In the absence of a formal application under Section 5 for condonation of delay, the Court as matter of discretion can condone delay

SESH NATH SINGH

Versus

BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK LTD AND ANR

CIVIL APPEAL NO. 9198 OF 2019, Decided in March 22, 2021.

Bench: Indira Banerjee , Hemant Gupta JJ.

Issue:

 Whether delay beyond three years in filing an application under  Section 7 of IBC can be condoned, in the absence of an application for condonation of delay made by the applicant under Section 5 of the Limitation Act, 1963?

Held

The Court held that there is no bar to exercise by the Court/Tribunal of its discretion to condone delay, in the absence of a formal application under Section 5 for condonation of delay. It was further said that Section 5 of the Limitation Act, 1963 does not speak of any application but the impugned Section enables the Court to admit an application or appeal if the applicant or the appellant, as the case may be, if it satisfies the Court that he had sufficient cause for not making the application and/or preferring the appeal, within the time prescribed. The Court said that a plain reading of Section 5 of the Limitation Act makes it amply clear that, it is not mandatory to file an application in writing before relief can be granted under the said section. Had such an application been mandatory, Section 5 of the Limitation Act would have expressly provided so. Section 5 would then have read that the Court might condone delay beyond the time prescribed by limitation for filing an application or appeal, if on consideration of the application of the appellant or the applicant, as the case may be, for condonation of delay, the Court is satisfied that the appellant/applicant had sufficient cause for not preferring the appeal or making the application within such period. Alternatively, a proviso or an Explanation would have been added to Section 5, requiring the appellant or the applicant, as the case may be, to make an application for condonation of delay. The Court further said that the Courts/forum can always insist that an application or an affidavit showing cause for the delay be filed but no applicant or appellant can claim condonation of delay under Section 5 of the Limitation Act as of right, without making an application.

Issue

Whether Section 14 of the Limitation Act, 1963 applies to applications under Section 7 of the IBC? If so, is the exclusion of time under Section 14 is available, only after the proceedings before the wrong forum terminate?

Held

The Court answering the above question in affirmative said that Section 238A of IBC makes the provisions of the Limitation Act applicable to proceedings under the IBC before the Adjudicating authority and the Appellate Authority (NCLAT) ‘as far as may be’. The IBC does not exclude the application of Section 6 or 14 or 18 or any other provision of the Limitation Act to proceedings under the IBC in the NCLT/NCLAT. All the provisions of the Limitation Act are applicable to proceedings in the NCLT/NCLAT, to the extent feasible. Therefore, in light of above, Section 14 of the Limitation Act, 1963 applies to applications under Section 7 of the IBC.