Limitation Act Applies Only To Courts, Not Tribunals Unless Law Says So: SC

(MENAFN- KNN India) New Delhi, Jan 8 (KNN) The Supreme Court on Wednesday reiterated that quasi-judicial bodies like the Company Law Board (CLB) or tribunals cannot condone delays in filing appeals unless such power is clearly provided under law, holding that the authority to condone delay under the Limitation Act rests solely with courts.

A bench of Justices J B Pardiwala and R Mahadevan set aside a Calcutta High Court order that had upheld the CLB's decision to condone a 249-day delay in filing an appeal under the Companies Act, 2013.

The Court clarified that the provisions of the Limitation Act, 1963 apply only to suits, applications or appeals filed before courts, and not before quasi-judicial bodies or tribunals unless the statute specifically empowers them to do so.

The dispute concerned a share transmission claimed under the respondent's mother's will. Though probate was granted in 1990, he sought transmission only in March 2013, which the company rejected a month later. He failed to appeal the rejection within the two-month limit prescribed under the Companies Act, 1956.

In February 2014, during the transition to the Companies Act, 2013 and before the NCLT became functional, the respondent filed a delayed appeal before the CLB, which condoned the 249-day delay. The Calcutta High Court upheld this, leading the company to approach the Supreme Court.

Allowing the appeal, the Supreme Court held that the CLB, being a body constituted under the erstwhile Companies Act, 1956, was deemed to be a court only for limited purposes and was not empowered to apply Section 5 of the Limitation Act to condone delays. The Court said the High Court erred in affirming the CLB's order condoning the delay.

The bench also rejected the application of CLB under Section 433 of the Companies Act, 2013, which makes the Limitation Act applicable to proceedings before the NCLT and the National Company Law Appellate Tribunal (NCLAT). It held that the provision could not be applied retrospectively or borrowed to confer similar powers on the CLB.

The Court held that while Section 14 principles may sometimes apply to quasi-judicial bodies, the power under Section 5 to condone delay cannot be exercised without express statutory authority, nor can inherent powers under CLB Regulations be used to extend limitation.

Holding that the limitation period prescribed under Section 58(3) of the Companies Act, 2013 is mandatory and not merely directory, the Court concluded that the respondent's remedy was already time-barred before the relevant provisions of the 2013 Act came into force.

Accordingly, the Supreme Court allowed the appeal and set aside the orders of the CLB and the Calcutta High Court.

(KNN Bureau)

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