Nimisha Nihar Doctor vs Malabar Enviro Vision Private Limited

NATIONAL COMPANY LAW APPELLATE TRIBUNAL AT CHENNAI (APPELLATE JURISDICTION) Company Appeal (AT) (CH) No. 38/2023 (IA Nos. 369, 370, 371 & 372/2023) (Filed under Section 421 of the Companies Act, 2013) (Arising out of the Impugned Order dated 18/05/2022 in C.P./44/KOB/2020, passed by the Hon'ble National Company Law Tribunal, Kochi Bench, Kerala) In the matter of: Nimisha Nihar Doctor & Anr. ...Appellants V Malabar Enviro Vision Pvt. Ltd. & 6 Ors. ...Respondents Present : For Appellants : Mr Dhiren R Deve, Advocate. For Respondents 2 to 4 : Ms.Rema Smrithi and Ms. Nivedita S Menon, Advocates.

(ORAL) ORDER

(Virtual Mode) [Per; Justice Rakesh Kumar Jain (JM)]: (ORAL)

20/04/2023: Respondent Nos. 2 to 4 filed a Petition under Sections

241, 242 and 247(1) of the Companies Act, 2013 (in short 'The Act'), before

the National Company Law Tribunal, Kochi Bench, bearing

CP/44/KOB/2020, alleging Mismanagement and Oppression in the

Company 'M/s. Malabar Enviro Vision Pvt. Ltd.', in which an Interim Order

was passed on 18.05.2022.

2. Aggrieved against the Order dated 18.05.2022, the present Appellants

have filed this Comp. App. (AT) (CH) No.38/2023, under Section 421 of the

Act along with an I.A. No.370/2023 for Condonation of Delay, if any, in

Comp App (AT) (CH) No. 38/2022 Page 1 of 7 filing of the Appeal, invoking Section 14 of the Limitation Act, 1963 (for

short 'The Act of 1963').

3. Counsel for the Appellant, at the time of hearing, referred to the

Application I.A.370/2023 and submitted that though the period prescribed

for filing an Appeal under Section 421(3) of the Act is 45 days, but since the

Appellants had filed Review Application in the Impugned Order dated

18.05.2022 on 24.05.2022 which was dismissed by the NCLT on 15.07.2022

and then the Appeal was filed against the Order dated 15.07.2022 before the

NCLAT on 07.09.2022 which was withdrawn on 05.07.2023, therefore, the

period spent in pursuing the Review Application has to be excluded in terms

of Section 14 of the Act of 1963 and as such the Appeal filed on 22.02.2023,

is within the period of Limitation of 45 days as prescribed under Section

421(3) of the Act.

4. We have heard Counsel for the Applicant and perused the record.

5. The present Appeal has been filed under Section 421 of the Act.

Section 421 of the Act deals with the Appeal from the Orders of the Tribunal.

Section 421 of the Act is reproduced as hereunder:

"421. (1) Any person aggrieved by an order of the Tribunal may prefer an appeal to the Appellate Tribunal.

(2) No appeal shall lie to the Appellate Tribunal from an order made by the Tribunal with the consent of parties.

Comp App (AT) (CH) No. 38/2022 Page 2 of 7 (3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order of the Tribunal is made available to the person aggrieved and shall be in such form, and accompanied by such fees, as may be prescribed:

Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days from the date aforesaid, but within a further period not exceeding forty-five days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.

(4) On the receipt of an appeal under sub-section (1), the Appellate Tribunal shall, after giving the parties to the appeal a reasonable opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.

(5) The Appellate Tribunal shall send a copy of every order made by it to the Tribunal and the parties to appeal."

