• Welcome to itatonline.org Forum.
 

News:

Contact details of departmental representatives is available.

Main Menu

Condonation of delay for unusual period .... 2 years...

Started by vyakul, January 30, 2009, 09:43:54 PM

Previous topic - Next topic

vyakul

I have been trying to understand the possibility of condonation of delay during the appeal proceedings.
I am sharing the collection of information for this wider audience. :)

The assessee didnot file the petition for appeal within time limit. it got delayed by more than 2 years. Question arose, whether such petition could be admitted after condoning this inordinate delay.

The input is as follows.
IT provsion
1) Time limit for filing appeals . (Provided clearly in the IT Act and limitation is there)
2) Time limit for condoning the delay. (Not provided  and hence not limited)
3) For condonation. Show cause for such delay is important
Two possibilities
1) When a legislation provides for time limit for filing appeals and for condonation. In that case, that particular legislation will prevail and section 5 of the Limitation Act 1963, may not have a jurisdiction.
2) When a legislation dont provide for time limit for condonation of delay. In that case, Sec 5 of the limiation act 1963 is applicable.
In our case, We need to opt for the second one, as the IT Act dont have any limiation for condonation of delay. Means Section 5 of the limiation act is applicable for condoning the delays for the IT Act.

Now
When it come to the question? Delay of about 2 years. Can this be condoned. ?
The following extract from the decided case law
HIGH COURT OF PUNJAB AND HARYANA,Pawan Goel, v.KMG Milk Food Ltd.PERMOD KOHLI, J
is helpful

"The condonation of delay under section 5 of the 1963 Act is permissible without any limit, provided the applicant is able to establish a sufficient cause. It is a settled law that once the Court is convinced or satisfied regarding the existence of a sufficient cause, the length of a period becomes irrelevant. However, this proposition is attracted only if section 5 is applicable. [Para 24]"

From the above it is clear that, The delay of 2 years could be condoned if there is a sufficient cause.

Hope one finds it useful
Regards
Sathya
vyakul@gmail.com

bhaskar rao

Dear Sir,

Can you pl give citation of judgemet of PH Court. it is very imp judgement.

Yours faithfully,

Bhaskar Rao ITP

vyakul

Sir

We are providing the case law in full :) Hope you find this useful
sathya
vyakul@gmail.com
---
HIGH COURT OF PUNJAB AND HARYANA

Pawan Goel

v.

KMG Milk Food Ltd.

PERMOD KOHLI, J.

C.M.A. NO. 114 OF 2007

AND C.A. NO. 21 OF 2007

IN C.P. NO. 114 OF 2006

FEBRUARY 22, 2008

Section 10F of the Companies Act, 1956, read with sections 14 and 5, of the Limitation Act, 1963 - Company Law Board - Appeal against orders of - Appellant had sought for interim directions for restraining directors of respondent-company from acting as directors during pendency of company petition under sections 397 and 398 before CLB, but same was disallowed by CLB vide its order dated 24-11-2006 - Against said order of CLB, appellant filed an appeal under section 10F along with an application for condonation of delay before Delhi High Court on 17-2-2007 - Respondent raised an objection regarding jurisdiction of Delhi High Court and, therefore, appellant withdrew appeal as well as said application - Appellant filed appeal and application for condonation of delay before instant Court on 16-5-2007 and sought for exclusion of period spent in pursuing proceeding before Delhi High Court - Whether period spent in a wrong forum does constitute a sufficient cause and can form valid basis for condoning delay under section 5 of 1963 Act, subject to satisfaction of Court - Held, yes - Whether even if period spent before Delhi High Court constituted sufficient cause for extension of period under section 5, read with section 14 of 1963 Act, those sections could not be applied de hors proviso to section 10F to extend limitation beyond sixty days (total 120 days), for filing an appeal as proviso to section 10F does not permit such extension - Held, yes - Whether, therefore, instant appeal having been filed beyond 120 days period was barred by time - Held, yes - Whether even otherwise, since no question of law had arisen from interim order of CLB, appeal filed under section 10F was to be dismissed - Held, yes

Words and phrases : Expression 'not exceeding' as occurring in section 10F of the Companies Act, 1956

FACTS

The appellant had filed an application seeking interim direction for restraining directors of respondent-company from acting as directors during pendency of company petition under sections 397 and 398 before CLB, but same was disallowed by the CLB by its interim order dated 24-11-2006. Against said order of CLB, the appellant filed an appeal under section 10F along with an application for condonation of delay before the Delhi High Court on 17-2-2007. The respondent raised an objection regarding jurisdiction of the said Court and, therefore, the appellant withdrew the appeal as also the accompanying application on 16-4-2007. In the instant appeal filed on 16-5-2007 against the impugned order of the CLB, the appellant also filed an application seeking exclusion of the 58 days period spent in pursuing the proceedings before the Delhi High Court. The respondent opposed the application on two counts viz., (i) section 14 of the 1963 Act had no application in appeal, and (ii) the Court had no jurisdiction to condone the delay beyond sixty days over and above the period of sixty days prescribed for filing the appeal under section 10F.

