Power of the NCLT to Condonе Delay under Section 433 of the Companies Act, 2013: Supreme Court Clarification

Table of Contents

Introduction

The Supreme Court, in The Property Company (P) Ltd. v. Rohinten Daddy Mazda (2026 INSC 33), has conclusively clarified an important procedural issue under company law: whether and from when the National Company Law Tribunal (NCLT) possesses the power to condone delay by applying the Limitation Act, 1963.

The judgment draws a sharp and legally significant distinction between the Company Law Board (CLB) and the NCLT/NCLAT, holding that the power to condone delay flows only from an express statutory mandate, namely Section 433 of the Companies Act, 2013.

Statutory Framework

Section 58(3), Companies Act, 2013

Section 58(3) prescribes the limitation period for filing an appeal against refusal of transfer or transmission of shares. The provision does not expressly provide for condonation of delay.

Section 433, Companies Act, 2013

Section 433 states:

“The provisions of the Limitation Act, 1963 shall, as far as may be, apply to proceedings or appeals before the Tribunal or the Appellate Tribunal.”

This provision came into force on 1 June 2016, simultaneously with the establishment of the NCLT and NCLAT.

Key Issue before the Supreme Court

Whether the power to condone delay under Section 5 of the Limitation Act, 1963 could be exercised:

By the CLB prior to 01.06.2016, or
By the NCLT/NCLAT after Section 433 came into force.

Supreme Court’s Legal Reasoning

1. Limitation Act applies only to courts unless expressly extended

The Court reaffirmed a settled constitutional principle:

The Limitation Act, 1963 applies only to courts and not to tribunals or quasi-judicial bodies, unless the statute expressly provides otherwise.

Relying on precedents such as Town Municipal Council v. Labour Court, Parson Tools, and M.P. Steel Corporation, the Court held that tribunals do not possess inherent powers of condonation.

2. CLB had no power to condone delay

During the transitional phase (12.09.2013 to 01.06.2016):

Appeals under Section 58 were filed before the CLB
The CLB derived its powers from the Companies Act, 1956
There was no provision equivalent to Section 433

The Court categorically held that:

The CLB lacked jurisdiction to apply Section 5 of the Limitation Act or to condone delay, even on equitable grounds.

Procedural regulations or inherent powers cannot override statutory limitation.

3. Section 433 confers express power on NCLT/NCLAT

The Supreme Court acknowledged that Section 433 fundamentally alters the legal position:

It expressly applies the Limitation Act to proceedings before NCLT/NCLAT
Sections 4 to 24 of the Limitation Act, including Section 5 (condonation of delay), become applicable
This power exists only because Parliament consciously conferred it

The Court observed that the legislature deliberately synchronised the enforcement of Section 433 with the constitution of the NCLT/NCLAT.

4. Section 433 is prospective, not retrospective

A crucial holding of the judgment is that:

Section 433 cannot be applied retrospectively
It does not validate or cure actions taken by the CLB
Legal rights and obligations must be tested based on the law as it stood on the date of filing

Accordingly, High Courts cannot rely on later statutory changes to sustain earlier orders.

Legal Position After the Judgment

The law now stands clearly settled as follows:

Forum	Power to condone delay
Company Law Board (pre-01.06.2016)	❌ No
NCLT (post-01.06.2016)	✅ Yes, under Section 433
NCLAT	✅ Yes, under Section 433

However, even for the NCLT:

Condonation is discretionary
Applicant must establish “sufficient cause”
Express statutory bars (e.g., “but not thereafter”) still prevail

Practical Implications

For litigants:
Delay can be condoned before the NCLT, but only with a properly pleaded and substantiated application.
For companies:
Limitation objections remain a strong preliminary defence, particularly for matters arising during the CLB era.
For practitioners:
The forum and filing date are critical in determining whether condonation is legally permissible.

Conclusion

The Supreme Court’s judgment reinforces a foundational rule of procedural law:

Condonation of delay is not an inherent judicial power; it is a creature of statute.

By holding that the NCLT’s power to condone delay flows solely from Section 433, and by denying retrospective application, the Court has brought doctrinal clarity and procedural certainty to company law litigation.