BENGAL CHEMISTS & DRUGGISTS ASSN. versus KALYAN CHOWDHURY on 2 February 2018

BENGAL CHEMISTS & DRUGGISTS ASSN.

v.

KALYAN CHOWDHURY

(Civil Appeal No. 684 of 2018)

FEBRUARY 02, 2018

[R. F. NARIMAN AND NAVIN SINHA, JJ.]

Companies Act, 2013 – s.421(3) – National Company LawAppellate Tribunal after setting out s.421(3) of the Act, dismissedappeal as not maintainable, inasmuch as the appeal was filed 9days after the period of limitation of 45 days had expired and afurther period of another 45 days had also expired – Appellantcontended that u/s.433 of the Act, the provisions of the LimitationAct shall, as far as may be, apply to appeals before the AppellateTribunal and that therefore, s.5 of the Limitation Act would beapplicable to condone the delay beyond the period of 90 days –Held: There is no reason to interfere with the judgment under appeal– It is not possible for s.5 of the Limitation Act to apply given theperemptory language of s.421(3) of the Companies Act – Cursoryreading of s.421(3) makes it clear that the proviso thereto providesa period of limitation different from that provided in the LimitationAct, and also provides a further period not exceeding 45 days onlyif it is satisfied that the appellant was prevented by sufficient causefrom filing the appeal within that period – s.433 cannot come to theaid of the appellant because the provisions of the Limitation Actonly apply “as far as may be” – In instant case, where there is aspecial provision contained in s.421(3) proviso, s.5 of the LimitationAct cannot apply – Limitation Act, 1963 – s.5.

Dismissing the appeal, the Court

HELD: 1. A cursory reading of Section 421(3) of theCompanies Act, 2013 makes it clear that the proviso theretoprovides a period of limitation different from that provided in theLimitation Act, and also provides a further period not exceeding45 days only if it is satisfied that the appellant was prevented bysufficient cause from filing the appeal within that period. Section433 obviously cannot come to the aid of the appellant becausethe provisions of the Limitation Act only apply “as far as may

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[2018] 2 S.C.R.

Abe”. In a case like the present, where there is a special provisioncontained in Section 421(3) proviso, Section 5 of the LimitationAct obviously cannot apply. [Para 4] [1102-E-F]

2. Another very important aspect of the case is that 45days is the period of limitation, and a further period not exceedingB45 days is provided only if sufficient cause is made out for filingthe appeal within the extended period. This is a peremptoryprovision. Appellant contended that under Section 433 of the Act,the provisions of the Limitation Act, 1963 shall, as far as may be,apply to Appeals before the Appellate Tribunal and that therefore,Section 5 would be applicable to condone the delay beyond theCperiod of 90 days. If such argument is accepted, it would meanthat notwithstanding that the further period of 45 days hadelapsed, the Appellate Tribunal may, if the facts so warrant,condone the delay. This would be to render otiose the secondtime limit of 45 days, which, as has been pointed out by us above,Dis peremptory in nature. [Para 5] [1102-F-H]

Chhattisgarh SEB v. Central Electricity RegulatoryCommission, (2010) 5 SCC 23 : [2010] 4 SCR 680 –relied on.

Mangu Ram v. Municipal Corporation of Delhi (1976)E1 SCC 392 : [1976] 2 SCR 260 – distinguished.

Guda Vijayalakshmi v. Guda Ramachandra SekharaSastry (1981) 2 SCC 646 : [1981] 3 SCR 223;Dr. Partap Singh and Another v. Director ofEnforcement, Foreign Exchange Regulation Act andFOthers (1985) 3 SCC 72 : [1985] 3 SCR 969 –inapplicable.

Union of India v. Popular Construction Co. (2001) 8SCC 470 : [2001] 3 Suppl. SCR 619; ONGC v. GujaratEnergy Transmission Corporation Limited (2017) 5 SCCG42 – referred to.

Case Law Reference

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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 684 of2018.

From the Judgment and Order dated 31.07.2017 of the NationalCompany Law Appellate Tribunal (NCLAT), New Delhi in CompanyAppeal (AT) No. 76 of 2017.

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Jayant Mehta, Ms. Pratiksha Sharma, Shivanker Beher, AnkitAacharya, Rahul Kukreja, Advs. for the Appellant.

Sankar N. Sinha, Satish Kumar, Advs. for the Respondent.

