Bihariji Consaltancy Private Limited vs Vaibhav Khandelwal

IN THE MATTER OF: Govardhan Nirman Pvt. Ltd. ...Appellant

Versus

Vaibhav Khandelwal & Anr. ...Respondents

With Company Appeal (AT) (Insolvency) No. 1567 of 2024 & I.A. No. 5613, 5682 of 2024

IN THE MATTER OF: Trinity Vanijya Pvt. Ltd. ...Appellant

Versus

Vaibhav Khandelwal ...Respondent

With Company Appeal (AT) (Insolvency) No. 1684 of 2024 & I.A. No. 6061, 6148 of 2024

IN THE MATTER OF: Swaraj Vanijya Pvt. Ltd. ...Appellant

Versus

Vaibhav Khandelwal ...Respondent

With Company Appeal (AT) (Insolvency) No. 1686 of 2024 & I.A. No. 6057, 6155 of 2024

IN THE MATTER OF: Bihariji Consultancy Pvt. Ltd. ...Appellant

Versus

Vaibhav Khandelwal ...Respondent With Company Appeal (AT) (Insolvency) No. 1688 of 2024 & I.A. No. 6051, 6161 of 2024

IN THE MATTER OF: Mohan Motor Businees Pvt. Ltd. ...Appellant

Versus

Vaibhav Khandelwal ...Respondent

Present : For Appellant/ : Ms. Uttara Babbar, Sr. Advocate with Mr. Manan Bansal, Mr. Rayana Mukherjee, Advocates.

For Respondent : Mr. Rishav Banerjee, Mr. Saikat Sarkar, Ms. Prerna Shaha, Advocates with Mr. Vaibhav Khandelwal, Liquidator in person.

ORDER

(Hybrid Mode)

Per: Barun Mitra, Member (Technical)

I.A. No. 5382 of 2024 is an application filed by the Appellant praying for

condonation of 121 days' delay in refiling of Company Appeal (AT)(Ins) No.

1524 of 2024.

2. Notice was issued in respect of the above IAs 5382 and 5524 of 2024 by

this Tribunal vide order dated 27.08.2024 which reads as under:

ORDER (Hybrid Mode) 27.08.2024: I.A. No. 5382, 5524 of 2024 "Issue notice on delay condonation of application as well as the condonation of delay in refiling the appeal.

Reply be filed within two weeks, Rejoinder, if any, may file within two weeks, thereafter.

List on 25.09.2024."

Page 2 of 9 Company Appeal (AT) (Insolvency) Nos. 1524, 1567, 1684, 1686 & 1688 of 2024

3. Separate I.A. Nos. 5613 of 2024 (delay of 127 days) in CA (AT) (Ins) No.

1567 of 2024, IA- 6061 of 2024 (delay of 134 days) in CA (AT) (Ins) No. 1684

of 2024 (delay of 134 days), IA- 6057 of 2024 (delay of 134 days) in CA (AT)

(Ins) No. 1686 of 2024 and IA No. 6051 of 2024 (delay of 134 days) in CA (AT)

(Ins) No. 1688 of 2024 have also been filed seeking condonation of refiling

delay.

4. For the present, we propose to deal with the Refiling Delay Condonation

Application No. 5382 of 2024 wherein the Applicant has given the following

explanation at Paragraph 2.2 of the application justifying the refiling delay

which is as reproduced below:

"The delay of 121 days in filing appeal may kindly be condoned as the same is neither intentional or deliberate which have occurred on account of logistical difficulties faced due to the unforeseen health conditions encountered by the clerk. The appellant has therefore filed the present Interim Application seeking condonation of delay in filing appeal by this Hon'ble Appellate Tribunal."

5. Reply has been filed by the Respondent to the Refiling Delay

Condonation Application of the Applicant. In their reply affidavit, the

Respondent has opposed the grounds of condonation cited by the Applicant

by holding them as untenable, false, vague and unsubstantiated. It was also

pressed by the Learned Counsel for the Respondent that the Applicant was all

along negligent and lax in curing the defects in their appeal and had

catapulted into action only after a notice of contempt was sent to them on

30.06.2024. Refuting the tenability of explanation offered by the Applicant in

justification of refiling delay, the Respondent submitted that not only was the Page 3 of 9 Company Appeal (AT) (Insolvency) Nos. 1524, 1567, 1684, 1686 & 1688 of 2024 span of delay in refiling inordinately long but the grounds cited were

implausible. Elaborating further it was pointed out that the ground relied

upon by the Applicant of bad health of the clerk causing delay in the curing

of defects cannot be accepted as no proof of any illness of the clerk has been

placed on record and during the same period when the clerk was supposedly

ailing, the Applicant is found to be actively litigating in other fora of law. Even

the alibi of summer vacations of this Tribunal lacks foundation as the Registry

was very much functional during this period. In support of their contention

that condonation of delay needs to be buttressed by adequate and sufficient

reasons, the Ld. Counsel for the Respondent adverted reference to the

judgment of this Tribunal in Adisri Commercial Pvt. Ltd. V/s Reserve Bank

of India & Anr. in C.A.(AT)(Ins) No. 1293 & 1294 of 2022. It was

emphatically asserted that in the absence of genuine, sufficient and valid

grounds, the Refiling Delay Condonation Application of the Applicant deserves

to be rejected.

