Lockdown does not extend Statutory period of Limitation-SC

On 18th September 2020, a Supreme Court Bench comprising CJI S.A Bobde, Justice A. S Bopanna and Justice V. Ramasubramanium pronounced their judgement and dismissed the application for condonation of delay and appeal as time-barred.

Facts of Sagufa Ahmed and Ors. Vs. Upper Assam Plywood Products Pvt. Ltd and Ors. t

The appellants had moved National Company Law Tribunal, Guwahati for winding up of the company Upper Assam Plywood Products Pvt. Ltd where they claim to hold 24.89% of the shares. NCLT dismissed the winding-up petition filed by them by an order dated 25.102.2019.

As per the Appellants, they applied for the certified copy of the NCLT order on 21.11.2019 and were able to obtain the copy only 19.12.19 through their counsel even though the copy application was filed on 21.11.19.

After receiving the certified copy of the NCLT order, they filed an appeal with NCLAT on 20.07.2020. Along with the appeal, an application for condonation of delay was also filed by the appellants.

However, the NCLAT dismissed their application for condonation of delay and stated that they could not condone delay if a time of 45 days has passed. Aggrieved by order of NCLAT, the appellants approached the Supreme Court.

Contentions Before the Supreme Court

There were two main contentions that were raised before the Hon’ble Supreme Court:-

  1. The counsel for the appellants, Mr Gunjan Singh, contended that the limitation for filing an appeal ( 45 days) would only start from the day when a party receives the order of a court.
  2. Mr Gunjan Singh also contended that due to the COVID 19 pandemic and in accordance with SC order 23.03.2020 which was “limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended 9 w.e.f. 15th March 2020 till further order” so their application for condonation of delay should be allowed.

The ruling of the Court

While deliberating the first contention, the issue of limitation of appeal, the Court examined the various provisions of Companies Act, NCLT Rules,2016, as well as the Limitations Act.

The Judges agreed with the appellant’s contention that the limitation of 45 days will begin when the aggrieved person receives the copy of the order as enshrined in Section 421(1) of the Companies Act. 

However, the Hon’ble judges also noted that even though they received the copy on 19.12.2019, they had a period of 45 days to file an appeal which ended on 02.02.2020. As the appellants filed the appeal on 20.07.2020 and the NCLAT only has the power to condone a delay of 45 days. 

As per the judgement, the appellants relied on the Supreme Court order dated 23.03.20 to overcome the failure of not filing an appeal. 

While dismissing their appeal, the Court opined that the appellants couldn’t claim the benefit of its 23.03.2020 order as “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 Court reasoned that the lockdown was imposed on 24.03.2020 and the aggrieved party had ample time to file an appeal before that.

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