2018 (5) TMI 997 - AT - Companies Law

Appellate Tribunal clarifies Registrar's power limits on time extensions under NCLAT Rules

The Hon'ble Appellate Tribunal ruled that the Registrar could not extend the time for compliance under Rule 26 of the NCLAT Rules, 2016, as the appeal was ... Rectification of the defects causing delay in presenting the Appeal - condonation of delay - Computation of period of limitation - computation of period of 45 days for filing the Appeal - Is the time given for complying the direction to cure the defects liable to be extended under sub-rule (3) to rule 26 of the Rules? - Held that:- In the case on hand, the initial presentation of the appeal under Rule 22 on 19-02-2018 is within the period of limitation. The subsequent presentation after curing the defects on 27-03-2018 is apparently much beyond the period of 45 days. It is true that the proviso to sub-section (3) to section 421 of the Act provides that the period of filing an appeal can be extended for a further period not exceeding 45 days. However, the power to extend the period provided under the proviso can be invoked only by the Hon’ble Appellate Tribunal. Sub-rule (3) to rule 26 enables the Registrar to extend the time for compliance given under sub-rule (2) to rule 26. However, the Rules cannot override the provisions of the Act. The power under sub-rule (3) to rule 26 to extend the time given for compliance can be exercised by the Registrar, provided it is within the period of 45 days referred to in sub-section (3) to section 421 of the Act. In the instant case, as presentation of the appeal after curing the defects is beyond the period of 45 days, the time granted for compliance under sub-rule (2) to rule 26 cannot be extended by invoking the power under sub-rule (3) to rule 26. Therefore, the matter be placed before the Hon’ble Appellate Tribunal for appropriate orders. Point answered accordingly. Issues:1. Extension of time for compliance under Rule 26 of the NCLAT Rules, 2016.2. Interpretation of the provisions of the Companies Act, 2013 regarding the filing of an appeal within the prescribed period.Issue 1: Extension of Time for Compliance under Rule 26 of the NCLAT Rules, 2016The Applicant sought an extension of time for compliance under sub-rule (2) to Rule 26 of the NCLAT Rules, citing delays due to rectification of defects in the appeal papers. The appeal was presented before the Registry on 19-02-2018, found defective, and the Applicant was directed to cure the defects within seven days. However, the appeal was submitted after curing the defects only on 27-03-2018, resulting in a delay of 28 days. The Registrar has the power under sub-rule (3) to rule 26 to extend the time for compliance but only within the 45-day period specified under section 421 of the Companies Act, 2013. As the appeal was filed beyond the 45-day limit, the Registrar could not extend the time for compliance. The matter was referred to the Hon'ble Appellate Tribunal for appropriate orders.Issue 2: Interpretation of the Companies Act, 2013 ProvisionsThe appeal in question was against an order dated 15-01-2018 by the NCLT, Chennai Bench. As per section 421 of the Companies Act, 2013, an appeal must be filed within 45 days from the date the impugned order is made available to the aggrieved person. In this case, the impugned order was issued on 22-01-2018, and the period for filing the appeal would expire on 08-03-2018. While the initial presentation of the appeal on 19-02-2018 was within the limitation period, the subsequent presentation after curing defects on 27-03-2018 exceeded the 45-day limit. Although the Act allows for a further extension of up to 45 days, this power rests with the Hon'ble Appellate Tribunal, not the Registrar. Therefore, the appeal filed after the 45-day period could not benefit from an extension of time for compliance under the NCLAT Rules, 2016.ConclusionThe judgment addresses the Applicant's request for an extension of time for compliance under Rule 26 of the NCLAT Rules, 2016, and interprets the provisions of the Companies Act, 2013 regarding the filing of appeals within the prescribed period. It clarifies that while the Registrar can extend time for compliance within the statutory limit, any extensions beyond the 45-day period must be granted by the Hon'ble Appellate Tribunal. The judgment emphasizes the importance of adhering to statutory timelines and the limitations of the Registrar's power in granting extensions.