexible and not a matter of right for the litigant.
Similarly, Section 14 is a mandatory provision for the “exclusion” of time spent in bona fide proceedings in a court without jurisdiction. It does not extend the limitation period but rather reverses the clock, placing the litigant back within the prescribed period as a matter of right, provided its well-defined conditions are met, added the Bench.
Briefly, the respondent inherited 20 shares of the appellant company from his mother, which were bequeathed through a will, for which the respondent obtained a probate in November 1990. After about 23 years, the respondent’s advocate requested the registration of the transmission of these shares. The appellant company refused this request via a communication. At this time, Section 111 of the Companies Act, 1956 was in force, which required an appeal against such refusal to be filed with the CLB within two months. The respondent, however, failed to file an appeal by the deadline.
Later, a second request for registration was made in 2013, which received no reply. Meanwhile, the Companies Act, 2013 replaced the Erstwhile Act, and Section 58 (corresponding to Section 111 of the Erstwhile Act) came into force. Thereafter, the respondent filed a petition under the erstwhile Section 111A, which was returned due to defects, including the citation of the repealed provision. Subsequently, a fresh appeal was filed under Section 58 of the Act, 2013, along with an application to condone a delay of 249 days.
The CLB condoned the delay, citing the respondent’s residence in London, procedural issues with the initial filing, and the interests of justice. It gave weight to the fact that the main company petition had been held to be maintainable. The matter reached the High Court, which reasoned that although the Limitation Act, 1963 generally does not apply to tribunals, precedent suggested its principles were applicable to the CLB. Crucially, it held that as an appellate court, it must consider the change in law during the pendency of the appeal, specifically the enactment of Section 433 of the Act, 2013, which expressly applies the Act, 1963 to NCLT proceedings.
Appearances:
AOR R.N. Keswani, along with Advocates Nina Nariman, Ramesh N. Keswani, Pranav Singal, Ravi Raghunath Vachher, Arjun Vachher, and Samarth Suri, for the Appellant
Senior Advocate Meenakshi Arora, AOR Satya Mitra, along with Advocates Indranil Ghosh, Sreya Basu Mallick, Plazer Moktan, Shuvashish Sengupta, and Ankit Dey, for the Respondent
