Anshuman Warehousing Private Limited vs M/S K.V. Developers (P) Ltd & Ors

IN THE MATTER OF: Anshuman Warehousing Private Limited 701, Nirmal Tower, 26, Barakhamba Road, Connaught Place, New Delhi - 110001 ...Appellant

Versus

1. M/s K.V. Developers (P) Ltd 621/9 First Floor 18 Quarters, Vishwas Nagar Shahdara Delhi - 110032 ...Corporate Debtor / EMAIL: accounts@kvdevelopers.com Respondent No. 1

2. M/s Brijkishor Trading Private Limited 202, Ankur Bldg, Abodh Co-Op Soc Garodia Nagar, Ghatkopar East Mumbai, ...Successful Resolution Maharashtra - 400077 Applicant/ Email: girish@skothari.com Respondent No. 2

3. Mr. Sumit Kumar Khanna House No. 13 (Ground Floor), Indra Vihar ...Successful Resolution New Delhi - 110009 Applicant/ Email: sumitkhanna@hotmail.com Respondent No. 3

4. Rearco (P) Ltd. D 153, Sector 40, ...Successful Resolution Noida Gautam Buddha Nagar Applicant/ Uttar Pradesh - 201303 Respondent No. 4

5. Monitoring Agency of Corporate Debtor 621/9 First Floor ,18 Quarters Vishwas Nagar Shahdara, Delhi - 110032 ...Respondent No. 5

Present: For Appellant : Mr. Ravi Sehgal, Advocate

For Respondent : Mr. Sumesh Dhawan, Ms. Vatsala Kak and Mr. Shaurya Shyam, Advocates for R-2 to 4. Mr. Harish Taveja and Mr. Praful, Advocates for R-6. ORDER

(Hybrid Mode)

[Per: Arun Baroka, Member (Technical)]

In this matter, the Appeal was taken up on various earlier dates and the

respondents were allowed to file their reply and the Appellant also sought time

to file the Rejoinder Affidavit. On 18.11.2024, I.A. No. 5648 of 2023 was taken

up for condonation of re-filing delay and the following orders were issued:

"18.11.2024: I.A. No. 5648 of 2023: - Counsel for the Appellant prays for an adjournment to explain paragraph 5 & 6 of the application by way of additional affidavit. Adjourned to 19.12.2024."

2. Today both parties were heard on the issue of delay in filing the Appeal.

3. Basis the order of 18.11.2024 the Appellant has tried to provide the

reasons for delay of 156 days in re-filing the appeal, which is captured as below:

"...

2. Pursuant to the liberty granted by this Hon'ble Tribunal vide order dt. 18.11.2024, the counsel for the Appellant is filing the present Additional Affidavit setting out the relevant dates and facts in relation to the delay in re-filing of the Appeal which are as follows:

"Date Particulars 01.06.2023 Captioned Appeal was filed.

12.06.2023 Defects were notified and the limitation period of 7

days for refiling this Appeal expired on 19.06.2023. A true copy of the Defect Sheets notified by the Ld. Registry on 12.06.2023 is annexed herewith as ANNEXURE-1.

Upto 1st week of At the time of raising of the defects, counsel for the July, 2023 Appellant was travelling and was out of station. The Deponent only returned to New Delhi on 28.06.2023 in the evening. Due to the aforesaid, the counsel for the Appellant was unable to take any steps to remove the defects at the time.

A true copy of the Boarding Pass of the counsel for the Appellant is annexed herewith as ANNEXURE -

2. I.A. No. 5648 of 2023 In Company Appeal (AT) (Ins.) No. 1583 of 2023 2 of 9 It is pertinent to add here that due to the summer vacations, even the clerk of the counsel for the Appellant was unavailable and thus could not remove defects and he returned only in the first week of July 2023, when the office of the counsel for the Appellant resumed functioning.

21.07.2023 Thereafter, the counsel for the Appellant took steps to remove the defects and the Appeal was refiled by the clerk on 21.07.2023. However, the Ld. Registry informed the Deponent that the defects still remained and were not fully cured. Thus, the clerk of the counsel for the Appellant took further steps to cure the defects and refile the Appeal.

A true copy of the e-filing portal capturing the aforesaid is annexed herewith as ANNEXURE-3.