The Judgment of the Court was delivered by D

R. F. NARIMAN, J. 1. The present appeal is against an orderof the National Company Law Appellate Tribunal dated 31.07.2017 bywhich the Appellate Tribunal, after setting out Section 421(3) of theCompanies Act, 2013, (for short ‘the Act’) has dismissed the appeal asnot maintainable, inasmuch as the appeal has been filed 9 days after theperiod of limitation of 45 days has expired and a further period of another45 days has also expired.

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2. Mr. Jayant Mehta, learned counsel appearing on behalf of theappellant, has argued the matter persuasively before us. He points outthat Section 421(3) of the Act does not contain the language of Section34(3) proviso of the Arbitration Act, 1996 which contains the words “butnot thereafter” which Union of Indiavs. Popular Construction Co.(2001) 8 SCC 470 considered. He further points out that, in any case,under Section 433 of the Act, the provisions of the Limitation Act, 1963shall, as far as may be, apply to Appeals before the Appellate Tribunaland that therefore, Section 5 would be applicable to condone the delaybeyond the period of 90 days. He has buttressed his submission byreferring to various decisions of this Court.

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3. Before coming to the judgments of this Court, it is important tofirst set out Section 421(3) and Section 433 of the Act. These provisionsread as follows:

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A“421. Appeal from orders of Tribunal.-

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(3) Every appeal under sub-section (1) shall be filed withina period of forty-five days from the date on which a copyof the order of the Tribunal is made available to the personBaggrieved and shall be in such form, and accompanied bysuch fees, as may 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 appealwithin that period.

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433. Limitation.- The provisions of the Limitation Act,1963 shall, as far as may be, apply to proceedings or appealsDbefore the Tribunal or the Appellate Tribunal, as the casemay be.”

4. A cursory reading of Section 421(3) makes it clear that theproviso provides a period of limitation different from that provided in theLimitation Act, and also provides a further period not exceeding45 daysEonly if it is satisfied that the appellant was prevented by sufficient causefrom filing the appeal within that period. Section 433 obviously cannotcome to the aid of the appellant because the provisions of the LimitationAct only apply “as far as may be”. In a case like the present, wherethere is a special provision contained in Section 421(3) proviso, Section5 of the Limitation Act obviously cannot apply.F

5. Another very important aspect of the case is that 45 days is theperiod of limitation, and a further period not exceeding 45 days is providedonly if sufficient cause is made out for filing the appeal within the extendedperiod. According to us, this is a peremptory provision, which willotherwise be rendered completely ineffective, if we were to accept theGargument of learned counsel for the appellant. If we were to acceptsuch argument, it would mean that notwithstanding that the further periodof 45 days had elapsed, the Appellate Tribunal may, if the facts so warrant,condone the delay. This would be to render otiose the second time limitof 45 days, which, as has been pointed out by us above, is peremptory inHnature.

BENGAL CHEMISTS & DRUGGISTS ASSN. v. KALYANCHOWDHURY [R. F. NARIMAN, J.]

6. We are fortified in this conclusion by the judgment of thisCourt in Chhattisgarh SEBv. Central Electricity RegulatoryCommission, 2010 (5) SCC 23. The language of Section 125 of theElectricity Act, 2003, which is similar to the language contained in Section421 (3) of the Companies Act, 2013, came up for consideration in theaforesaid decision. The issue that arose before this Court was whetherSection 5 of the Limitation Act can be invoked for allowing the aggrievedperson to file an appeal beyond 60 days plus the further grace period of60 days. This Court held that Section 5 cannot apply to Section 125 ofthe Electricity Act in the following terms:

“25. Section 125 lays down that any person aggrieved byany decision or order of the Tribunal can file an appeal tothis Court within 60 days from the date of communicationof the decision or order of the Tribunal. Proviso to Section125 empowers this Court to entertain an appeal filed withina further period of 60 days if it is satisfied that there wassufficient cause for not filing appeal within the initial periodof 60 days. This shows that the period of limitationprescribed for filing appeals under Sections 111(2) and125 is substantially different from the period prescribedunder the Limitation Act for filing suits, etc. The use ofthe expression “within a further period not exceeding 60days” in the proviso to Section 125 makes it clear that theouter limit for filing an appeal is 120 days. There is noprovision in the Act under which this Court can entertainan appeal filed against the decision or order of the Tribunalafter more than 120 days.”

The aforesaid judgment was reiterated and followed inONGC v.GujaratEnergy Transmission Corporation Limited,2017 (5) SCC 42 at Para 5.

