Limitation Act Applies Only to Courts, Not Tribunals: India Supreme Court

The Supreme Court on Wednesday reiterated that quasi-judicial bodies such as the Company Law Board (CLB) or tribunals cannot condone delays in filing appeals unless such power is expressly conferred by statute, holding that the authority to condone delay under the Limitation Act rests solely with courts.

 

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

 

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 governing statute specifically empowers them to do so.

 

The dispute arose from a claim for transmission of shares under a will executed by the respondent’s mother. Although probate was granted in 1990, the respondent sought transmission only in March 2013. The company rejected the request the following month, but the respondent failed to challenge the rejection within the two-month limitation period prescribed under the Companies Act, 1956.

 

In February 2014, during the transition to the Companies Act, 2013 and before the National Company Law Tribunal (NCLT) became operational, the respondent filed a belated appeal before the CLB. The CLB condoned the 249-day delay, a decision later upheld by the Calcutta High Court, prompting the company to approach the Supreme Court.

 

Allowing the appeal, the Supreme Court held that the CLB, constituted under the erstwhile Companies Act, 1956, was deemed to be a court only for limited purposes and lacked the authority to invoke Section 5 of the Limitation Act to condone delay. The Court observed that the High Court had erred in affirming the CLB’s order.

 

The bench also rejected reliance on 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 ruled that the provision could neither be applied retrospectively nor borrowed to confer similar powers on the CLB.

 

While acknowledging that principles under Section 14 of the Limitation Act may, in certain circumstances, be applied to quasi-judicial bodies, the Court held that the power under Section 5 to condone delay cannot be exercised without explicit statutory authority. It further ruled that inherent powers under the CLB Regulations could not be used to extend limitation periods.

 

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 both the CLB and the Calcutta High Court.

 

 

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