The Supreme Court has observed that quasi-judicial bodies such as the Company Law Board (CLB) do not possess inherent jurisdiction to condone delay in filing statutory appeals unless such power was expressly conferred by the governing statute.
The Division Bench of Justice JB Pardiwala and Justice R Mahadevan on Wednesday set aside a Calcutta High Court verdict that upheld 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 Apex Court clarified that the discretionary power under Section 5 of the Limitation Act, 1963 vested exclusively in courts and could not be assumed by tribunals or statutory authorities in the absence of explicit legislative authorisation.
The High Court had dismissed a statutory appeal under Section 10F of the erstwhile Companies Act, 1956, thereby affirming the CLB’s exercise of condonation powers.
The dispute arose from the refusal of a company to register the transmission of shares claimed by the respondent pursuant to his mother’s will. Although probate had been granted as early as 1990, the respondent sought transmission only in March 2013.
Upon rejection of the request in April 2013, the respondent failed to prefer an appeal within the prescribed limitation period under the Companies Act, 1956. Subsequently, during the interregnum following the partial enforcement of the Companies Act, 2013 and prior to the constitution of the National Company Law Tribunal (NCLT), the respondent filed an appeal before the CLB with a substantial delay of 249 days.
The CLB condoned the delay, citing procedural uncertainty during the statutory transition, and the decision was later affirmed by the Calcutta High Court. The company assailed these orders before the Supreme Court, contending that the CLB, as a quasi-judicial body constituted under the repealed framework, lacked jurisdiction to invoke Section 5 of the Limitation Act.
Allowing the appeal, the Supreme Court held that the applicability of the Limitation Act was confined to proceedings before courts and does not extend to tribunals or quasi-judicial authorities unless the parent statute expressly so provides.
The Division Bench underscored that the CLB, even though deemed to be a court for limited purposes under Section 10E(4C) of the erstwhile Act, was not empowered to apply Sections 4 to 24 of the Limitation Act, including the power to condone delay. It rejected the argument that Section 433 of the Companies Act, 2013, which expressly extended the Limitation Act to proceedings before the NCLT and the National Company Law Appellate Tribunal (NCLAT), could be applied retrospectively or relied upon to infer similar powers in favour of the CLB.
It was noted that Section 433 came into force only on June 1, 2016, whereas the appeal in question had been filed and was already time-barred well before the establishment of the NCLT.
Drawing a clear doctrinal distinction, the Court reiterated that while the principles underlying Section 14 of the Limitation Act relating to exclusion of time may, in certain circumstances, be applied to quasi-judicial proceedings, the discretionary power to extend limitation under Section 5 stands on a fundamentally different footing. The latter involves judicial discretion to enlarge a prescribed limitation period and cannot be exercised by statutory bodies unless expressly authorised.
The Bench relied upon a consistent line of authority, including Officer on Special Duty v. Shah Manilal Chandulal, Prakash H. Jain v. Marie Fernandes, Om Prakash v. Ashwani Kumar, and Parson Tools v. Union of India, to reiterate that statutory limitation periods applicable to quasi-judicial forums were mandatory in nature and coud not be diluted through inherent powers or equitable considerations.
It further held that the limitation period prescribed under Section 58(3) of the Companies Act, 2013, was peremptory and not merely directory, and did not admit of extension in the absence of express statutory language to that effect. The Calcutta High Court had erred in sustaining such an order, it observed.
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