Dismissed

Sh. Jagdish Lal Gupta v. Tara Industrires Limited and Ors.

Bombay HC11 Mar 2014COAPP/26/2014

Case brief

AI extract

What is this about?

The High Court dismissed a company application seeking condonation of delay in filing an appeal under Section 10F of the Companies Act, 1956. The Court held the appeal was time-barred as the applicant knew of the order in April 2012, exceeding the 120-day limit. The Court also interpreted CLB Regulations to exclude non-parties from automatic notice, distinguishing the case where the applicant was

What did the court decide?

Company Application dismissed; Company Appeal (L) No. 51 of 2012 and Company Applications No. 38 and 39 of 2013 dismissed with no order as to costs.

Sh. Jagdish Lal Gupta Vs Tara Industrires Limited and… — Company and Corporate | Bombay HC (2014)

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CAL32-13-F.DOC

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Agk

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION

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COMPANY APPLICATION (L) NO. 32 OF 2013

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WITH

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COMPANY APPEAL (L) NO. 51 OF 2012
AND

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COMPANY APPLICATION NO.38 OF 2013

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AND

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COMPANY APPLICATION NO.39 OF 2013

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Jagdish Lal Gupta,

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65/19, New Rohtak Road, Karol Bagh, New
Delhi – 110 005

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…Applicant

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Versus

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1. Tara Industries Limited , having registered office at 46, World Trade Centre, Cuffe Parade, Mumbai – 400 005

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2. Prem Kumar Gupta , S/o. Late Shri Tara Chand, 652, Pakhowal Road, Opposite Nehru Sidhant Kender, Ludhiana – 141 001

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3. Smt. Sunila Gupta , W/o. Shri Prem Kumar Gupta 652, Pakhowal Road, Opposite Nehru Sidhant Kender, Ludhiana – 141 001

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4. Shri Amit Gupta , S/o. Shri Prem Kumar Gupta 652, Pakhowal Road, Opposite Nehru Sidhant Kender, Ludhiana – 141 001

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5.Shri Aman Gupta,
W/o. Shri Prem Kumar Gupta
652, Pakhowal Road, Opposite Nehru
Sidhant Kender, Ludhiana – 141 001
6.Shri Nand Lal Gupta, S/o. Late Tara
Chand, 31 Jolly Maker Apartment No.2
Cuffe Parade, Mumbai – 400 005
AND also at
P.O. Box 15487, Dubai, U.A.E.
7.Shri Sanjay Gupta, S/o. Late Tara
Chand, 31 Jolly Maker Apartment No.2
Cuffe Parade, Mumbai – 400 005
AND also at
P.O. Box 15487, Dubai, U.A.E.
8.Smt. Jyoti Jain, W/o. Shri Sandeep
Jain, 2782, Gurdev Nagar, Near
Imperial Hotel, Ludhiana, 141 001
9.Ms. Usha Jaykar, D/o. Late Shri
Balaram Jaykar, 1 Carter Road, Borivali
(East), Mumbai – 400 066...Respondents.

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APPEARANCES

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FORTHEAPPLICANT
Mr. Z.T. Andhyarujina, with Mr. Kunal
Dwarkadas, Ms. Vaidehi Naik, Ms.
Shruti Sardesai, i/b Phoenix Legal.
FORRESPONDENTSNO.
Ms. Sunila Chavan, i/b Mr. Satyan Irani.
1 TO 5
FORRESPONDENTNO.7Mr. R.I. Chagla, with Mr. Hemand Telkar,
i/by M/s. Haresh Mehta & Co.

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CORAM:G.S.Patel, J.

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JUDGEMENT RESERVED ON:28th January 2014
JUDGEMENT PRONOUNCED ON:11th March 2014

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JUDGMENT : (Per G.S. Patel, J.)

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1.This is a company application filed by the appellant in an
appeal under Section 10F of the Companies Act, 1956. The appeal is
directed against an order dated 24th January 2012 passed by the
Company Law Board, Principal Bench, New Delhi. The company
application seeks that the delay in filing the appeal be condoned.

