Court/Tribunal Can Condone Delay Under Section 5 Limitation Act Even In The Absence Of A Formal Application: Supreme Court

The Supreme Court held that there is no bar to exercise by the Court/Tribunal of its discretion to condone delay under Section 5 of the Limitation Act, in the absence of a formal application.

However, the Court can always insist that an application or an affidavit showing cause for the delay be filed, the bench comprising Justices Indira Banerjee and Hemant Gupta observed.

The court was considering an appeal against a judgment of NCLAT judgment in which one of the issue raised was 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? In this case, the Financial Creditor had not filed any application before the NCLT under Section 5 of the Limitation Act. Therefore, Corporate Debtor contention was that the delay in filing the application under Section 7 of the IBC, could not have been condoned. 

The court noted that Section 5 does not speak of any application and it enables the Court to admit an application or appeal if the applicant or the appellant, as the case may be, 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.

"Although, it is the general practice to make a formal application under Section 5 of the Limitation Act, 1963, in order to enable the Court or Tribunal to weigh the sufficiency of the cause for the inability of the appellant/applicant to approach the Court/Tribunal within the time prescribed by limitation, there is no bar to exercise by the Court/Tribunal of its discretion to condone delay, in the absence of a formal application... 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 bench however clarified that a Court can always insist that an application or an affidavit showing cause for the delay be filed and no applicant or appellant can claim condonation of delay under Section 5 of the Limitation Act as of right, without making an application.

Case: Sesh Nath Singh Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd [CA 9198 OF 2019]

Coram: Justices Indira Banerjee and Hemant Gupta

Counsel: Sr. Adv Siddhartha Dave, Adv Sai Deepak

Citation: LL 2021 SC 177

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