04.08.2023 The counsel for the Appellant requested the Appellant to provide a fresh Affidavit for the application seeking condonation of the delay in refiling. The same took some time to be dispatched as the authorized representative of the Appellant resides in Alwar, Rajasthan.

Moreover, it is pertinent to state that during transit on 04.08.2023, the Affidavit was misplaced by the courier agency and the Non-Cognizable Report dt. 29.08.2023 has been placed on record as Annexure as Annexure P-1 to I.A. No. 5648/23. Subsequently, another fresh Affidavit had to be executed and sent to Delhi for filing.

16.08.2023 Fresh affidavit was executed and sent by the authorized representative of the Appellant to Delhi for filing which arrived sometime in the end of August 2023.

End - August Around this time, the clerk of the counsel for the 2023 Appellant also abruptly left work of the counsel for the Appellant and thus the counsel for the Appellant faced logistical challenges and had to engage a new clerk for removing the defects and filing which caused some further delay.

September - Once the fresh Affidavit was received by counsel, and October 2023 the counsel engaged the new clerk by the second week of September, 2023, the newly engaged clerk of the Appellant visited the Ld. Registry to clarify as to how to cure the remaining defects and in particular Defect No. 7 relating to the common challenge to IA No. 3447/2021 and 3583/2022.

The Ld. Registry had informed that even though the Impugned Order was a common order allowing IA No. 3447/2021 and 3583/2022, but the Appellant

I.A. No. 5648 of 2023 In Company Appeal (AT) (Ins.) No. 1583 of 2023 3 of 9 was not permitted to challenge both IAs in the same Appeal.

The counsel for the Appellant at the time was of the view that since both IAs were disposed off vide a common order, both IAs could be challenged vide a common Appeal. Hence, the counsel for the Appellant made several visits to the Registry to get clarification of the said issue which took some time. Eventually, counsel for the Appellate was required to remove all references stating that I.A. No. 3447/2021 was being challenged and confine the Appeal to a challenge to 3583/2022. It took some time to cure the said defect.

23.10.2023 to Due to Dusshera Vacation, the office of the counsel 27.10.2023 for the Appellant was not functioning. This caused some further delay in refiling.

13.11.2023 to Due to Diwali Vacation, the office of the counsel for 15.11.2023 the Appellant was not functioning. This caused some further delay in refiling.

22.11.2023 The Appeal was refiled after curing all defects."

[Emphasis supplied]

4. Before proceeding further, we note that as per the records of the Registry,

the facts in refiling delay are as follows:

"2. The facts of the case are that the Appellant e-filed the Memo of Appeal on 01.06.2023. The Office after scrutiny of the Memo of Appeal on 12.06.2023, intimated the defects to the Appellant on the same day. The Appellant re-filed the Memo of Appeal on 22.11.2023. It is stated in the Interlocutory Application (IA) that when the defects were received the Counsel was travelling and then there were several major defects removing of same took some time. Delay has also been caused as the authorized representative of the Appellant resides in Rajasthan and the hardcopy of the affidavit sent by courier has been misplaced and could not be located. Hence, there is delay of 156 days in refiling the Memo of Appeal, so the same may be condoned."

[Emphasis supplied]

5. Per contra, the condonation of delay is opposed by the Respondent No.6

/ Substituted Resolution Professional. It is contended that the statutory

mandate to exercise the remedy of filing an Appeal is provided under Section

61, which is reproduced herein below:

I.A. No. 5648 of 2023 In Company Appeal (AT) (Ins.) No. 1583 of 2023 4 of 9 "Section 61. Appeals and Appellate Authority.

(1) Notwithstanding anything to the contrary contained under the Companies Act 2013 (18 of 2013), any person aggrieved by the order of the Adjudicating Authority under this part may prefer an appeal to the National Company Law Appellate Tribunal.

(2) Every appeal under sub-section (1) shall be filed within thirty days before the National Company Law Appellate Tribunal:

Provided that the National Company Law Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days."

(Emphasis Supplied)

And therefore, for allowing an application seeking condonation, it is pertinent

that the Appellant is able to show sufficient cause for not filing the Appeal

within the stipulated time.