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2.The question is not whether a court can condone delay
beyond the maximum period of 120 days specified in Section 10F –
that a court cannot is now well-settled – but from what date should
that period be reckoned. Mr. Andhyarujina, learned counsel for the
appellant, Jagdish Lal Gupta (“Jagdish Gupta”), claims that his
client had a right to receive a copy of the impugned order under
Regulation 29(4) of the Company Law Board Regulations, 1991
(“CLB Regulations”). He was not given a copy. He chanced upon
it much later, in August 2012, and since this appeal was filed on
22nd November 2012, it is within the extended period of 60 days
(beyond the initial period of 60 days). It is, he argues, therefore
permissible for the Court to exercise discretion in Jagdish Gupta’s
favour, the more so since this is an appeal, a substantive right. Mr.
R.I. Chagla, learned counsel for the contesting 7th respondent,
Sanjay Gupta (“Sanjay Gupta”), disputes this with a degree of
vehemence that borders on the disconcerting. It was not only in
August 2012 that Jagdish Gupta learned of the impugned order, says
Mr. Chagla. He knew of it in several months earlier, no later than
April 2012, and very likely in January 2012: the appeal is, therefore,
hopelessly out of time.

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3.Given the facts, I propose to dismiss this Company
Application. I have found that it is beyond doubt that Jagdish Gupta

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knew of the impugned order at least in April 2012, perhaps earlier.
The argument that his appeal should be treated as a cross-appeal or
cross-objections to the appeal already filed by Sanjay Gupta is not
one that I can accept in view of the specific and unambiguous
wording of Section 10F of the Companies Act, 1956.

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4.Before the Company Law Board, Sanjay Gupta (the 7th
respondent) filed Company Application No. 35 of 2011 for
modification of an earlier order dated 23rd November 2011 The
previous order of 23rd November 2011 rejected impleadment
applications made by, among others, Jagdish Gupta. The
modification sought by Sanjay Gupta, a contesting party, was on the
basis that while dismissing the impleadment application(s), the
Company Law Board travelled beyond the scope of those
applications. Jagdish Gupta was not a party to the modification
application. It was this application, by Sanjay Gupta, for
modification that the Company Law Board dismissed on 24th
January 2012, and this is the order that Jagdish Gupta now seeks to
challenge in this appeal.

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5.According to Mr. Andhyarujina, the delay is of 55 days
beyond the initial period of 60 days prescribed in Section 10F. Mr.
Chagla says that the delay is not merely 55 days, but is 213 days. It is
well beyond the period of 120 days, the outer limit stipulated in
Section 10F.

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6.Shortly stated, Mr. Andhyarujina’s submission is that the
delay must be computed under Regulation 29(4) of the Company
Law Board Regulations, 1991, i.e. from the date when the order was
communicated to Jagdish Gupta, the appellant. The impugned

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order was not passed on his application. The order is, Mr.
Andhyarujina says, one that was passed without hearing Jagdish
Gupta, though it has “important relevance to [Jagdish Gupta’s]
rights”. Jagdish Gupta learned of this order when he noticed on the
website of the Bombay High Court some particulars about a
company appeal filed by another contestant or contestants before
the Company Law Board. In paragraph 11 of the affidavit in support
of the present company application, Jagdish Gupta makes several
submissions in support of this application for condoning delay. This
one paragraph sets out the appellant’s case in its entirety and is,
therefore, reproduced below.

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“11. (i) It is submitted that the present Appeal is not barred by limitation as the proceedings of Company Application No.35 of 2012 were conducted behind the back of the Appellant and the Order dated 24th January 2012 was passed without hearing and without notice to the Appellant. (ii) Without prejudice to the said contention, the delay in filing the present Appeal may be condoned as the present Appeal is being filed within 120 days of the information and details about Company Application 35/2012 being obtained. It is submitted that computed from 15th August 2012, the present Appeal is being filed after 60 days of the said date but within 120 days i.e. Approx. 100 days from the date of knowledge i.e. delay of 40 days after the first 60 days. (iii) In the alternative, It is submitted that computed from 1st August 2012, the present Appeal is being filed after 60 days of the said date but within 120 days i.e. Approx. 115 days from the date of knowledge i.e. delay of 55 days after the first 60 days (iv) Further, without prejudice to the said contentions it is submitted that the present Appeal may be treated as Cross Objections – Cross Appeal vis-à-vis Company Appeal (Lod.) No.15 and 17 of 2012. (v) Further, without prejudice, it is submitted that if required, the present Appeal may also be treated as a petition under Article 227 of the Constitution of India due to the peculiar

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circumstances of the matter. (vi) Lastly, it is submitted that the Appellant has already stated his stand in the Company Applications filed in Company Appeal (Lod.) No.15 and 17 of 2012 and the same may also be treated as Appeal, Cross Appeal, Cross Objection in the matter along with the present Appeal. The said Applications were filed on 11th October 2012 i.e. within 60 days of the information being available to the Applicant.”

