Companies Act, 2013 – ss. 58(3), 433 – Refusal of registration and appeal against refusal – Power of the Company Law Board-CLB to extend time or condone delay u/s.58(3): Held: Company Law Board-CLB, cannot condone the delay in filing an appeal u/s.58(3) of the Act since the provisions of the 1963 Act would only apply to suits, applications or appeals, as the case may be, which are made under any law to ‘courts’ and not to those made before quasi-judicial bodies or tribunals, unless such quasi-judicial bodies or tribunals are specifically empowered in that regard – Limitation Act, 1963. [Para 160 (iii)] Companies Act, 2013 – ss.58(3), 433 – Limitation Act, 1963– ss.5, 14 – Refusal of registration and appeal against refusal– Power of the Company Law Board-CLB to extend time or condone delay u/s.58(3) – Respondent’s mother bequeathed the subject shares to the respondent through Will, of which the respondent obtained probate – After 23 years, the respondent sought registration of the transmission of the shares – Appellant company refused such registration – As per s.111 of the “erstwhile Act-Companies Act, 1956, against such refusal the respondent was to file appeal within a period of two months, however, the respondent failed to take any action within the prescribed time period – Act of 2013 came into force, ss.111 and 111A of the erstwhile Act replaced by s.58 along with s.59 – Respondent filed appeal u/s.58 of the Act, 2013 before the CLB, along with an application u/Regn 44 seeking the condonation of delay of 249 days in preferring the appeal, which was allowed – Appeal thereagainst dismissed by the High Court – Issues before this Court: Company Law Board-CLB, being quasi-judicial body, if has the power to condone the delay in filing an appeal u/s.58(3) – Even if s.5 of the 1963 Act, per say, could not be applied to quasi-judicial bodies, the principles underlying s.5 of the 1963 Act, if can be made applicable to an appeal u/s.58(3), instituted before CLB – s.433 of the 2013 Act, brought into force on 01.06.2016 in order to empower the NCLT and NCLAT, to apply the provisions of the 1963 Act, if could be given retrospective effect such that it applied to the CLB as well:
Held: (i) Although the appeal u/s.58(3) preferred by the respondent was made under the new provision of the Act, 2013, yet the body/forum before which it was made i.e., Company Law Board-CLB, was one constituted under the provisions of the erstwhile Act – According to s.10E(4C) of the erstwhile Act, the CLB was a court only in the restricted sense, there existed no express provision which empowered the CLB to apply the provisions of the Act, 1963 to the proceedings and appeals before itself.
(ii) Provisions of the 1963 Act-provisions that lay down a prescribed period of limitation as well as ss.4 to 24 of the 1963 Act, would only apply to suits, applications or appeals, as the case may be, which are made under any law to ‘courts’ and not to those made before quasi-judicial bodies or tribunals, unless such quasi-judicial bodies or tribunals are specifically empowered in that regard.
(iii) Power to extend time u/s.5 of the 1963 Act cannot be resorted to by statutory authorities, quasi-judicial bodies or tribunals, unless expressly indicated – When such authorities or bodies are deemed to be a court for certain limited or specified purposes, such a legal fiction must not be extended beyond the purpose for which the fiction was created so as to confer powers u/s.5 of the 1963 Act as well.
(iv) Principles underlying s.14 of the 1963 Act could be applied to the provisions relating to quasi-judicial bodies, unless there is any express indication to the contrary in the wording and scheme of the said provision – However, there exists vital distinction between the principles underlying ss.5 and 14 of the 1963 Act respectively.
(v) Differences between the principles underlying ss.5 and 14 of the 1963 Act respectively are, the exercise of a discretionary power vested in the courts and the mandatory provision independent of any exercise of discretion; “sufficient cause” which term by itself is subject to a good amount of elasticity and the well-defined conditions which must be met; and the extension of time and the exclusion of time.