6. As per the above provision, any person who is aggrieved by the Order

of the Tribunal has a right to file Appeal before the Appellate Tribunal and

every such Appeal shall have to be filed within a period of 45 days from the

date on which the copy of the Order of the Tribunal is made available to the

person aggrieved and shall be in such form as may be prescribed. The proviso

to Section 421(3) empowers the Appellate Tribunal to entertain an Appeal

even after the expiry of the period of 45 days but the Application has to be

filed within a further period of 45 days and the delay can be condoned if it is

satisfied that the Appellant was prevented from filing the Appeal within the

Comp App (AT) (CH) No. 38/2022 Page 3 of 7 prescribed period due to a sufficient cause. However, the extended period

cannot be more than 45 days.

7. The Impugned Order was passed on 18.05.2022 which was uploaded

on the site of the NCLT on 20.05.2022. If the period of 45 days is to be

counted from 20.05.2022, then it would have expired on 04.07.2022.

Admittedly, no such Appeal was filed within the period which has been

statutorily provided in Section 421(3).

8. The case setup by the Appellant is that they had filed Review

Application in the Impugned Order on 24.05.2022 which was dismissed on

15.07.2022 and the Appeal filed against the Order of dismissal of the Review

Application before this Tribunal on 07.09.2022, was too withdrawn on

05.01.2023, therefore, the period spent before the Court which was not

having jurisdiction to review should have been excluded in terms of Section

14 of the Act of 1963.

9. In order to appreciate the contention of the Appellant, it would be

relevant to refer to Section 14 of the Act of 1963 which read as hereunder:

"14. Exclusion of time of proceeding bona fide in court without jurisdiction.--

(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good

Comp App (AT) (CH) No. 38/2022 Page 4 of 7 faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature.

Explanation.--For the purposes of this section,--

(a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;

(b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;

(c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction."

Comp App (AT) (CH) No. 38/2022 Page 5 of 7 10. A bare perusal of the aforesaid provision would show that it is

incumbent upon the party, availing the benefit of Section 14 of the Act of

1963, is to show that the other proceedings have been initiated with "due

diligence" and the proceedings were conducted in "good faith" in the Court

who either had no jurisdiction or because of some other like nature was

unable to entertain the same.

11. The Legislature has purposefully used the word "due diligence" and

"good faith" in Section 14(1) of the Act of 1963 to extend benefit of this

provision. The question thus would be as to whether the Appellant has acted

with "due diligence" and in "good faith" in filing the Review Application in

the Order passed by the Tribunal on 18.05.2022 specially when there is no

provision of Review in the Act?

12. The Appellant has mentioned in the grounds of Appeal that the

Review Application was filed due to ill-advice which does not mean that

"due diligence" was exercised by the Appellant at the time of filing of the

Review Application specially when there is no provision of review as it is

well settled that the review is a creation of statute and cannot be filed as a

matter of right.

13. Thus, in our considered opinion, the benefit of Section 14 of the Act

of 1963 cannot be extended to the Appellant because if it is granted then

there would be no end to this kind of litigation in which the litigants would

file Review Application before the Court knowing fully well that there is no

Comp App (AT) (CH) No. 38/2022 Page 6 of 7 provision for review and after dismissal or withdrawal of the Application for

Review because of absence of any provision may file the Appeal before the

Appellate Court after a long delay.

14. Even otherwise, the Appellant has not referred to any other provision

available in the Code on the basis of which an Application for review could

have been filed. Therefore, the entire case of the Appellant is based upon

lame excuses which cannot be given legal protection for the purpose of

approaching this Court after a huge delay of 8 months.

15. Thus, in view of the aforesaid discussion, we do not find any substance

in the Application and it is hereby held that the Appellant is not entitled to

the benefit of Section 14 of the Act of 1963 and as such, the Appeal suffers

from delay and latches and in view thereof the Application is hereby

dismissed and as a consequence thereof, the Appeal is also not found to be

duly constituted and the same is hereby dismissed as well though without

any order as to cost.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Shreesha Merla] Member (Technical)

himanshu/md

Comp App (AT) (CH) No. 38/2022 Page 7 of 7