SAGUFA AHMED & ORS. versus UPPER ASSAM PLYWOOD PRODUCTS PVT. LTD. & ORS. on 18 September 2020

1. Challenging an order passed by the National Company LawAppellate Tribunal (hereinafter referred to as ‘NCLAT’) dismissing anapplication for condonation of delay as well as an appeal as time barred,the appellants have come up with the above appeals.

2. We have heard Mr. Gunjan Singh, learned counsel for theappellants and Mr. Sajan Poovayya, learned Senior Counsel who acceptsnotice on behalf of the first respondent.

3. The appellants herein together claim to hold 24.89% of theshares of a company by name Upper Assam Plywood Products PrivateLimited, which is the first respondent herein. The appellants moved anapplication before the Guwahati Bench of the National Company LawTribunal (hereinafter referred to as ‘NCLT’) for the winding up of thecompany. The said petition was dismissed by the NCLT by an orderdated 25.10.2019.

4. According to the appellants, they applied for a certified copy ofthe order of the NCLT dated 25.10.2019, on 21.11.2019 (though theappellants have claimed in the Memo of Appeal that they applied for acertified copy on 21.11.2019, the copy application filed as Annexure P-1 bears the date 22.11.2019).

5. According to the appellants, the certified copy of the orderdated 25.10.2019 passed by the NCLT was received by their counsel on19.12.2019, pursuant to the copy application made on 21.11.2019.

6. Though the appellants admittedly received the certified copy ofthe order on 19.12.2019, they chose to file the statutory appeal beforeNCLAT on 20.07.2020. The appeal was filed along with an applicationfor condonation of delay.

7. By an order dated 04.08.2020, the Appellate Tribunal dismissedthe application for condonation of delay on the ground that the Tribunalhas no power to condone the delay beyond a period of 45 days.Consequently the appeal was also dismissed. It is against the dismissalof both the application for condonation of delay as well as the appeal,that the appellants have come up with the present appeals.

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A8. The contentions raised by the learned counsel for the appellantsare two-fold namely (i) that the Appellate Tribunal erred in computingthe period of limitation from the date of the order of the NCLT, contraryto Section 421(3) of the Companies Act, 2013, and (ii) that the AppellateTribunal failed to take note of the lockdown as well as the order passedby this Court on 23.03.2020 in Suo Motu Writ Petition (Civil) No.3 ofB2020, extending the period of limitation for filing any proceeding witheffect from 15.03.2020 until further orders.

9. Let us now test the correctness of the contentions one by one.

Contention-1

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10. Section 420(3) of the Companies Act, 2013 mandates the NCLTto send a copy of every order passed under Section 420(1) to all theparties concerned. Section 420(3) reads as follows:

“420. Orders of Tribunal -

D(1) xxxx

(2) xxxx

(3) The Tribunal shall send a copy of every order passedunder this section to all the parties concerned”.

11. Rule 50 of the National Company Law Tribunal Rules, 2016Ealso mandates the Registry of the NCLT to send a certified copy of thefinal order to the parties concerned free of cost. However, Rule 50 alsoenables the Registry of the NCLT to make available the certified copieswith cost as per schedule of fees in all other cases (meaning thereby ‘topersons who are not parties’). Rule 50 reads as follows : -F

“50. Registry to send certified copy. - The Registry shall senda certified copy of final order passed to the parties concernedfree of cost and the certified copies may be made availablewith cost as per the schedule of fees, in all other cases.”

12. Section 421(1) provides for a remedy of appeal to the AppellateGTribunal as against an order of NCLT. Sub-Section (3) of Section 421prescribes the period of limitation for filing an appeal and the provisothereunder confers a limited discretion upon the Appellate Tribunal tocondone the delay. Sub-Section (3) of Section 421 together with theproviso thereunder reads as follows:H

“421.Appeal from orders of Tribunal -

(1) xxxx

(2) xxxx

(3) Every appeal under sub-section (1) shall be filed within aperiod of forty-five days from the date on which a copy of theorder of the Tribunal is made available to the person aggrievedand shall be in such form, and accompanied by such fees, asmay be prescribed:

Provided that the Appellate Tribunal may entertain anappeal after the expiry of the said period of forty-five daysfrom the date aforesaid, but within a further period notexceeding forty-five days, if it is satisfied that the appellantwas prevented by sufficient cause from filing the appeal withinthat period.”

13. Therefore, it is true, as contended by the appellants, that theperiod of limitation of 45 days prescribed in Section 421(3) would startrunning only from the date on which a copy of the order of the Tribunalis made available to the person aggrieved. It is also true that under Section420(3) of the Act read with Rule 50, the appellants were entitled to befurnished with a certified copy of the order free of cost.

14. Therefore if the appellants had chosen not to file a copyapplication, but to await the receipt of a free copy of the order in termsof Section 420(3) read with Rule 50, they would be perfectly justified infalling back on Section 421(3), for fixing the date from which limitationwould start running. But the appellants in this case, chose to apply for acertified copy after 27 days of the pronouncement of the order in theirpresence and they now fall back upon Section 421(3).

15. Despite the above factual position, we do not want to holdagainst the appellants, the fact that they waited from 25.10.2019 (thedate of the order of NCLT) upto 21.11.2019, to make a copy application.But atleast from 19.12.2019, the date on which a certified copy wasadmittedly received by the counsel for the appellants, the period oflimitation cannot be stopped from running.

16. From 19.12.2019, the date on which the counsel for theappellants received the copy of the order, the appellants had a period of45 days to file an appeal. This period expired on 02.02.2020.