6. The explanation provided by the Appellant as explained herein and also

various judicial precedents has been gone through. The sequence of events

clearly shows a complete lack of respect for the timelines, which are

prescribed in the CIR Process. As per above provisions, under the Code we

need to see whether sufficient cause has been shown in the facts of the case

for the condonation of re-filing delay.

7. From the series of events as enumerated in para 2 it is noted the

Appellant has not been vigilant enough in prosecuting the Appeal which was

initially e-filed on 01.06.2023 and finally refiled on 22.11.2023 after a huge

delay of 156 days. The explanation given by the Appellant is found to be not

sufficient to condone the delay.

8. The Respondent has also relied upon various judgments of Hon'ble

Apex Court. The adherence to procedural timelines has been emphasised

I.A. No. 5648 of 2023 In Company Appeal (AT) (Ins.) No. 1583 of 2023 5 of 9 again and again by Hon'ble Apex Court and also this Appellate Tribunal in

various judgments.

9. In the "Essar Steel India Ltd. Committee of Creditors Vs. Satish Kumar

Gupta, (2020) 8 SCC 531, it has been noted that:

"....

127. Given the fact that the time taken in legal proceedings cannot possibly harm a litigant if the Tribunal itself cannot take up the litigant's case within the requisite period for no fault of the litigant, a provision which mandatorily requires the CIRP to end by a certain date without any exception thereto - may well be an excessive interference with a litigant's fundamental right to non- arbitrary treatment under Article 14 and an excessive, arbitrary and therefore unreasonable restriction on a litigant's fundamental right to carry on business under Article 19(1)(g) of the Constitution of India. This being the case, we would ordinarily have struck down the provision in its entirety. However, that would then throw the baby out with the bath water, inasmuch as the time taken in legal proceedings is certainly an important factor which causes delay, and which has made previous statutory experiments fail as we have seen from Madras Petrochem [Madras Petrochem Ltd. v. BIFR, (2016) 4 SCC 1: (2016) 2 SCC (Civ) 478]. Thus, while leaving the provision otherwise intact, we strike down the word "mandatorily" as being manifestly arbitrary under Article 14 of the Constitution of India and as being an excessive and unreasonable restriction on the litigant's right to carry on business under Article 19(1)(g) of the Constitution.

The effect of this declaration is that ordinarily the time taken in relation to the corporate resolution process of the corporate debtor must be completed within the outer limit of 330 days from the insolvency commencement date, including extensions and the time taken in legal proceedings. However, on the facts of a given case, if it can be shown to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days, and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation and that the time taken in legal proceedings is largely due to factors owing to which the fault cannot be ascribed to the litigants before the Adjudicating Authority and/or Appellate Tribunal, the delay or a large part thereof being attributable to the tardy process of the Adjudicating Authority and/or the Appellate Tribunal itself, it may be open in such cases for the Adjudicating Authority and/or Appellate Tribunal to extend time beyond 330 days.

Likewise, even under the newly added proviso to Section 12, if by reason of all the aforesaid factors the grace period of 90 days from the date of commencement of the Amending Act of 2019 is exceeded, there again a discretion can be exercised by the Adjudicating Authority and/or Appellate Tribunal to further extend time keeping the aforesaid parameters in mind. I.A. No. 5648 of 2023 In Company Appeal (AT) (Ins.) No. 1583 of 2023 6 of 9 It is only in such exceptional cases that time can be extended, the general rule being that 330 days is the outer limit within which resolution of the stressed assets of the corporate debtor must take place beyond which the corporate debtor is to be driven into liquidation."

(Emphasis Supplied)

10. Also in the case of Gujarat Urja Vikas Nigam Ltd. Vs. Amit Gupta,

(2021) 7 SCC 209 it has been held by the Hon'ble Apex Court that:

"....

69. The institutional framework under IBC contemplated the establishment of a single forum to deal with matters of insolvency, which were distributed earlier across multiple fora. In the absence of a court exercising exclusive jurisdiction over matters relating to insolvency, the corporate debtor would have to file and/or defend multiple proceedings in different fora. These proceedings may cause undue delay in the insolvency resolution process due to multiple proceedings in trial courts and courts of appeal. A delay in completion of the insolvency proceedings would diminish the value of the debtor's assets and hamper the prospects of a successful reorganisation or liquidation. For the success of an insolvency regime, it is necessary that insolvency proceedings are dealt with in a timely, effective and efficient manner."

