2017 (4) TMI 629 - HC - Companies Law

Court dismisses company appeal for delay in lodging appeal under Companies Act, emphasizing limited grace period

Santosh Kumar Hegde Versus Parimala Hospitality Private Limited and Others

The court dismissed the company appeal due to a 135-day delay in lodging the appeal against an order by the Company Law Board. The court held that under ... Company application barred by limitation provided under section 10-F of the Companies Act, 1956 - condonation of delay - Held that:- There is no dispute about the proposition that the appeal under section 10-F of the Companies Act, 1956 against the order of the Company Law Board can arise and can be entertained by the Company Court only if the questions of law arises and not otherwise. The questions of law if any arises in Company Appeal however, can be considered only if such appeal under section 10-F is within the time prescribed under the provisions of section 10-F and only upon the Company Court condoning the delay upto the period of 60 days, if sufficient cause is made out by the appellant and not otherwise. In my view, even if the applicant makes out a sufficient cause for delay beyond the grace period of 60 days, the Court has no power to condone such delay. There is thus no substance in the submission made by the learned counsel for the applicant. Insofar as the Doctor's certificate annexed at Exhibit “A” to the company application is concerned, in my view since this Court has no power to condone delay beyond the period of 60 days and admittedly in this case delay is 135 days, Doctor's certificate produced by the applicant in support of his case that he was prevented from sufficient cause from filing appeal within the period of 60 days is of no assistance to the applicant and no cognizance thereof can be taken by this Court. The company application is barred by limitation provided under section 10-F of the Companies Act, 1956 which is a self-contained provision. The company application is accordingly dismissed. Issues:Delay in lodging company appeal, power of court to condone delay beyond 60 days, legislative intent in Companies Act, exclusion of Limitation Act provisions.Analysis:1. The applicant sought condonation of a 135-day delay in lodging a company appeal against an order by the Company Law Board. The respondent contended that the court lacked the power to condone delays beyond 60 days without sufficient cause.2. The applicant explained the delay was due to severe medical conditions and stress, supported by a medical certificate. The applicant argued that the court could use its powers under section 5 of the Limitation Act, 1963, citing a Supreme Court judgment in Patel Brothers vs. State of Assam & Ors.3. The respondent objected, stating that the Companies Act, 1956, as a special act, excluded the application of section 5 of the Limitation Act. The court referred to the judgment in Smt.Hetal Alpesh Muchhala vs. Adityesh Educational Institute & Ors., emphasizing the limited power to condone delays under section 10-F of the Companies Act.4. The court further discussed the legislative intent behind section 10-F, emphasizing the restriction on condoning delays beyond 60 days. It held that the provision for a further period not exceeding 60 days was a maximum grace period, not part of the limitation period.5. Referring to the judgments in Patel Brothers, Smt.Hetal Alpesh Muchhala, and Jagdish Lal Gupta, the court concluded that the power to condone delays beyond 60 days was not available, even in cases involving questions of law. The court dismissed the company application as barred by the limitation under section 10-F.6. Despite the medical certificate provided, the court held that since the delay exceeded 60 days and the court lacked the power to condone delays beyond that period, the certificate could not assist the applicant. Consequently, the company application was dismissed, leading to the dismissal of the company appeal as well.