Arghya Industries Ltd. decided to file an appeal before Hon'ble NCLAT due to an Order that has been passed by Hon'ble NCLT on May 6, 2019 without consent of the parties. The Order was received by the Company on May 7, 20
CS Professional · Resolution of Corporate Disputes, Non-Compliances & Remedies · PYQS · December 2021
Arghya Industries Ltd. decided to file an appeal before Hon'ble NCLAT due to an Order that has been passed by Hon'ble NCLT on May 6, 2019 without consent of the parties. The Order was received by the Company on May 7, 2019. The employees of the Company went on a strike for a period of 10 days from June 25, 2019 demanding salary hike and other benefits. The operations of the Company came to a grinding halt due to the strike and other extraneous reasons. Thereafter, the Company proposed to file an appeal on July 9, 2019 before the Hon'ble NCLAT and the Company prayed for condonation of delay. The Management of the Company was planning to seek professional help on the following queries : (i) Whether the proposed appeal would be admitted by the NCLAT. (ii) What is the maximum period allowed by the NCLAT for condonation of delay ? As a Practising Company Secretary, advise the Management of the Company.
Answer & Explanation:
According to section 421 of the Companies Act, 2013 (the Act) any person aggrieved by an order of the National Company Law Tribunal (NCLT) may prefer an appeal to the National Company Law Appellate Tribunal (NCLAT). However, no appeal shall lie to NCLAT from an order made by the NCLT with the consent of parties. Every appeal section 421 of the Act shall be filed within a period of forty-five days from the date on which a copy of the order of the NCLT is made available to the person aggrieved and shall be in such form, and accompanied by such fees, as may be prescribed. Further, NCLAT 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. (i) Whether the proposed appeal would be admitted by the NCLAT. In the given case, the order was passed by NCLT on May 6, 2019 but was received by the company on May 7, 2019. Accordingly, the appeal should have been filed before NCLAT within 45 days from May 7, 2019 i.e., by June 21, 2019. The Company could not file the appeal with the time provided in section 421 of the Act and prayed for condonation of delay. Now, in the given case, the company propose to file the appeal on July 9, 2019. Though the appeal could have been admitted on the grounds that the Order of NCLT was passed without the consent of the parties but the appeal was not tendered within the prescribed time. Further, the NCLAT may not condone the delay in view of the fact that the strike in the company started on June 25, 2019 i.e., 4 days after the expiry of the 45 days from the date of receiving the NCLT Order. Thus, it may be said that the appellant was not prevented by any sufficient cause from filing the appeal within the prescribed time. Hence, the proposed appeal may not be admitted by NCLAT. (ii) What is the maximum period allowed by the NCLAT for condonation of delay? The maximum period allowed for condonation of delay is 45 days if NCLAT is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.
Topics: Appeals and Remedies
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