The Supreme Court held that the Company Law Board has no power under the Limitation Act to condone delay in appeals under the Companies Act. Justices J.B. Pardiwala and R. Mahadevan overturned a Calcutta High Court backed order.
NEW DELHI: The Supreme Court ruled that the Company Law Board (CLB) lacks the authority under Section 5 of the Limitation Act, 1963, to forgive delays in filing appeals under Section 58(3) of the Companies Act, 2013.
The ruling arose from a Civil Appeal challenging a decision by the Calcutta High Court, which had upheld the CLB’s order to condone a delay of 249 days in such an appeal.
The two-Judge Bench, consisting of Justice J.B. Pardiwala and Justice R. Mahadevan, stated,
“In light of the aforesaid, we find no merit in the submission put forth by Ms. Arora that even before the coming into force of Section 433 of the Act, 2013, there was no express exclusion of the provisions of the Act, 1963 and therefore, the CLB could be said to have the power under Section 5 of the Act, 1963 to condone the delay in preferring the appeal under Section 58(3) of the Act, 2013. The absence of express exclusion, by itself, cannot be said to have conferred the CLB with the power to condone delay.”
The Court noted that Section 433 of the Companies Act, which empowers the NCLT (National Company Law Tribunal) and the NCLAT (National Company Law Appellate Tribunal) to apply the provisions of the Limitation Act as applicable to their proceedings and appeals, cannot be interpreted as granting similar powers to the CLB.
Factual Background
The Appellant was a private limited company with 631 fully paid-up equity shares. The mother of the Respondent was a shareholder, possessing 20 shares of the Appellant company. She passed away in 1989, and two years prior, she had transferred the shares to the Respondent via her will. After obtaining probate for her mother’s will in 1990, the Respondent’s Advocate notified the Appellant company in 2013, 23 years later, requesting the registration of the shares. However, the company rejected this request within two months.
At that time, Section 111 of the former Companies Act, 1956, was in effect. Sub-sections (2) and (3) required that any appeal against the refusal to register shares be filed within two months of the notice.
The Respondent failed to do this, leading to another request for the transmission. The company was informed of potential legal action if the registration was not processed. Meanwhile, the 2013 Act replaced the prior legislation, and Sections 111 and 111A ceased to exist, replaced by Sections 58 and 59, respectively.
When the company did not respond, a petition under Section 111A of the earlier Act was filed, and CLB sought resolution within 15 days. A new appeal was subsequently initiated under Section 58 of the 2013 Act, accompanied by a request for condonation of the 249-day delay. The CLB approved the appeal, prompting the Appellant company to appeal to the High Court, which was ultimately dismissed, leading to the challenge in the Supreme Court.
Issues Involved: Whether the CLB, being a quasi-judicial body, could be said to have the power to condone the delay in filing an appeal under Section 58(3) of the Act, 2013? In other words, even if
Section 5 of the Act, 1963, per say, could not be applied to quasi-judicial bodies, whether the principles underlying Section 5 of the Act, 1963 be made applicable to an appeal under Section 58(3) of the Act, 2013, instituted before the CLB?
Observations of the Court
The Supreme Court, considering these circumstances, remarked,
“… it can be stated, without doubt, that the provisions of the Act, 1963 (provisions that lay down a prescribed period of limitation as well as Sections 4 to 24 of the Act, 1963 respectively) would only apply to suits, applications or appeals which are made under any law to ‘courts’ and not to those made before quasi-judicial bodies or tribunals, unless such quasi-judicial bodies or tribunals are specifically empowered in that regard.”
The Court underlined that the discretionary ability to extend the limitation period must be explicitly given to the relevant quasi-judicial body or tribunal.
It Stated,
“It is well-established that although the exercise of inherent powers are in addition to the powers specifically conferred on the concerned body or institution, yet such an exercise of power must be complementary to and not be in conflict with any express provision or be contrary to the intention of the legislature.”
The Court asserted that when a specific law governs the filing of suits, applications, or appeals before quasi-judicial entities, the savings provision in Section 29(2) of the Act, 1963 is irrelevant. Therefore, any quasi-judicial body or tribunal without the power to condone delays cannot extend the time purely based on the notion that the prescribed period is merely directory.
The Court emphasized that the Respondent should have pursued the appeal under Section 58(3) of the 2013 Act strictly within the designated timeframe.
It Stated,
“It is in this background that we are of the view that Section 433 which empowers the NCLT and the NCLAT respectively to apply the provisions of the Act, 1963, as far as may be, to proceedings and appeals before itself, cannot be borrowed to signify the existence of a similar power with respect to the CLB.”
The Court further pointed out the absence of explicit authority for the CLB to apply the Limitation Act provisions to its proceedings.
The Court reiterated,
“It is observed that the provisions of the Act, 1963 (provisions that lay down a prescribed period of limitation as well as Sections 4 to 24 of the Act, 1963 respectively) would only apply to suits, applications or appeals, as the case may be, which are made under any law to ‘courts’ and not to those made before quasi-judicial bodies or tribunals, unless such quasi-judicial bodies or tribunals are specifically empowered in that regard,”
The Court clarified that quasi-judicial bodies and tribunals cannot utilize Section 5 of the Limitation Act, unless expressly indicated and that the legal fiction of these bodies being considered courts must not extend beyond its intended restriction.
It noted,
“… the principles underlying Section 14 of the Act, 1963 could be applied to the provisions relating to quasi-judicial bodies unless there is any express indication to the contrary in the wording and scheme of the said provision. However, there exists a vital distinction between the principles underlying Sections 5 and 14 respectively,”
Final Order
Furthermore, the Court explained that the principles behind Sections 5 and 14 of the Act, 1963 cannot be analogously applied to quasi-judicial processes. In the first case, courts have discretion to modify the prescribed limitation period, while in the latter, the limitation period remains unchanged, and no delay is attributed to the litigant. Thus, time spent on unproductive legal proceedings does not affect the litigant’s position regarding filing the appeal or application.
The Court concluded that the limitation period prescribed under Section 58(3) of the 2013 Act should not be perceived as merely directory. The absence of additional language like “but not thereafter” or “shall” is not necessary to indicate that the period is mandatory.
The Court concluded,
“… the remedy of the respondent was already time-barred before the coming into force of Section 58(3) of the Act, 2013, let alone the coming into force of Section 433 of the Act, 2013. Hence, the change in law cannot enure to the benefit of the present respondent. … the High Court could be said to have committed an error in dismissing the statutory appeal filed under Section 10F of the erstwhile Act and thereby, affirming the order of the CLB condoning the delay of 249 days in filing the appeal under Section 58(3) of the Act, 2013,”
Consequently, the Supreme Court granted the Appeal and overturned the contested Judgment.
Advocate Nina R. Nariman represented the Appellant, while Senior Advocate Meenakshi Arora appeared for the Respondent.
Case Title: The Property Company (P) Ltd. v. Rohinten Daddy Mazda (Neutral Citation: 2026 INSC 33)
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