HELD

The period of limitation prescribed under section 10F for preferring an appeal is 60 days. The period, however, can be extended for a further period of 60 days in view of the proviso to section 10F. The language of section prohibits the extension of period beyond 60 days as is evident from the expression "further period not exceeding sixty days". [Para 9]

It was an admitted case of the parties that when the appeal was initially filed before the Delhi High Court, it was filed beyond an initial period of sixty days which expired on 23-1-2007 and the appeal was, thus, delayed by 25 days. Even when the appeal was withdrawn from the Delhi High Court on 16-4-2007, another period of 30 days had been consumed in filing the appeal before the instant High Court. There was nothing on record or in the instant application to explain the period between the date of withdrawal and filing of the appeal before the instant High Court. [Para 10]

The first question that needed consideration was whether the period spent in pursuing the appeal before the Delhi High Court could be excluded in terms of section 14 of the 1963 Act. [Para 11]

Even if it is presumed that section 14 of the 1963 Act is not attracted in the appeal for the purposes of exclusion of period in pursuing the remedy in a wrong forum/Court, the plea can validly constitute a sufficient cause for condoning the delay under section 5 of the 1963 Act, if the Court accepts the same. Thus, the period spent in a wrong forum does constitute a sufficient cause and can form valid basis for condoning the delay under section 5 of the 1963 Act, subject to satisfaction of the Court. Then a related question arose in the instant appeal whether section 5, read with section 14, of the 1963 Act can be invoked to condone the delay in view of the specific provision of section 10F read with proviso which itself provides a period of limitation different than the period provided under Schedule to the 1963 Act. The question of sufficient cause has been taken care of under the proviso to section 10F. Therefore, the period spent by the appellant in pursuing the appeal before the Delhi High Court between 17-2-2007 to 16-4-2007, could be considered for exclusion from the total period of limitation prescribed under law, if it was found, that it constituted sufficient cause in the facts and circumstances of the instant case. [Para 20]

As a matter of fact, the appellant seemed to have pursued his remedy before the Delhi High Court in a callous and negligent manner. It was not that the question of jurisdiction was raised in routine, the objection of jurisdiction of the Delhi High Court was based upon a judgment of the Apex Court in a similar matter and the judgment in the case of Stridewell Leathers (P.) Ltd. [1994] 79 Comp. Cas. 139, was also noticed by the Delhi High Court in its interlocutory order, even then the appellant chose to continue with the appeal. That conduct of the appellant was sufficient to deny him the benefit of section 14 of the 1963 Act, as he had not pursued the remedy with due diligence but in a callous and negligent manner, even if it was presumed that his initial approach was due to ignorance of law. Even otherwise, the appellant could not claim the benefit of section 14 of the 1963 Act, he having filed the appeal before the Delhi High Court beyond limitation. There was no affidavit of counsel who filed an appeal before the Delhi High Court to show the bona fide mistake regarding the period of limitation as stated in the application under section 5 of the 1963 Act, filed before the Delhi High Court. [Para 22]

The next question was as to whether the appellant was entitled to seek condonation of delay under section 5, read with section 14, of the 1963 Act or the period of limitation can be extended beyond sixty days over and above initial period of sixty days as prescribed under section 10F. [Para 23]

The condonation of delay under section 5 of the 1963 Act is permissible without any limit, provided the applicant is able to establish a sufficient cause. It is a settled law that once the Court is convinced or satisfied regarding the existence of a sufficient cause, the length of a period becomes irrelevant. However, this proposition is attracted only if section 5 is applicable. [Para 24]

The Companies Act is a special law. Under the normal circumstances, the provisions of the Limitation Act will have application to all appeals and applications under the Companies Act, unless a different period of limitation is prescribed. The Company Law itself has prescribed a period of limitation for filing the appeal and also for condonation of delay. Hence, condonation of delay for filing the appeal beyond the prescribed period of limitation is by virtue of the proviso to section 10F. This proviso can be considered to be akin to section 5 of the 1963 Act. However, the proviso imposes limitation for extension of time in filing the appeal beyond the prescribed period of limitation, the expression used in section 10F being 'further period not exceeding sixty days'. [Para 25]