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A17. By virtue of the proviso to Section 421(3), the Appellate Tribunalwas empowered to condone the delay upto a period of period of 45days. This period of 45 days started running from 02.02.2020 and itexpired even according to the appellants on 18.03.2020. The appellantsdid 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 24.03.2020Band there was no impediment for the appellants to file the appeal on orbefore 18.03.2020. To overcome this difficulty, the appellants rely uponthe order of this Court dated 23.03.2020. This takes us to the secondcontention of the appellants.

Contention-2C

18. To get over their failure to file an appeal on or before18.03.2020, the appellants rely upon the order of this Court dated23.03.2020 in Suo Motu Writ Petition (Civil) No.3 of 2020. It reads asfollows:

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

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To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file suchproceedings in respective Courts/Tribunals across the countryincluding this Court, it is hereby ordered that a period ofFlimitation in all such proceedings, irrespective of the limitationprescribed under the general law or Special Laws whethercondonable or not shall stand extended w.e.f. 15th March2020 till further order/s to be passed by this Court in presentproceedings.

We are exercising this power under Article 142 readwith Article 141 of the Constitution of India and declare thatthis order is a binding order within the meaning of Article141 on all Courts/Tribunals and authorities.

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

Issue notice to all the Registrars General of the HighCourts, returnable in four weeks.”

Issues

19. But we do not think that the appellants can take refuge underthe above order. What was extended by the above order of this Courtwas only “the period of limitation” and not the period upto whichdelay can be condoned in exercise of discretion conferred by thestatute. The above order passed by this Court was intended to benefitvigilant litigants who were prevented due to the pandemic and thelockdown, from initiating proceedings within the period of limitationprescribed by general or special law. It is needless to point out that thelaw of limitation finds its root in two latin maxims, one of which isVigilantibus Non Dormientibus Jura Subveniunt which means thatthe law will assist only those who are vigilant about their rights and notthose who sleep over them.

20. It may be useful in this regard to make a reference to Section10 of the General Clauses Act, 1897 which reads as follows:

“10. Computation of time - (1) Where, by any 19 [CentralAct] or Regulation made after the commencement of this Act,any act or proceeding is directed or allowed to be done ortaken in any Court or office on a certain day or within aprescribed period, then, if the Court or office is closed onthat day or the last day of the prescribed period, the act orproceeding shall be considered as done or taken in due timeif it is done or taken on the next day afterwards on which theCourt or office is open:

Provided that nothing in this section shall apply to anyact or proceeding to which the Indian Limitation Act, 1877(15 of 1877), applies.

(2) This section applies also to all [Central Acts] and,Regulations made on or after the fourteenth day of January,1887.”

21. The principle forming the basis of Section 10(1) of the GeneralClauses Act, also finds a place in Section 4 of the Limitation Act, 1963which reads as follows: - “4. Expiry of prescribed period when court is closed.—Wherethe prescribed period for any suit, appeal or application A

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Aexpires on a day when the court is closed, the suit, appeal orapplication may be instituted, preferred or made on the daywhen the court reopens.

Explanation.— A court shall be deemed to be closed on anyday within the meaning of this section if during any part ofBits normal working hours it remains closed on that day.”22. The words “prescribed period” appear in several Sections ofthe Limitation Act, 1963. Though these words “prescribed period” arenot defined in Section 2 of the Limitation Act, 1963, the expression isused throughout, only to denote the period of limitation. We may see aCfew examples:

(i) Section 3(1) makes every proceeding filed after the prescribedperiod, liable to be dismissed, subject however to the provisions in Sections4 to 24.

(ii) Section 5 enables the admission of any appeal or applicationDafter the prescribed period.

(iii) Section 6 uses the expression prescribed period in relationto proceedings to be initiated by persons under legal disability.

23. Therefore, the expression “prescribed period” appearing inSection 4 cannot be construed to mean anything other than the period ofElimitation. Any period beyond the prescribed period, during which theCourt or Tribunal has the discretion to allow a person to institute theproceedings, cannot be taken to be “prescribed period”.

24. In Assam Urban Water Supply and Sewerage Board VersusSubash Projects and Marketing Limited[1], this Court dealt with theFmeaning of the words “prescribed period” in paragraphs 13 and 14 asfollows:

“13. The crucial words in Section 4 of the 1963 Act are“prescribed period”. What is the meaning of these words?

G14. Section 2(j) of the 1963 Act defines”

“2(j) ‘period of limitation’ which means the period oflimitation prescribed for any suit, appeal or application bythe Schedule, and ‘prescribed period’ means the period of H1 (2012) 2 SCC 624

SAGUFA AHMED & ORS. v. UPPER ASSAM PLYWOODPRODUCTS PVT. LTD. & ORS. [V. RAMASUBRAMANIAN, J.]

limitation computed in accordance with the provisions of thisAct.

Section 2(j) of the 1963 Act when read in the context of Section34(3) of the 1996 Act, it becomes amply clear that theprescribed period for making an application for setting asidearbitral award is three months. The period of 30 daysmentioned in proviso that follows sub-section (3) of Section34 of the 1996 Act is not the ‘period of limitation’ and,therefore, not ‘prescribed period’ for the purposes of makingthe application for setting aside the arbitral award. The periodof 30 days beyond three months which the court may extendon sufficient cause being shown under the proviso appendedto sub-section (3) of Section 34 of the 1996 Act being not the‘period of limitation’ or, in other words, ‘prescribed period’,in our opinion, Section 4 of the 1963 Act is not, at all,attracted to the facts of the present case.”

25. Therefore, the appellants cannot claim the benefit of the orderpassed by this Court on 23.03.2020, for enlarging, even the period up towhich delay can be condoned. The second contention is thus untenable.Hence the appeals are liable to be dismissed. Accordingly, they aredismissed.

Kalpana K. Tripathy

Appeals dismissed.

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