Axis Bank Limited vs Naren Sheth

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI I.A. NO.4166 OF 2024 IN COMPANY APPEAL (AT) (Ins)NO.1164 OF 2024 In the matter of: Axis Bank Appellant Vs Naren Sheth & Anr Respondent For Appellant:Mr Arun Kathpalia, Sr. Advocate with Mr. Shadab Jan, Ms Suchitra Valjee, Mr. Sanidhya Kumar, Mr. Aditya Dhupar, Mr. Rajyi Shah, Advocates. For Respondent:Mr. Jayant Mehta, Sr. Advocate with Mr. Arpan Behl, Mr. Rajat Sinha, Mr. Aakash Sharma, Advocates for R2. Mr. Navin Pahwa, Sr. Advocate, Mr. Asav Rajan, Ms Charu Trivedi, Mr. Devang Shropriya, Advocates for R1. ORDER

14.08.2024

IA No.4166 of 2024 This is an application for condonation of delay in filing the appeal.

There is a delay of 15 days. The same is objected to by the Learned counsel

for Respondent No.1. He has raised two issues (a) certified copy was never

applied or obtained by the appellant; and (b) the manner of calculating the

period of limitation.

2. Qua issue (a) the learned counsel for the appellant submitted after the

impugned order of dated 5th April, 2024 was passed, the appellant had

immediately applied for a certified copy by moving an application before the 2

Registry on 08.04.2024 itself and was given Application Number D4005.

Thereafter a certified copy was issued on 15.04.2024 though marked as

certified true copy issued free of cost

3. It is argued by the learned counsel for Respondent No.1 the copy filed

with the appeal was a free copy and it would never save the limitation for

appeal, as the appellant had failed to pay fee for obtaining such certified copy.

It is argued the copy of the impugned order annexed with the appeal cannot

be treated as a certified copy in terms of Section 2(a) of the NCLT Rules.

Reference was made to SBI Vs India Power Corporation Ltd, Company Appeal

(AT)(CH)(Ins) No.53 of 2024 decided on 09.07.2024 wherein this Tribunal held

a free copy under Rule 50 of the NCLT rules cannot be treated as a certified

copy to enable an appeal sustainable in violation of the terms of Rule 22(2) of

NCLAT Rules. Thus it is argued a free copy is not substitute for a certified

copy which has to be obtained on demand and on payment of requisite fee.

4. Thus it was argued by the learned counsel for the Respondent since

there is no proof of payment of any fee to the Registry for obtaining certified

copy of the order dated 05.04.2024, the alleged period from 08.04.2024 to

15.04.2024 cannot be excluded and the appeal is thus barred by limitation.

5. Qua (b) it was argued under the IBC the limitation would start from the

date of pronouncement of the order and not from the next day of order. In

support of his arguments the Respondent No.1 referred to M/s Ralyan Hotels

and Resorts Pvt Ltd Vs Unrivalled Projects Pvt Ltd, Company Appeal (AT)(Ins)

No.588 of 2023 2023 SCC Online NCLAT 734 wherein this Tribunal held:- 3

12. From the submissions of the Counsel for the parties in both the Appeals, following questions arise for consideration: (i) Whether limitation for filing an Appeal under Section 61 of the IBC shall commence from the date of the order or from the date when contents of the order are known to the aggrieved party i.e. the date when copy of the order is received by an aggrieved party?

(ii) Whether in the Delay Condonation Application being IA No.3694 of 2023 sufficient grounds have been made out to condone the delay in filing the Appeal?

(iii) Whether in Delay Condonation Application being IA No.1956 of 2023 sufficient grounds have been made out to condone the delay in filing the Appeal?

33. In view of the forgoing discussions, we are of the view that Question (i) has to be answered in following manner:-

The limitation for filing an Appeal under Section 61 shall commence from the date when the order is pronounced and not from the date when aggrieved party or Appellant claims to have knowledge of the contents of the order.

