2023 (10) TMI 155 - SC - Companies Law

Supreme Court allows appeal, extends time for filing written statements due to COVID-19

Aditya Khaitan & Ors. Versus IL and FS Financial Services Limited

The Supreme Court allowed the appeal, setting aside the High Court's decision to dismiss applications for extension of time to file written statements. ... Condonation of delay in filing application - extension due to Covid-19 pandemic - period of 30 days to file the written statements had expired on 08.03.2020 - whether the High Court justified in rejecting the application for extension of time dated 20.01.2021 and in not taking the written statements on record? - HELD THAT:- The very basis of the judgment in Sagufa Ahmed [2020 (9) TMI 713 - SUPREME COURT] that under the 23.03.2020 order, only the period of limitation has been extended and not the period up to which delay can be condoned, has been taken away by expanding the protection by excluding the period even for computing outer limits within which the court or tribunal can condone delay. This is an important subsequent aspect which has a great bearing in deciding the present controversy. Prakash Corporates case [2022 (2) TMI 1268 - SUPREME COURT] also notices the fact that the order of 08.03.2021 and subsequent orders also by a Bench of three Hon’ble Judges were not and could not have been available for the Bench which decided Sagufa Ahmed’s case since Sagufa Ahmed’s case was decided on 18.09.2020. In Prakash Corporates, though the period of 30 days for filing written statements expired on 05.02.2021 and the 120-day outer limit expired on 06.05.2021, written statements notarized on 07.07.2021 was directed to be taken on record. The Court in Prakash Corporates relied on the orders of 23.03.2020, 08.03.2021, 27.04.2021 and also noticed the order of 23.09.2021 while so ordering. While summons was served on 07.02.2020, the 30 days period expired on 08.03.2020 and the outer limit of 120 days expired on 06.06.2020. The application for taking on record the written statements and the extension of time was filed on 20.01.2021. Applying the orders of 08.03.2021 and the orders made thereafter and excluding the time stipulated therein, the applications filed by the applicants on 19.01.2021 are well within time. The judgment passed by the High Court needs to be set aside. The principle underlying the orders of this Court dated 08.03.2021, 27.04.2021 and 23.09.2021, in In Re: Cognizance for Extension of Limitation, albeit those orders being passed, subsequent to the impugned order, would enure to the benefit of the applicants-defendants. The Appeals are allowed. Issues Involved:1. Whether the High Court was justified in rejecting the application for extension of time to file written statements.2. Applicability of Supreme Court orders extending limitation periods due to COVID-19.Issue 1: Rejection of Application for Extension of TimeThe High Court dismissed the applications for taking on record the written statements as the period of 30 days to file had expired on 08.03.2020, and the further condonable period of 90 days expired on 06.06.2020. The High Court held that the Supreme Court's order dated 23.03.2020 in Suo Motu Writ Petition (C) No. 3 of 2020, effective from 15.03.2020, would not benefit the applicants since the limitation period had already expired. The High Court relied on the judgment in Sagufa Ahmed and Others Vs. Upper Assam Plywood Products Private Limited and Others (2021) 2 SCC 317, which stated that the Supreme Court orders extended only 'the period of limitation' and not the period up to which delay can be condoned.Issue 2: Applicability of Supreme Court Orders Extending Limitation PeriodsThe Supreme Court examined the orders passed in Suo Motu Writ Petition (C) No. 3 of 2020, including those dated 23.03.2020, 06.05.2020, 10.07.2020, 08.03.2021, 27.04.2021, and 23.09.2021. The Court noted that these orders provided extraordinary measures in extraordinary circumstances to ensure justice during the pandemic. The Court distinguished the case from Sagufa Ahmed, noting that subsequent orders expanded the protection to include the period for computing outer limits within which the court or tribunal can condone delay.Discussion and Conclusion:The Supreme Court emphasized that during the pandemic, parties could not be said to be sleeping over their rights. The Court highlighted the extraordinary measures taken to protect parties' rights and remedies. The Court noted that subsequent orders, particularly the order dated 08.03.2021, expanded the protection by excluding the period even for computing outer limits within which the court or tribunal can condone delay.Applying these principles, the Supreme Court found that the applications filed on 20.01.2021 were within the extended time limits. The judgment of the High Court was set aside, and the written statements filed on 20.01.2021 were directed to be taken on record. The suit was ordered to proceed thereafter. The appeals were allowed with no order as to costs.