On Wednesday, the Supreme Court held that tribunals cannot assume the power to condone delay unless the statute governing them expressly confers such authority. Setting aside concurrent orders of the Company Law Board (CLB) and the Calcutta High Court, the Court ruled that statutory timelines before tribunals are not elastic and cannot be extended through inherent powers or by borrowing provisions from the Limitation Act, 1963. The Division Bench of Justice J.B. Pardiwala and Justice R. Mahadevan allowed the appeal, holding that the CLB lacked jurisdiction to condone a 249-day delay in filing an appeal against the refusal to register transmission of shares.
Brief Facts:
The case arose from a dispute over the transmission of 20 equity shares devolved upon the respondent under a testamentary instrument for which probate had been granted. Despite this, the respondent sought transmission after a prolonged lapse of time, which the company declined.
Under the Companies Act, 1956, an appeal against the refusal of transmission was required to be filed before the Company Law Board within the prescribed period. The respondent failed to do so. During the transitional phase following the coming into force of the Companies Act, 2013, but prior to the constitution of the National Company Law Tribunal, the respondent invoked Section 58(3) of the Companies Act, 2013, before the Company Law Board, along with an application seeking condonation of a substantial delay. The delay was condoned.
A statutory appeal under Section 10F of the Companies Act, 1956, was dismissed, affirming the condonation of delay, which led the company to pursue the matter before the Supreme Court.
Contentions:
The Appellant contended that the CLB, being a quasi-judicial body, was not a “court” within the meaning of the Limitation Act, 1963 and therefore had no power to condone delay under Section 5 of the Limitation Act. It was argued that neither the Companies Act, 1956, nor the Companies Act, 2013, conferred any such power on the CLB, and that Regulation 44 of the CLB Regulations could not be invoked to defeat a mandatory limitation period.
The respondent, on the other hand, relied on the transition to the Companies Act, 2013 and sought to draw sustenance from Section 433 of the Companies Act, 2013, which applies the Limitation Act to proceedings before the NCLT and NCLAT, contending that a liberal approach to limitation was warranted.
Observation of the Court:
The Court rejected the approach adopted by the CLB and the High Court, holding that the authority to condone delay under the Limitation Act is confined to courts unless a statute expressly extends that power to a tribunal. The Bench observed that “The provisions of the (Limitation) Act, 1963…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 noted that under Section 10E(4C) of the Companies Act, 1956, the CLB was deemed to be a court only for limited purposes. That legal fiction could not be stretched to confer powers under Section 5 of the Limitation Act.
The Bench further held that statutory limitation periods prescribed under Section 58(3) of the Companies Act, 2013, are mandatory in nature, even in the absence of phrases such as but not thereafter. It cautioned that tribunals cannot be given a free hand to disregard limitation on equitable considerations.
On the attempt to rely on Section 433 of the Companies Act, 2013, the Court made it clear that the provision could not be applied retrospectively to the CLB. The Court stated that “Section 433 of the Act, 2013 which empowers the NCLT and the NCLAT respectively to apply the provisions of the Act, 1963, as far as may be, to the proceedings and appeals before itself, cannot be borrowed to signify the existence of a similar power with respect to the CLB. Moreover, 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 Court also held that Regulation 44 of the CLB Regulations, which preserves inherent powers, could not be used to override a statutory bar of limitation, observing that inherent powers are meant to address procedural gaps, not to create substantive jurisdiction where none exists.
The decision of the Court:
In light of the foregoing discussion, the Apex Court allowed the appeal and set aside the orders passed by the Company Law Board and the Calcutta High Court. The Court held that the appeal filed by the respondent before the CLB was barred by limitation and ought to have been dismissed at the threshold, as the CLB had no authority in law to condone the delay of 249 days.
Case Title: The Property Company (P) Ltd. Vs. Rohinten Daddy Mazda
Case No.: Civil Appeal No. 92 of 2026
Coram: Hon’ble Justice J.B. Pardiwala and Hon’ble Justice R. Mahadevan
Advocate for the Petitioner: AOR R. N. Keswani, Adv. Ramesh N. Keswani, Adv. Nina R. Nariman, Adv. Pranav Singal, Adv. Ravi Raghunath Vachher, and Adv. Vinayak Sharma.
Advocate for the Respondent: Adv. Indranil Ghosh, Adv. Palzer Moktan, and Adv. Satya Mitra (AOR).
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