6. Further Kalpraj Dharamshi and Another vs Kotak Investment Advisors

Ltd & Another (2021) 10 Supreme Court Cases 401 was referred to, wherein

the Hon'ble Supreme Court held:-

53. Since there is a period different from the one which is prescribed by the Schedule to the Limitation Act, the limitation for an appeal would be governed by Section 61 of the I&B Code, which is a special statute. As such, an appeal will have to be preferred within a period of thirty days from the date on which the order was passed by NCLT. However, if NCLAT is satisfied, that there was sufficient cause for not filing the appeal within a period of thirty days, it may allow an appeal to be filed within a further period of fifteen days. As such, the normal period of limitation prescribed under the I&B Code is thirty days, with a provision for allowing the filing of an appeal within a further period of fifteen days, if NCLAT is satisfied, that there was a sufficient cause for not filing the appeal within thirty days.

54. In the present case, the dates are not in dispute. The judgment of NCLT is dated 28-11-2019. As such, as per Section 61(2) of the I&B Code, the appeal was required to be filed on or prior to 28-12-2019. The appeal could have been filed within a further period of fifteen days, if NCLAT was satisfied, that there 4

was sufficient cause for not filing the appeal within a period of thirty days. As such, the said period would come to an end on 12-1-2020. The certified copy of the impugned judgment of NCLT was made available on 18-12-2019. If the allowance for the said period is granted, the appeal should have been preferred on or prior to 2-2-2020. However, in the present case, the appeal is filed on d 18-2-2020. It is also not in dispute, that immediately after the order was passed on 28-11-20192 by NCLT, KIAL preferred a writ petition being Writ Petition (L) No. 3621 of 2019 before the Division Bench of the Bombay High Court on 11-12-

2019. The said writ petition came to be dismissed on 28-1-2020 on the ground, that KIAL had an alternate and efficacious remedy available under Section 61 of the I&B Code and as such, it was relegated to the alternate remedy available in law.

7. Further in National Spot Exchange Ltd Vs Anil Kohli RP for Dunar

Foods Ltd (2022)11 Supreme Court Cases 761 the Hon'ble Supreme Court

held:-

"Thus, considering the statutory provisions which provide that delay beyond 15 days in preferring the appeal is uncondonable, the same cannot be condoned even in exercise of powers under Article 142 of the Constitution."

8. Further in V Nagarajan V SKS Ispat & Power Ltd (2022) 2 SCC 244

was referred wherein the Hon'ble Supreme Court held:-

"However it is important to note that this Court had only extended the period of limitation applicable in the proceedings, only in cases where such period had not ended before 15.03.2020. In this case, owing to the specific language of Sections 61(1) and 61(2), it is evident that limitation commenced once the order was pronounced and the time taken by the court to provide the appellant with a certified copy would have been excluded as clarified in Section 12(2) of the Limitation Act. If the appellant had applied for a certified copy within the prescribed period of limitation under Section 61(2) IBC.

9. Heard.

10. We propose to decide issue (b) first. We are of the view there exist a

clear distinction as to when does the limitation starts and how the limitation

period needs to be computed. Section 12 of the Limitation Act deals with 5

computation of the limitation. Though much is said by the learned senior

counsel for Respondent No.1 viz. per Section 29 of the Limitation Act,

Sections 4 to 24 of the Limitation Act shall not be applicable in an appeal filed

under other statutes, but the correct position of law is not so. Section 29 of

the Limitation Act read:-

29. Savings.--

(1)Nothing in this Act shall affect section 25 of the Indian Contract Act, 1872 (9 of 1872).

(2)Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law.

11. A bare perusal of Section 29(2) (Supra) would rather reveal the

applicability of Section 4 to 24 unless expressly excluded by the Special Law.

Admittedly the IBC does not exclude the applicability of Section 4 to 24 of

Limitation Act. Rather Section 238A of the Code reads:-

"238-A Limitation. The provisions of the Limitation Act, 1963(36 of 1963) shall, as far as may be, apply to the proceedings or appeals before the Adjudicating Authority, the National Company Law Appellate Tribunal, the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal, as the case may be.