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7.These statements are seriously controverted by Mr. Chagla.
He points to the affidavit in reply filed by Sanjay Gupta, who says
that Jagdish Gupta filed a Special Leave Petition No.8513-8514 of
2012 in the Supreme Court against the Company Law Board’s order
dated 23rd November 2011. In that Special Leave Petition, the
appellant filed an Interim Application for leave to file additional
documents. Annexure P-45 to that application was a copy of the
Company Application no.35 of 2012 filed by Sanjay Gupta before
the Company Law Board for modification of the 23rd November
2011 order. Annexure P-46 was a copy of the very order dated 24th
January 2012 against which this appeal is filed. The copy annexed to
Jagdish Gupta’s I.A. before the Supreme Court was a certified true
copy. That I.A. was filed on 23rd April 2012. Therefore, submits
Mr. Chagla, Jagdish Gupta had knowledge of the order under appeal
since at least 23rd April 2012. In actuality, according to him, Jagdish
Gupta’s knowledge of the impugned order dates back to 27th
January 2012, the date on which the impugned order was certified as
a true copy by the Bench Officer, this being the document produced
by Jagdish Gupta himself before the Supreme Court. The present
appeal is, however, lodged only on 22nd November 2012. Computed
from either date, i.e., 27th January 2012 or 23rd April 2012, the
appeal is completely out of time. There is, Mr. Chagla submits, also
no valid explanation in the affidavit for the delay. Even assuming

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that the delay can be condoned – in his submission it cannot –
absent any tenable explanation, no case has been made out such
condonation.

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8.Mr. Chagla also point out that the Company Law Board had
rejected applications for impleadment including by Jagdish Gupta.
These impleadment applications were heard on several dates in May
2011. Jagdish Gupta was among those who made submissions. Final
arguments concluded on 23rd November 2011. On that day, Jagdish
Gupta filed further company applications. The Company Law
Board, by its order of 23rd November 2011, declined to issue notice
on these Company Applications and also declined to allow the
applications for impleadment.

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9.I am not, at this stage, considering the merits of the appeal.
That can only be done if Mr. Andhyarujina succeeds and the delay
– and it is admitted that there is a delay – is condoned. For, if it is
not then the appeal itself cannot be filed or heard.

¶50

10.Mr. Andhyarujina’s first submission is based on his reading of
Regulation 29(4) of the CLB Regulations, extracted below:

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“29. Order of the Bench -

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(1) Every order of the Bench shall be in writing, and shall be signed by the member or members constituting the Bench which pronounces the order.

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(2) * * *

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(3) * * *

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(4) A copy of every interim order granting or refusing or modifying interim relief and final order passed on any petition or reference shall be communicated to

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the petitioner or the applicant and to the respondents and other parties concerned free of cost :

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Provided that in the case of an order under section 17 confirming change of registered office, two copies of the order shall be supplied to the petitioner company free of cost.

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(7) * * *”

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11.Mr. Andhyarujina submits that the appellant, Jagdish Gupta,
is “any other person concerned”. It must be noted however that the
appeal is not directed against the order of 23rd November 2011, but
against the order dated 24th January 2012. That was passed in
company applications to which Jagdish Gupta was not a party. The
impugned order was passed on Sanjay Gupta’s Company
Application No.35 of 2012 for modification of the order of 23rd
November 2011. Mr. Andhyarujina’s submission is that since he was
a party before the Company Law Board for the 23rd November 2011
order, and since the impugned order of 24th January 2012 was on an
application for modification of the earlier order, therefore he was “a
person concerned”, and a copy should have been made available to
him.

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12.I must disagree. The words “other parties concerned” must
receive a somewhat more restricted meaning than Mr. Andhyarujina
suggests. It is a reference to persons who are in some capacity before
the Company Law Board in that particular matter in which the order
is passed. Moreover, the purpose of sub-rule (4) is to ensure that

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copies are made available free of cost to these parties. This is evident
from the provisions of sub-regulations 2, 3 and 4 of Regulation 30 of
the CLB Regulations:

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“30. Inspection of records and supply of certified copies -

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---(1)

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(2) Subject to the provisions of sub-regulation (4) of Regulation 29, a person who is not a party to the proceedings, may after the final orders are passed, for sufficient reasons shown to the satisfaction of the Bench, obtain copies of the petitions, replies and counter-replies on payment of such fee, as may be fixed by the Bench by general or special order.

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(3) A person, who is not a party to the proceedings, may also obtain, as of right, at any time after the final orders are passed by the Bench, copies of the orders, on payment of such fee, as may be fixed by the Bench by general or special order.

