COVID-19 | EXTENSION OF LIMITATION PERIOD
On account of Covid -19 lock down throughout India, the Supreme Court of India has recently passed an Order, (Supreme Court Order) exercising its powers under Article 142 read with Article 141 of the Constitution of India extending the limitation period for fixing or stipulating a time frame for initiation of a legal action by the parties at dispute, whether condonable or not, with effect from 15 March 2020 till further order of the court.
Objective of Limitation: Section 2 (j) of the Limitation Act, 1963 (Act), defines `period of limitation` as period of limitation prescribed for any suit, appeal or application by the schedule, and ``prescribed period`` means the period of limitation computed in accordance with the provisions of this Act which covers a range of claims and their timelines. Thus every suit, appeal or application that needs to be filed, has to adhere to Section 3 of the Act subject to the exceptions provided therein. It is pertinent to note that any suit, appeal or application preferred post expiry of limitation period cannot be filed at all as they delay would be out of the scope to be condoned.
Impact of the Supreme Court Order: Considering the difficulties that the litigants can face in filing their suit, appeal or application in wake of Covid-19 and the threat possessed by it, the Supreme Court, being very well aware of the consequences of community transmission of the virus came to the rescue of the litigants by suspending the limitation period from 15 March 2020 till further orders. The question that arose was under what provisions can the suspension of the limitation period be considered. To answer this, a perusal of section 4 of the Act is required, which deals with the extension of limitation period if the limitation period expires during the time when the court is closed viz. on holiday. A perusal of the Supreme Court Order makes it abundantly clear that the courts shall, considering the country is in lockdown, be deemed to be closed and thus any limitation period expiring during the said tenure shall be extended till a further period which is yet to be notified by the apex court. As such, the litigants have been given a breather for the time being without them getting worried about their limitation period, which clearly was the need of the hour.
Impact of the Supreme Court Order for the other Tribunals: As the Supreme Court Order clearly specifies that the said extension shall be applicable to the general as well as special laws, the said extension of limitation shall also be available to the litigants under the Insolvency and Bankruptcy code 2016 (Bankruptcy Code). Both, National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) have issued separate notifications that the period of limitation for filing appeal before the NCLAT shall stand extended in terms of the Supreme Court Order. Therefore, all cases and the timelines prescribed under the Bankruptcy Code will stand extended. This said, the same shall also be available to various other tribunals. In a latest development the NCLAT vide its Order, dated 30 March 2020 clarified that the period of lockdown as issued by the central government as well as the respective state governments shall stand excluded from the calculation of corporate insolvency resolution process under section 12 of Bankruptcy Code.
Impact of the Arbitration Matters: As already stated above, the Supreme Court Order covers all general and special laws thus, all the time-lines prescribed under the Arbitration and Conciliation Act, 1996 (Arbitration Act), for example, the timeline to file a challenge under section 34 of the Arbitration Act or an appeal arising thereunder will stand extended as per the Supreme Court Order. However, it would be interesting to see whether the proceedings conducted by the arbitral tribunal, which are usually recorded in procedural orders, will be covered under the ambit of the Supreme Court Order.
Impact on other Commercial Cases: Commercial suits like recovery of monies, intellectual property matters etc. are required to be filed within a fixed span of time from the day the cause of action arises (more particularly mentioned in Commercial Courts Act, 2015). As per the Supreme Court Order the said period of limitation as stated in the Act shall stand extended, which otherwise is not available under the statute.
Objective of Limitation: Section 2 (j) of the Limitation Act, 1963 (Act), defines `period of limitation` as period of limitation prescribed for any suit, appeal or application by the schedule, and ``prescribed period`` means the period of limitation computed in accordance with the provisions of this Act which covers a range of claims and their timelines. Thus every suit, appeal or application that needs to be filed, has to adhere to Section 3 of the Act subject to the exceptions provided therein. It is pertinent to note that any suit, appeal or application preferred post expiry of limitation period cannot be filed at all as they delay would be out of the scope to be condoned.
Impact of the Supreme Court Order: Considering the difficulties that the litigants can face in filing their suit, appeal or application in wake of Covid-19 and the threat possessed by it, the Supreme Court, being very well aware of the consequences of community transmission of the virus came to the rescue of the litigants by suspending the limitation period from 15 March 2020 till further orders. The question that arose was under what provisions can the suspension of the limitation period be considered. To answer this, a perusal of section 4 of the Act is required, which deals with the extension of limitation period if the limitation period expires during the time when the court is closed viz. on holiday. A perusal of the Supreme Court Order makes it abundantly clear that the courts shall, considering the country is in lockdown, be deemed to be closed and thus any limitation period expiring during the said tenure shall be extended till a further period which is yet to be notified by the apex court. As such, the litigants have been given a breather for the time being without them getting worried about their limitation period, which clearly was the need of the hour.
Impact of the Supreme Court Order for the other Tribunals: As the Supreme Court Order clearly specifies that the said extension shall be applicable to the general as well as special laws, the said extension of limitation shall also be available to the litigants under the Insolvency and Bankruptcy code 2016 (Bankruptcy Code). Both, National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) have issued separate notifications that the period of limitation for filing appeal before the NCLAT shall stand extended in terms of the Supreme Court Order. Therefore, all cases and the timelines prescribed under the Bankruptcy Code will stand extended. This said, the same shall also be available to various other tribunals. In a latest development the NCLAT vide its Order, dated 30 March 2020 clarified that the period of lockdown as issued by the central government as well as the respective state governments shall stand excluded from the calculation of corporate insolvency resolution process under section 12 of Bankruptcy Code.
Impact of the Arbitration Matters: As already stated above, the Supreme Court Order covers all general and special laws thus, all the time-lines prescribed under the Arbitration and Conciliation Act, 1996 (Arbitration Act), for example, the timeline to file a challenge under section 34 of the Arbitration Act or an appeal arising thereunder will stand extended as per the Supreme Court Order. However, it would be interesting to see whether the proceedings conducted by the arbitral tribunal, which are usually recorded in procedural orders, will be covered under the ambit of the Supreme Court Order.
Impact on other Commercial Cases: Commercial suits like recovery of monies, intellectual property matters etc. are required to be filed within a fixed span of time from the day the cause of action arises (more particularly mentioned in Commercial Courts Act, 2015). As per the Supreme Court Order the said period of limitation as stated in the Act shall stand extended, which otherwise is not available under the statute.
MHCO Comment: The Hon'ble Supreme Court has made a positive attempt to defer unnecessary fear amongst litigants in terms of expiry of the limitation period in pursuing legal remedies. The Apex Court in affect has negated the effect of all other laws which prescribe limitations for initiating legal proceedings before various courts and tribunals.
The views expressed in this update are personal
and should not be construed as any legal advice. Please contact us directly on
+91 22 40565252 or legalupdates@mhcolaw.comfor any assistance.
No comments:
Post a Comment