7. It now remains to deal with the decisions cited by learned counselappearing on behalf of the appellant. The first is the judgment inGudaVijayalakshmivs. Guda Ramachandra Sekhara Sastry, (1981) 2SCC 646. In that case, a Transfer Petition was filed under Section 25,CPC, 1908 in this Court. A preliminary objection was taken stating thatin view of Sections 21 and 21A of the Hindu Marriage Act, 1955, Section25 would not be applicable. This was turned down by this Court statingthat Section 21 would not apply to substantive provisions of the Code as A

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Aapart from procedural provisions. Equally, Section 21A of the HinduMarriage Act, 1955 only dealt with transfers “in certain cases”. Thisbeing so, the wide and plenary power conferred on this Court to transferany suit, appeal or other proceedings from one High Court to anotherHigh Court or from one Civil Court in one State to another Civil Court inany other State was held not be entrenched upon by Sections 21 andB21A of the Hindu Marriage Act. We fail to see how this judgment, in anymanner, furthers the proposition sought to be canvassed on behalf of theappellant, which is that Section 5 of the Limitation Act would continueto apply even after a second period of 45 days is peremptorily laid down.This judgment, therefore, does not carry the matter any further.C

8. Reliance placed onDr. Partap Singh and Anothervs.Directorof Enforcement, Foreign Exchange Regulation Act and Others,(1985) 3 SCC 72 is equally misplaced. In this case, Section 37 of theForeign Exchange Regulation Act, 1973 was involved. Section 37(2)provides that the provisions of the Code relating to searches shall, so farDas may be, apply to searches directed under Section 37(1). This Courtheld that the expression “so far as may be” has always been construedto mean that those provisions may generally be followed to the extentpossible. In the fact scenario of that case, it was held that to give fullmeaning to the expression ‘so far as may be’, sub-section (2) of Section37 should be interpreted to mean that broadly the procedure relating toEsearch as enacted in Section 165 shall be followed.

9. This case again does not take the matter any further. In fact,the ratio of the judgment as far as this case is concerned is that theexpression “so far as may be” only means to the extent possible. If notpossible, obviously the Limitation Act would not apply. We have alreadyFheld that it is not possible for Section 5 of the Limitation Act to applygiven the peremptory language of Section 421(3).

10. The third judgment is Mangu Ramvs. MunicipalCorporation of Delhi, (1976) 1 SCC 392. In this judgment, Section 417of the Code of Criminal Procedure, 1898 provided for special leave toGappeal from an order of acquittal. Section 417 (4) required that theapplication for special leave should be made before the expiry period of60 days from the date of the order of acquittal. Applying Section 29(2)of the Limitation Act, this Court held that Section 5 of the Limitationwould not be impliedly excluded in such case despite the mandatory andHperemptory language contained in Section 417(4) of the Cr.P.C. This BENGAL CHEMISTS & DRUGGISTS ASSN. v. KALYANCHOWDHURY [R. F. NARIMAN, J.]

Court held that all periods of limitation are cast in such mandatory andperemptory language and, therefore, Section 5 could not be said to beimpliedly excluded.

11. This case again is wholly distinguishable. It applies only to aperiod of limitation which is given beyond which nothing further is statedas to whether delay may be condoned beyond such period. In the presentcase, the Section 417(3) does not merely contain the initial period of 45days, in which case the aforesaid judgment would have applied. Section417(3) goes on to state that another period of 45 days, being a graceperiod given by the legislature which cannot be exceeded, alone wouldapply, provided sufficient cause is made out within the aforesaid graceperiod. As has been held by us above, it is the second period, which is aspecial inbuilt kind of Section 5 of the Limitation Act in the special statute,which lays down that beyond the second period of 45 days, there can beno further condonation of delay. On this ground therefore, the aforesaidjudgment also stands distinguished.

12. One further thing remains – and that is that learned counselfor the appellant pointed out the difference between the expression usedin the Arbitration Act as construed by Popular Construction (supra)and its absence in the proviso in Section 421(3). For the reasons givenabove, we are of the view that this would also make no difference inview of the language of the proviso to Section 421(3) which containsmandatory or peremptory negative language and speaks of a secondperiod not exceeding45 days, which would have the same effect as theexpression “but not thereafter” used in Section 34(3) proviso of theArbitration Act, 1996.

13. We, therefore, see no reason to interfere with the judgmentunder appeal. The appeal is dismissed.

Ankit Gyan Appeal dismissed.

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