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(4) A person, who is not a party to the proceedings, has, however, no right to inspect the records of the proceedings or to obtain copies of the Exhibits put in evidence, except with the consent of the person by whom they were produced or under the orders of the Bench”.

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Thus, any other party is also entitled to order copies but must apply
for these and pay the necessary fees. He or she may also be required
to give reasons why these order copies are sought.

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13.As Jagdish Gupta was not a party to Sanjay Gupta’s Company
Application No.35 of 2012, he is not a person concerned within the
meaning of Regulation 29(4). Mr. Andhyarujina’s formulation

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seems to me to be utterly impracticable. It would require the
Company Law Board or its registry to embark on an argosy in quest
of every single person with some connection, however remote, to
the matter at hand and provide him with free copies. This cannot
have been the intention of Regulation 29(4). Jagdish Gupta was not
concerned with Company Application No. 35 of 2012 at all. There
was no attempt to vary, modify or recall the previous order declining
his application for impleadment. It was an application by Sanjay
Gupta to obtain certain clarifications on the basis that the Company
Law Board had, while disposing of Jagdish Gupta’s impleadment
application, made observations that were beyond the scope of those
impleadment actions.

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14.The factual basis for the present Company Application for
condonation of delay is in paragraph 8 of its affidavit in support.
That paragraph says:

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“8. The Applicant learnt about the aforesaid proceedings in CA 35/2012 in the first week of August 2012 when the Company Appeal Lodging No. 15 and 17 of 2012 filed by Sanjay Gupta group were noticed on the website of the Bombay High Court. The Applicant was able to obtain more information including the contents of the Application No.35 of 2012 by 15th August 2012.”

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15.Jagdish Gupta thus pins himself down to two dates in August
2012. The first of these is 1st August 2012, the date on which he
says he first came to know from the Bombay High Court’s website
that Sanjay Gupta (among others) had filed an appeal. The second
date is 15th August 2012, when, according to Jagdish Gupta, he
obtained further information about Sanjay Gupta’s appeal.

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16.Neither of these dates can possibly be correct. Jagdish Gupta
does not explain how from the lodging or registration number of an
appeal filed in this Court, he was able to discern the details of the
order impugned or the application before the Company Law Board
on which that order was passed. These details are not readily
available on the High Court website’s case status system. All that it
could have told him was that Sanjay Gupta had filed some appeal.
The information would show the lodging or registration numbers,
the name of the first appellant and the name of the first respondent,
but little else. It would not have been possible for Jagdish Gupta to
have known of the order challenged in Sanjay Gupta’s appeal, or to
have, from the website, gleaned any information about the
application on which the order under challenge by Sanjay Gupta was
passed. Secondly, I am unable to understand how the appellant
could possibly have obtained any further detailed information on
15th August 2012, a national holiday. All registries were closed on
that day. Neither of these dates is, therefore, credible as a starting
point of limitation. Neither of Jagdish Gupta’s assertions can be
believed.

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17.Jagdish Gupta also glosses over the fact that several months
earlier, in April 2012, he clearly knew about the impugned order. He
had a certified copy. He annexed it to his interim application in a
Special Leave Petition before the Supreme Court. This discrepancy
is not sufficiently explained.

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18.In the affidavit in support of the Company Application, a
submission is also made that this appeal be treated as a petition
under Article 227 of the Constitution of India due to “the peculiar
circumstances of the matter”. That cannot be done. There are no

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peculiar circumstances; certainly, none in favour of the appellant.
The peculiar circumstances, such as they are, are against the
appellant.

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19.Mr. Andhyarujina also submits that the present appeal may be
treated as a cross-objection in the appeal filed by the 7th respondent
and others. He relies on a decision of the Supreme Court in
Superintending Engineer and others V/s. B. Subba Reddy1 to submit that
since an appeal is a substantive right and a cross-objection is like an
appeal, he is therefore entitled, ex debito justitiae, to an enlargement
of time, or, alternatively to have his appeal treated as a cross-appeal
or cross-objections. The decision in B. Subba Reddy arose in the
context of the 1940 Arbitration Act. The observations made in
paragraph 53 of that decision are in relation to the provisions of that
Act and Order 41 Rule 22 of the Code of Civil Procedure, 1908. The
words of limitation that we find in Section 10F are not to be found in
Order 41. To very similar effect are the decisions in Bhagat Ram V/s.
Raghbar Dial and others,2 and in Sm. Nripjit Kaur V/s. Sardar
Satinder Singh.3