(vi) Principles underlying ss.5 and 14 of the 1963 Act respectively, cannot be analogously applied to proceedings before quasi-judicial bodies because in the former, the courts exercise their discretion in extending and more specifically, adjusting the prescribed period of limitation itself to create a fresh period of limitation – No entitlement as a matter of right arises vis-à-vis extension of time – Whereas, in the latter, the prescribed period of limitation remains intact, no delay is attributed to the litigant and the time during which the abortive proceeding was being prosecuted is expunged in the eyes of the law to place the litigant back or restore his position within the prescribed period of limitation wherein he is entitled to file the appeal or application, as the case may be, as a matter of right.
(vii) Mechanism envisaged u/s.5 of the 1963 Act is proximally bound and tethered to the discretion with which a civil court is empowered and that u/s.14 of the 1963 Act is anchored on restoring the right of a litigant to institute an appeal or application, as the case may be, within the prescribed period of limitation – Both provisions work in the interest of the litigant and seek to further the cause of substantive justice, however, the kind and nature of the power exercised under the two provisions, as well as the mechanism envisaged therein, are quite distinct – Moreover, the principles underlying ss.5 and
14 of the 1963 Act respectively also stand on a different footing for the reason that when the legislature has intended to grant powers of extension of time, the same has been expressly indicated either through the manner in which the concerned provision is phrased (more often than not through a proviso) or by the adoption of the Act, 1963 through a separate provision to the special law as a whole (akin to s.433 of the 2013, Act).
(viii) Regn.44 of the CLB Regulations which saves the inherent power of the CLB would not enable the CLB to extend time for the filing of the appeal or the application itself, as the case may be.
(ix) Savings provision in the Act, 1963-s.29(2), is of no relevance when the special or local law deals with a suit, appeal or application, as the case may be, which is to be filed before a quasi-judicial body – Question whether a certain provision in a special or a local law expressly excludes the provisions of s.4 to 24 of the Act, 1963 respectively arises only in pursuance of the savings provision u/s.29(2) of the Act, 1963 – As a natural corollary, if s.29(2) is, by itself, inapplicable to a particular case then there would be no need to look into or analyse whether there is any express exclusion.
(x) Appeal u/s.58(3) of the Act, 2013 preferred before the CLBquasi-judicial body are being dealt with, it cannot be said that the principles underlying s.5 of the Act, 1963 must be applied – s.29(2) of the Act, 1963 is, of no relevance and there arises no occasion to examine whether s.58(3) of the Act, 2013 “expressly excludes” the application of s.5 of the Act, 1963.
(xi) Simpliciter limitation period prescribed u/s.58(3) of the Act, 2013 must not be read to be merely directory – Presence of any additional pre-emptory language in the form of “but not thereafter” or “shall” would not always be necessary to convey that the prescribed period is mandatory.
(xii) s.433 of the Act, 2013 which empowers the NCLT and the NCLAT respectively to apply the provisions of the Act, 1963, as far as may be, to the proceedings and appeals before itself, cannot be borrowed to signify the existence of a similar power with respect to the CLB – Moreover, the remedy of the respondent was already time-barred before the coming into force of s.58(3) of the Act, 2013, let alone the coming into force of s.433 of the Act, 2013 – Hence, the change in law cannot enure to the benefit of the respondent. Thus, the High Court erred in dismissing the statutory appeal filed u/s.10F of the erstwhile Act and thereby, affirming the order of the CLB condoning the delay of 249 days in filing the appeal u/s.58(3) of the Act, 2013 – Order passed by the High Court set aside – Company Law Board Regulations, 1991 – Regn 44 – Companies Act, 1956 – s.10F. [Paras 160, 161]
Companies Act, 2013 – Implementation of the provisions of the Act, 2013 in phases – Powers conferred upon the CLB – Discussed. [Paras 33-41]
Limitation Act, 1963 – ss.5 and 14 – Extension of prescribed period in certain cases – Exclusion of time of proceeding bona fide in court without jurisdiction – Difference between the principles underlying ss.5 and 14 – Explained. [Paras 66-93]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Nidhi Jain. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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