12 Now Section 12 of the Limitation Act reads as under:-

12. Exclusion of time in legal proceedings.--(1) In computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned, shall be excluded.

6 (2) In computing the period of limitation for an appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained of was pronounced and the time requisite for obtaining a copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded.

13. On a combined reading of Section 238A of the Code with Sections 12

and 29(2) of the Limitation Act, we cannot say the Code has excluded

applicability of Sections 4 to 24 of Limitation Act. Rather Section 238A of the

Code says the provisions of Limitation Act shall apply as far as may applicable

to the proceedings under the Code.

14. Sub-section (2) of Section 12 rather makes it clear the date of

pronouncement is out of window. This section deals with computation of

Limitation and is in the teeth of specific provision of law viz Section 61 of the

Code as also the judgements referred to above. A bare perusal of the

judgments cited by the learned senior counsel for the Respondent would show

Computation of Limitation was never an issue in such judgements. Rather

issue before the Courts was whether the limitation would start from the date

of pronouncement or from the date of knowledge. Para 12 of Raylan Hotels and

Resorts Pvt Ltd (Supra) clearly indicate the issues involved. Similar in Kalpraj

(supra) the issues were different viz. limitation for an appeal under Section 61

would be 30 days and not 90 days as stipulated in Article 114 of the Limitation

Act. A bare reading of Para 54 of Kalpraj (supra) would rather reveal the date

of judgement was excluded for calculating period of limitation for filing an

appeal.

15. We have also perused Rule 3 of NCLAT Rules, which clears the mist. It

reads:-

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"3. Computation of time period-When a period is prescribed by the Act and these rules or under any other law or is fixed by the Appellate Tribunal for doing any act, in computing the time, the day from which the said period is to be reckoned shall be excluded, and if the last day expires on a day when the office of the Appellate Tribunal is closed, that day and any succeeding day on which the Appellate Tribunal remains closed shall also be excluded.

16. This rule has also been discussed by this Tribunal in Sanket Kumar

Agarwal and Another Vs APG Logistics Pvt Ltd (2024) 2 Supreme Court Cases

545 wherein it held:-

"In the present case, the order was pronounced by NCLT on 26.08.2022. Rule 3 of the NCLAT Rules, 2016 stipulates that the date from which the period of limitation has to be reckoned (i.e. the date of the pronouncement of the order) would have to be excluded. Hence, the date on which the order was pronounced by NCLT, namely, 26.08.2022 would have to be excluded from the computation of limitation. This is in line with Section 12(1) of the Limitation Act, 1963, As noted earlier, the provisions of the Limitation Act, 1963 are made applicable, inter alia, to appeals before NCLAT by virtue of Section 238-A IBC."

17. Thus per Sanket Kumar Agarwal (supra), the day of pronouncement

shall have to be excluded for calculating the period for Limitation. Admittedly

if it is excluded in the present case the appeal shall be within the condonable

period of 15 days.

18. Now we come to the issue (a) cited above. The facts reveal the appellant

had applied for a certified copy of order on 08.04.2024 and was given

application No.D-0005. The certified copy of the impugned order was given on

15.04.2024 and is annexed with this appeal and records the application

number. We are of the considered view this fact is sufficient to vibe a

confusion that such copy though marked as free copy may be a certified copy

as its mentions the date and application number D-0005 given by Registry on

application of certified copy. We have also gone through the reasons for delay 8

given in para 4 to 13 of the application for condonation of delay, which with

time taken in obtaining certified copy can very well be treated as sufficient

cause for condoning of delay in filing the appeal beyond 30 days, but within

the condonable period of 15 days. Thus, we condone the delay.

19. Now to come up now for hearing of appeal on 21.11.2024

(Justice Yogesh Khanna) Member (Judicial)

(Mr. Ajai Das Mehrotra) Member (Technical) Bm/md