¶88

20.Mr. Andhyarujina also relies on a decision of a learned Single
Judge of the Andhra Pradesh High Court in Dewan Bahadur
Ramgopal Mills Limited V/s. Appellate Authority for Industrial &
Financial Reconstruction and others.4 This decision says that an
appeal under Section 5 of the Sick Industrial Companies (Special
Provisions) Act, 1985 must be filed within forty-five days from the
date the certified copy of the order of the BIFR is issued. The
1(1999) 4 SCC 423

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2 1925 Lahore 57

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3 AIR 1955 Punjab 190

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4 (1999) 98 Company Cases 398; per Bilal Nazki, J. (as he then was)

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appellants’ knowledge is irrelevant if the appeal is maintainable,
provided it is filed within forty-five days of the issuance of the order
copy. That decision is clearly distinguishable. In that case, the
appeal was filed within forty-five days of the date of issuance of the
copy. In the present case, there is an admitted delay beyond the first
period of sixty days. The appellant also reckons the starting point of
limitation from the date of knowledge. These are the precise words
used in paragraph 11 of the affidavit in support of the company
application. The question, in the present case, is not whether the
limitation would start running from the date of issuance of a copy
but even on the appellant’s own showing, what should be taken as
the date of his knowledge. Would it be the date when the appellant,
Jagdish Gupta, claimed to have first learned, from the Bombay High
Court website, of the appeal filed by the 7th respondent, Sanjay
Gupta? Or should it be the public holiday (Independence Day) when
he claims to have obtained further information? Or must it be, as
Mr. Chagla says, from the date when he annexed a certified copy of
the impugned order to his affidavit in the Supreme Court, or
perhaps the date of issuance of that certified copy?

¶95

21.In my view, it can only be the dates suggested by Mr. Chagla.
There is no manner of doubt that in April 2012 the appellant had
with him a certified copy of the impugned order. He said as much.
He annexed it in proceedings that he himself filed in the Supreme
Court. Reckoned from either of the dates that Mr. Chagla mentions
(i.e. 27th January 2012 or 23rd April 2012) the appeal is well beyond
the maximum period of 120 days within which it could be filed.

¶96

22.The question of whether this period can be extended under
Section 10F has now been settled by a decision of a learned Single

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Judge of this court in Smt. Hetal Alpesh Muchhala V/s. Adityesh
Educational Institute (P) Limited and others.5 The very question arose
before that Court. Kathawala, J. in terms held that the right of
appeal under Section 10F is restricted. It must relate only to
questions of law. To ensure that there is a quick finality to the
disputes, all decisions on facts by the Company Law Board are final
and conclusive. It is not, therefore, possible to afford a liberal
construction to the discretion vested under the proviso to Section
10F. To do so would be to render it meaningless and contrary to the
plain intent of the statute. The Court’s power in condonation of
delay beyond sixty days itself is prescribed in mandatory language:

¶100

“Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding 60 days.”

¶101

23.The learned Single Judge held that on a correct reading of the
Supreme Court decision in Union of India V/s. Popular Construction
Company,6 it is clear beyond all doubt that the legislative intent
underlying the constitution and establishment of the Company Law
Board and insertion of section 10F is to limit the time within which
an appeal can be filed. This time limit is absolute. It cannot be
extended by a Court under section 5 of the Limitation Act.

¶102

24.That decision binds me. It is not possible to distinguish it. To
substantially the same effect is the decision of a learned single Judge
of the Madras High Court in Sivakumar Spinning Mills Pvt.Ltd. v

¶103

5 (2009) 4 Comp LJ 577 (Bom.)

¶104

6 (2002) 1 Comp LJ 46 (SC)

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Shanmughavelayutham And Ors.7 There, too, Popular Construction
was cited and relied on.

¶108

25.The appellant not only had knowledge of the impugned order
in April 2012, but had a certified copy of it. The delay is beyond the
maximum period of 120 days prescribed in Section 10F. There is
absolutely no explanation for the delay. The company application is
dismissed. There will be no order as to costs.

¶109

26.In view of dismissal of the Company Application, Company
Appeal (L) No.51 of 2012 does not survive and is also dismissed.
Similarly, Company Application No. 38 of 2012 and Company
Application No. 39 of 2012, both filed by the present appellant for
stay of the proceedings in Company Petition No.79 of 2006 and
Company Petition No.84 of 2007 also do not survive, and are
accordingly dismissed.

¶110

(G.S. Patel, J.)

¶111

7 2009 (6) CTC 847 : MANU/TN/3760/2009

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Sh. Jagdish Lal Gupta v. Tara Industrires Limited and Ors.

Case brief

What is this about?

What did the court decide?

Sh. Jagdish Lal Gupta v. Tara Industrires Limited and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

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