(Emphasis Supplied)

11. This Tribunal has also dealt on the same issue in M/s Technology

Frontiers (India) Pvt. Ltd. represented by M.S. Muralidharan Vs. Catalyst

Trusteeship Ltd. 2023 SCC OnLine NCLAT 1705 as follows:

"....

6. Section 61(1) provides a Statutory Right of an Appeal to any person who is aggrieved by the Order of the Tribunal. Section 61(2) prescribes a period of 30 days for filing such an Appeal as provided under Section 61(1). Section 61(2) proviso further provides a period of 15 days both to the Appellant/Applicant and the Appellate Tribunal for the purpose of entertaining the Application for Condonation of Delay in filing the Appeal beyond a period of 30 days, however, the Appellate Tribunal cannot arbitrarily allow the Application for Condonation of Delay as it is required to be satisfied that there was a sufficient cause for the Applicant/Appellant in not filing the Appeal in time prescribed under Section 61(2).

7. Since, there is no discretion with the Appellate Tribunal and it has only to look into the fact that the reason given by the Appellant/Applicant for not preferring the Appeal within a period of 30 days and seeking extension of period of Limitation within the window of 15 days has a sufficient cause for the same."

(Emphasis Supplied) I.A. No. 5648 of 2023 In Company Appeal (AT) (Ins.) No. 1583 of 2023 7 of 9

12. The issue of timelines has been further elaborated by Hon'ble Apex Court

in Ebix Singapore Singapore (P) Ltd. vs. Educomp Solutions Ltd. (CoC),

(2022) 2 SCC 401, the relevant extract as follows:

"101. Any claim seeking an exercise of the adjudicating authority's residuary powers under Section 60(5)(c) IBC, NCLT's inherent powers under Rule 11 of the NCLT Rules, 2016 or even the powers of this Court under Article 142 of the Constitution must be closely scrutinised for broader compliance with the insolvency framework and its underlying objective. The adjudicating mechanisms which have been specifically created by the stature, have a narrowly defined role in the process and must be circumspect in granting reliefs that may run counter to the timeliness and predictability that is central to IBC. Any judicial creation of a procedural or substantive remedy that is not envisaged by the statute would not only violate the principle of separation of powers, but also run the risk of altering the delicate coordination that is designed by IBC framework and have grave implications on the outcome of the CIRP, the economy of the country and the lives of the workers and other allied parties who are statutorily bound by the impact of a resolution or liquidation of a corporate debtor."

(Emphasis Supplied)

13. The condonation of refiling delay has also been dealt in by this Tribunal

in Ram Ratan Modi Vs. Dail Consultants Ltd. & Ors. in Company Appeal

(AT) (Insolvency) No. 1264 of 2024 on 12.09.2024, wherein the following

orders have been passed:

"....

5. When we look into the explanation given by the Appellant, it is clear that Appellant has not been vigilant in prosecuting the Appel which was filed as earlier in August 2023 and refiled on May 2024 with huge delay of 278 days, the explanation given in the Application are not sufficient to condone the inordinate delay of 278 days. In the IBC Proceedings litigant who are negligent in prosecuting the proceedings cannot be given any indulgence especially when the Appeal was filed by the RP who is well aware the importance of the timelines and necessarily of conclusion of all proceedings in a timeline."

14. All above judicial pronouncements don't support the case of the

Appellant. IBC proceedings are time bound. No indulgence can be given for

condoning such long delays which do not have sufficient casue. It appears that I.A. No. 5648 of 2023 In Company Appeal (AT) (Ins.) No. 1583 of 2023 8 of 9 the Appellants' attempts are to hinder and restrict the resolution process from

attaining finality. Under these circumstances of 156 days of delay in refiling

and also supported by judicial precedents and provisions of the Code, re-filing

delay cannot be condoned. Accordingly, I.A. No. 5648 of 2023 is rejected and

Memo of appeal with other IAs also dismissed.

[Justice Yogesh Khanna] Member (Judicial)

[Arun Baroka] Member (Technical) New Delhi.

December 23, 2024.

pawan

I.A. No. 5648 of 2023 In Company Appeal (AT) (Ins.) No. 1583 of 2023 9 of 9