Jose Peter & Ors. vs Henry James & Ors.

[Per: Justice Sharad Kumar Sharma, Member (Judicial)

The Appellants in the instant Company Appeal challenge the Impugned Order dated 21.12.2021, as rendered in CA/44(KOB)/2019. As a consequence of the impugned order which was decided under proceedings held under section 59 of the Companies Act, the Learned Adjudication Authority had come to the conclusion that the induction of Respondent No.2 to 20 in the said Company Petition as new members of the Company by the Board of Directors of the Company, was in violation of Article 1 to 5 of Article of Association of the Company which deals with the matter of enrolment of the new members of the company, and accordingly directed that their names be removed from the register of members of the Respondent Company and that, the said register be modified and an appropriate document be filed before the Registrar of Companies, Kerala.

The relevant directions given therein are extracted here under.

When the matter was taken up today the respondent’s counsel raised a preliminary objection that, the appeal under section 421 at the behest of the appellant as against the Impugned Order would not be tenable since having been preferred beyond the prescribed period of limitation as provided under section 421(3) of the Companies Act, and hence it deserved to be rejected at its threshold.

In support of his contention, the learned counsel for the respondent has submitted that the following dates would be relevant for consideration, the aspect of limitation to make the appeal sustainable before this Appellate Tribunal under section 421.

According to the records of the registry this Company Appeal was preferred before the Registry of the Tribunal on 31.05.2022, the date of Impugned order is 21.12.2021 and the certified copy of the order was made available on 23.12.2021. 90 days period from the date of receipt of the order expired on 23.03.2022. Because of the order of Hon’ble Apex Court in MA No. 21/2022 in MA No. 665/2021 in Suo Moto WP(C) No. 3/2022 the period from 15.03.2020 till 28.02.2022 stood excluded for the purpose of limitation in all judicial/quasi-judicial proceedings and all persons were allowed from 01.03.2022, a limitation period of 90 days or, actual balance period of limitation remaining which ever is greater. The learned counsel for the Respondent has argued that the 90-days period from 01.03.2022 would be expiring on 29.05.2022 and in that eventuality, the appeal having been preferred on 31.05.2022, the same would be barred by limitation and hence it deserved to be rejected on this count itself.

After having heard the learned counsel for the parties on this aspect with regards to the period of limitation, a reference to Section 421(3) of the Companies Act which deals with the aspect of limitation becomes relevant. On a simpliciter reading of section 421(3) it provides that every appeal against an order shall be preferred within 45 days from the date on which a copy of the order the Tribunal is made available to the person aggrieved, which in the instant case would be 23.12.2021. The proviso to Section 421(3) states that the Appellate Tribunal can extend the said period further by a maximum of 45 days on production of sufficient cause. Thus, the limitation period as per Companies Act expired on 23.03.2022. The limitation period of 90 days from 01.03.2022 as provided by the order of the Hon'ble Apex Court MA No. 21/2022 in MA No. 665/2021 in WP(C) No.3/2022 expired on 29.05.2022. Since the said date was a Sunday, the next working day would be taken for the purposes of determining the limitation which would be 30.05.2022. Therefore, limitation period for filing the Appeal ended on 30.05.2022. Since the Appellant did not file the Appeal within 30.05.2022 and instead chose to file the same on 31.05.2022, it will have to be barred by limitation. The argument of the learned counsel for the appellant that, since 29.05.2022 was Sunday, the appeal couldn’t have been filed and hence it is to be excluded from the period of computation of limitation will not make any difference to the inference to be drawn by us because in such a case limitation would be expiring on 30.05.2022. Since the appeal itself was filed on 31.05.2022 the same would be barred by limitation because the upper period of limitation prescribed under the proviso is not extendable beyond the limit given under the statute. In that eventuality on a simpliciter determination of the number of days delay which has chanced in preferring the appeal since being beyond the period of 90 days which is the upper limit provided under Section 421(3) and also beyond the extended limitation period as granted by Hon’ble Apex Court, the appeal would stand barred by limitation.

The learned counsel for the Appellant has contended before this Appellate Tribunal in his written submission that the delay in filing the Appeal was because of Covid Pandemic, and that it was neither wilful nor deliberate and that they may be allowed to file a condone delay application in the interest of justice. It is to be kept in mind that keeping this in view, Hon’ble Apex Court has already given a period of limitation of 90 days starting from 01.03.2022 in its order in MA No. 21/2022 in MA No. 665/2021 in WP(C) No. 3/2020 and it is expected that the parties to a dispute would comply by the said order. Since the Appellants have failed to file its appeal within the time given to all litigants in their country, it is clear that they have shown a complete lack of diligence in pursuing their Appeal and hence no further leniency can be granted, when it is specifically barred by law.

Accordingly, the Company Appeal (AT) (CH) No. 47/2023 is hereby dismissed as barred by limitation.