2024 (2) TMI 571 - AT - Companies Law

NCLAT condones 18-day delay in company appeal citing appellant's dental procedure indisposition under Section 421(3)

Negolice India Limited & Ors Versus Preeti Jaikishan Bhagchandka & Ors

The NCLAT Principal Bench condoned an 18-day delay in filing a company appeal under Section 421(3) of the Companies Act, 2013. The delay was attributed to ... Condonation of delay of 18 days in preferring the instant Company Appeal - Section 421(3) of the Companies Act, 2013 - only ground pleaded for delay was the alleged indisposition of the 2nd Appellant - bonafide reasons for condoning the delay or not - HELD THAT:- Where the delay in preferring an Appeal/Restoration Application/Review etc. is not wanton or intentional, the Court would not be justified in rejecting the ‘delay condonation application’ on the basis that the Applicant had not produced a medical certificate, to show that he/she was ill and the Doctor had advised him/her to take rest, as per decision in Marry Susheela V. Shalee Kasturibai [2014 (4) TMI 1302 - MADRAS HIGH COURT]. When substantial justice and technical consideration are pitted against each other, cause of substantial justice deserves to be preferred, for the opposite party, cannot claim to have vested right in justice being denied to him / them, because of a non-deliberate delay. There cannot be any presumption or assumption that the delay as occasioned, wantonly, or on account of culpable negligence or on account of malafides - refusing to condone the delay can even result in a ‘meritorious matter’ being thrown out at the early stage and cause of justice being defeated. Also that, when the delay in question is condoned, the highest thing that can happen is that the case will be decided on merits after hearing the parties. This ‘Tribunal’ on a careful consideration of respective contentions, on going through the facts and circumstances of the instant case comes to a ‘cocksure conclusion’ that the delay of 18 days in preferring the instant ‘Appeal’ has occurred on account of the indisposition of the 2nd Appellant, the authorised signatory of the 1st Appellant. Furthermore, on 01.05.2023, five days before the expiry of limitation period, the 2nd Appellant / MD and the authorised signatory of the 1st Appellant underwent tooth extraction, tooth implant etc. and the two weeks period came to an end of 14.05.2023 and the further delay of 10 days from 14.05.2023 to 24.05.2023 had occurred, according to the Appellants in the course of 2nd Appellant furnishing instructions in regard to the preferring of Appeal along with ancillary applications. This ‘Tribunal’ by resorting to an elastic approach and the delay of 18 days that has occurred is covered within the further limitation period of 45 days prescribed in proviso to Section 421(3) of the Companies Act, 2013, condones the said delay of 18 days subject to a condition that the Petitioners/Appellants are hereby directed to pay a cost of Rs. 8000/- (Rupees eight thousand only) to the Prime Ministers’ Relief Fund to be paid within two weeks from today. Appeal allowed. Issues Involved:1. Condonation of Delay in Filing Appeal2. Appellants' Pleas3. Respondent's Contentions4. Legal Precedents and Tribunal's AnalysisCondonation of Delay in Filing Appeal:The Petitioners/Appellants filed IA No.2612/2023 seeking condonation of an 18-day delay in filing Comp App (AT) No.104/2023 under Section 421(3) of the Companies Act, 2013. The limitation period expired on 06.05.2023, but the appeal was filed within the further 45 days allowed by the proviso to Section 421(3).Appellants' Pleas:The Appellants argued that the delay was due to the 2nd Appellant being unwell and unable to instruct counsel. They cited the Supreme Court's decisions emphasizing a justice-oriented approach in condoning delays. The Appellants also rectified defects in their initial filing within the prescribed time and re-filed the appeal on 31.05.2023. They contended that the delay was not intentional and that refusing to condone it would cause irreparable harm.Respondent's Contentions:The 1st Respondent opposed the condonation, arguing that the Appellants showed disregard for the law by altering their stand between the pre-defect and post-defect applications. They claimed the Appellants failed to demonstrate sufficient grounds for the delay and accused them of raising false averments. The Respondent also cited several legal precedents emphasizing that delays should only be condoned for unavoidable reasons and with due diligence.Legal Precedents and Tribunal's Analysis:The Tribunal considered various legal precedents which stressed that delays should only be condoned when justified by sufficient cause. The Tribunal noted that the Appellants consistently mentioned the 2nd Appellant's illness as the reason for the delay and provided a medical certificate supporting this claim. It observed that the delay was satisfactorily explained and was not due to negligence or inaction.Conclusion:The Tribunal condoned the 18-day delay, subject to the Appellants paying a cost of Rs. 8000 to the Prime Minister's Relief Fund within two weeks. The Appellants were directed to produce the receipt of payment to the Registry. IA No.2612/2023 in Comp App (AT) No.104/2023 was allowed with no further costs.