The Supreme Court of India has held that the Company Law Board (CLB), functioning as a quasi-judicial body during the transition to the Companies Act, 2013, did not possess the power to condone delay under Section 5 of the Limitation Act, 1963. The Court clarified that unless expressly empowered by a special statute, quasi-judicial bodies cannot exercise the discretionary power to extend limitation periods.
A Division Bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan set aside the judgment of the Calcutta High Court which had affirmed the CLB’s decision to condone a delay of 249 days in filing an appeal under Section 58(3) of the Companies Act, 2013. The Bench ruled that Section 433 of the 2013 Act, which extends the provisions of the Limitation Act to the National Company Law Tribunal (NCLT), came into force only on June 1, 2016, and could not be applied retrospectively to proceedings before the CLB.
Background of the Dispute
The case originated from a refusal by The Property Company (P) Ltd. (Appellant) to register the transmission of 20 equity shares in favor of the Respondent, Mr. Rohinten Daddy Mazda. The shares were originally held by the Respondent’s mother, who passed away in 1989. The Respondent obtained a probate of her will in 1990 but sought transmission of shares only in 2013.
Following the company’s refusal to register the transmission on April 30, 2013, the Respondent failed to file an appeal within the two-month period prescribed under the erstwhile Companies Act, 1956. Subsequently, after the Companies Act, 2013 came into partial force, the Respondent filed an appeal under Section 58(3) of the new Act before the CLB on February 7, 2014, along with an application to condone a delay of 249 days.
The CLB allowed the application for condonation of delay on May 27, 2016, observing that the delay was due to procedural confusion and the Respondent’s residence abroad. The CLB held that “technical ground of delay” should not hinder substantial justice. The Calcutta High Court affirmed this decision on December 16, 2016, relying on judicial precedents suggesting that principles of the Limitation Act apply to tribunals.
Arguments of the Parties
The Appellant argued that the Limitation Act, 1963, applies strictly to “courts” and not to quasi-judicial bodies like the CLB unless specifically provided. It was contended that Regulation 44 of the CLB Regulations, which saves inherent powers, could not override mandatory statutory time limits. The Appellant emphasized that Section 433 of the Companies Act, 2013, which empowers the NCLT to apply the Limitation Act, was not in force when the CLB passed its order.
Conversely, the Respondent argued that the principles underlying the Limitation Act should apply to the CLB to advance the cause of justice. Reliance was placed on the Supreme Court’s decision in M.P. Steel Corporation v. Commissioner of Central Excise (2015), which applied the principles of Section 14 of the Limitation Act to tribunals. The Respondent also contended that the change in law brought by Section 433 should be considered by the appellate court.
The Court’s Analysis
The Supreme Court undertook a detailed analysis of whether the CLB had the authority to entertain an application under Section 5 of the Limitation Act.
1. Limitation Act Applicability to Quasi-Judicial Bodies: The Bench reiterated the settled position that the Limitation Act, 1963, applies only to “courts” and not to quasi-judicial bodies or tribunals unless the special law governing them expressly provides for it. Citing precedents such as Town Municipal Council, Athani (1969) and Officer on Special Duty (Land Acquisition) v. Shah Manilal Chandulal (1996), the Court observed that the CLB was a court only for limited purposes defined under Section 10E(4C) of the erstwhile Act, which did not include the power to condone delay.
2. Distinction Between Section 5 and Section 14: The Court distinguished the present case from M.P. Steel Corporation, which dealt with Section 14 (exclusion of time). The Bench explained:
- Section 14 (Exclusion): Is mandatory and pertains to the computation of the period of limitation. It restores the litigant’s right as if the abortive proceeding never happened.
- Section 5 (Extension): Is discretionary and extends the prescribed period itself upon showing “sufficient cause.”
The Court observed:
“The principles underlying Sections 5 and 14 of the Act, 1963 respectively, cannot be analogously applied to proceedings before quasi-judicial bodies… The mechanism envisaged under Section 5 is proximally bound and tethered to the discretion with which a civil court is empowered.”
The Court held that while Section 14 principles might apply to tribunals to prevent injustice, the discretionary power under Section 5 must be specifically conferred by statute.
3. No Retrospective Application of Section 433: The Court rejected the argument that Section 433 of the Companies Act, 2013, should apply retrospectively. It noted that Section 433 came into force on June 1, 2016, coinciding with the constitution of the NCLT. During the transition period (12.09.2013 to 01.06.2016), the CLB functioned under the erstwhile framework which did not empower it to condone delay.
“The remedy of the respondent was already dead, much before the coming into force of Section 58 of the Act, 2013 on 12.09.2013 let alone the coming into force of Section 433 of the Act, 2013 on 01.06.2016.”
4. Mandatory Nature of Section 58(3): The Court clarified that the time limit prescribed in Section 58(3) is mandatory. The use of the word “may” in the provision merely empowers the transferee to file an appeal and does not render the limitation period directory.
Decision
The Supreme Court concluded that the CLB had no jurisdiction to condone the delay of 249 days. Consequently, the High Court erred in upholding the CLB’s order. The appeal was allowed, and the impugned judgment was set aside.
Case Details
- Case Title: The Property Company (P) Ltd. v. Rohinten Daddy Mazda
- Case Number: Civil Appeal No. 92 of 2026 (Arising out of S.L.P (Civil) No. 3906 of 2017)
- Coram: Justice J.B. Pardiwala and Justice R. Mahadevan