Exclusion of the application of section 5 of the 1963 Act can be implicit or explicit. It depends upon the language used in a particular statute. The intention can only be gathered from the expression contained in the statute. The proviso to section 10F has created an absolute bar for extension of period of limitation beyond sixty days apart from the period of limitation of sixty days prescribed under section 10F. The expression 'not exceeding' does not permit any further extension and it seems that the true import, purport and construction of the proviso is to restrict the total period of limitation to 120 days, i.e., sixty days principal and sixty days by extension, subject to existence of sufficient cause in a given case. Any other interpretation would amount to committing violence to the statute itself which is impermissible under law. [Para 26]

Where a particular statute does not apply to section 5 of the 1963 Act expressly or even impliedly in a special or local law itself, it shall be presumed that the exclusion is express. Section 29(2) of the 1963 Act not only excludes the application of section 5 of the 1963 Act but also other sections from sections 4 to 24 of the 1963 Act. Thus, section 14 of the 1963 Act also stands excluded from its application for purposes of either condoning the delay or exclusion of the period on the ground envisaged therein notwithstanding existence of sufficient cause. Thus, even if the period spent before the Delhi High Court constituted sufficient cause for extension of period under section 5, read with section 14 of the 1963 Act, those sections could not be applied de hors proviso to section 10F to extend the limitation beyond sixty days in addition to the original period of sixty days (total 120 days), for filing an appeal as proviso to section 10F does not permit such extension. Applying this principle, the maximum period available to the appellant for preferring the appeal was 120 days upto 24-3-2007, subject to the condition that the appellant had shown sufficient cause for condonation up to sixty days beyond the prescribed period of sixty days. The initial period of 60 days in filing the appeal under section 10F expired on 23-1-2007 and the extended period under the proviso to section 10F expired on 24-3-2007. Hence, even if the contention of the appellant was accepted of that he calculated the initial period of filing the appeal as 90 days and the part of the period spent in the Delhi High Court was also considered to be the sufficient cause, it could not be extended beyond 120 days, i.e., 24-3-2007. The instant appeal having been filed on 16-5-2007 was barred by time. [Para 30]

Even though, the application for condonation of delay/exclusion of period under section 5, read with section 14, of the 1963 Act had been dismissed, the impugned order was considered. The CLB had simply refused to grant ad interim order restraining the directors of the respondent-company from acting as directors during the pendency of the company petition before the CLB. Existence of question of law is sine qua non for filing an appeal under section 10F. No such question of law had arisen in refusing the ad interim injunction. The appeal was otherwise also behalf of any merit. [Para 31]

Resultantly, the application under section 14 of the 1963 Act and, consequently, the appeal were to be dismissed. [Para 32]

Cases referred to

Sudama Rai v. Bisheshar Prasad AIR 1935 All. 92 (para 12), Munshi v. Punna Ram AIR 1974 Punj. & Har. 229 (para 13), Vijay Bros. v. Union of India [1990] 76 STC 375 (Punj. & Har.) (para 14), Khilloni v. Municipal Committee [1995] 1 Punj. LR 643 (para 15), Somnath Banerjee v. Vivek Salvi AIR 1988 Cal. 366 (para 16), M.P. State Co-operative Marketing Federation Ltd. v. Union of India [2001] 3 RCR (Civil) 330 (para 17), Badlu v. Shiv Charan [1980] 4 SCC 401 (para 18), Stridewell Leathers (P.) Ltd. v. Bhankerpur Simbhaoli Beverages (P.) Ltd. [1994] 79 Comp. Cas. 139 (SC) (para 21), Classic Ispat (P.) Ltd. v. Janak Steel Tubes Ltd. [1998] 93 Comp. Cas. 165 (Punj. & Har.) (para 22), Union of India v. Popular Construction Co. [2002] 37 SCL 622 (para 28) and Gopal Sardar v. Karuna Sardar [2004] 4 SCC 252 (para 29).

Amit Rawal for the Appellant. Arun Kathpalia and Rohit Khanna for the Respondent.

brett_lee38

There is a decision of Delhi Tribunal where in delay of 43 years has been condoned it is reported in 93 TTJ 155 (Del)

ashutosh majumdar

WHOA!!......LOL.....43 years!!!! Must be a world record!! Unbelievable. Thanks for sharing.

yedhulaprakash

If there are sufficient reasons for the delay, normally delay would be condoned.