Statutory limitation for filing appeals under Section 421 is peremptory and cannot be condoned beyond ninety days.

The Regional Director (RD), Northern Region, filed an application under Section 233(5) of the Companies Act, 2013, seeking to challenge a Fast Track Merger scheme between Gentle Realtors Pvt. Ltd. and M3M India Pvt. Ltd

The Respondent companies submitted electronic and physical copies of the scheme to the RD on June 29 and 30, 2023, respectively

The RD filed the application before the NCLT on August 9, 2024

The NCLT dismissed the application on September 11, 2024, holding that the RD failed to form an opinion regarding the scheme’s impact on public interest or creditors and that the prayers were beyond the scope of Section 233(5)

The RD subsequently appealed to the NCLAT with a delay of 196 days

1. Whether the RD’s application under Section 233(5) was filed within the prescribed limitation period and met the statutory prerequisites of forming an opinion

2. Whether the NCLAT has the jurisdiction to condone a delay of 196 days in filing an appeal under Section 421 of the Companies Act, 2013

Section 233(5) of the Companies Act, 2013, which mandates that the Central Government must form an opinion that a scheme is against public interest or creditors and file objections within 60 days of receiving the scheme

Section 421(3) of the Companies Act, which stipulates a 45-day period for filing appeals, extendable by a maximum of 45 additional days upon showing sufficient cause

Supreme Court’s ruling in Bengal Chemists & Druggists Association v. Kalyan Chowdhury, which established that the 45+45 day timeline is peremptory and cannot be extended via the Limitation Act

Asset Auto India Pvt. Ltd. v. Union of India (Bombay HC) regarding the mandatory formation of an opinion by the RD before filing objections

Regarding the underlying application, the Tribunal observed that while the Respondents provided the scheme in June 2023, the RD did not file objections until August 2024, which is significantly beyond the 60-day limit prescribed under Section 233(5)

The RD also failed to demonstrate that it had formed a prior opinion that the scheme was prejudicial to public or creditor interests

On the issue of the appeal itself, the RD filed the challenge 196 days after the impugned order.

The Appellant argued for the exclusion of time taken to obtain government sanctions under Section 15(2) of the Limitation Act. However, the NCLAT rejected this, reasoning that Section 421 of the Companies Act is a special provision that renders the second 45-day limit "otiose" if further delays are condoned

The Tribunal emphasized that strict compliance with the statutory timeline is required to maintain the effectiveness of the law

Regarding the appeal, the Tribunal held that it lacked the jurisdiction to condone a delay of 196 days, as the maximum permissible period under Section 421 is 90 days (45+45)

Consequently, the application for condonation of delay was rejected, and the appeal was dismissed as barred by limitation