6. The Applicant has filed rejoinder to the reply affidavit of the

Respondent. Submission was pressed by the Learned Sr. Counsel for the

Applicant that the delay was not intentional or deliberate. It was submitted

that the delay had occurred on account of the fact that five connected appeals

had been filed with each having multiple applications and hence innumerable

defects were required to be removed. This difficulty was further compounded

by the fact that the defects were received enmasse from the Registry. It was

further pointed out that several duplicate emails and SMSs were received from

the Registry for the same defects which had added to confusion and Page 4 of 9 Company Appeal (AT) (Insolvency) Nos. 1524, 1567, 1684, 1686 & 1688 of 2024 complications in tracking the defects and curing them. To cap it all, the clerk

of the filing counsel was not keeping good health which substantially delayed

the curing of the defects. Moreover, since this was the first case which was

filed by the counsel through the medium of e-filing portal and the counsel not

being familiar with the filing process on the e-portal, he had failed to keep

proper record of the defects and its removal. Another reason that was pleaded

for causing delay was that there was the intervening period of summer

vacations from 03.06.2024 to 30.06.2024. It was also vehemently contended

that most of the defects were cured in the months of April and May 2024 and

hence the contention of the Respondent that the Applicant was stirred into

action only after a notice of contempt had been issued on them on 13.06.2024

lacks foundation.

7. We have heard the rival contentions of both the parties and perused the

records carefully.

8. At the outset, we would like to point out that it is well recognised that

while dealing with refiling delay condonation applications, a liberal approach

is expected to be normally taken and as long as sufficient cause is shown,

such delays in refiling are to be condoned. Be that as it may, it also goes

without saying that the delay in refiling can be condoned only if the Tribunal

is satisfied that there was reasonable and justifiable cause for not refiling the

appeal on time. In other words, the delay has to be tested on the parameters

of reasonableness so that the objectives of IBC of time-bound resolution is not

Page 5 of 9 Company Appeal (AT) (Insolvency) Nos. 1524, 1567, 1684, 1686 & 1688 of 2024 diluted and the interest of either of the parties involved is not prejudicially

affected in any manner.

9. The question of condoning any delay in refiling would have to be seen in

the context of the explanation offered to find out whether the reasons cited were

beyond the control of the Applicant and all efforts were made to overcome the

delay with due diligence and utmost despatch. There is no hard and fast rule to

measure due diligence and due despatch. However, due diligence and despatch

can always be assessed from how a prudent person would act or can be expected

to act in a timely manner in similar circumstances. We would now like to examine

whether the present Applicant has been able to adduce cogent grounds to satisfy

us that there were circumstances beyond their control which led to the delay in

clearing the defects. When we look at the history of filing, we find that the Appeal

along with application seeking condonation of delay was filed in March, 2024

and defects were intimated soon thereafter by the Registry in the same month.

Since the time of intimation of defects, the Applicant has taken four months to

remedy the defects. One of the principal explanations attributed for the delay by

the Ld. Counsel for the Applicant was that there were five inter-connected

appeals with each of them having multiple applications and hence the defects

which had to be corrected were quite a few. The Applicant has also attributed the

delay in correcting the defects on account of a sudden barrage of emails and

SMSs on the defects in the petition having been received from the NCLAT

Registry. It was stated that the clerk of the counsel who was conversant with

dealing with such defective petitions was ailing and as he was not able to attend

to the defects, it led to the delay. We however find that the ill health of the clerk Page 6 of 9 Company Appeal (AT) (Insolvency) Nos. 1524, 1567, 1684, 1686 & 1688 of 2024 has not been substantiated by placing on record any proof of his illness which

puts a question mark on the plausibility of this excuse. Even if we accept that

the clerk was suffering from some ailment, this impediment was not that

formidable that it could not have been overcome. The Applicant could have

always substituted this clerk with some other team-member. This scapegoat also

appears to be a humbug since ample evidence has been placed by the

Respondent to show that the counsel of the Applicant was pursuing various

litigations before other forums of law during the same period of time when the

clerk was purportedly ailing. The Ld. Counsel for the Respondent in their

additional affidavit at pages 19 to 41 has placed on record that the counsel for

the Applicant had been filing cases before the Hon'ble Supreme Court of India

during the same time period. This has not been controverted by the Applicant.

That being the case when the counsel for the Applicant was at ease in

contemporaneously filing litigations in other courts, if he was sufficiently

diligent, he could have displayed similar level of alacrity in dealing with defects

in the present set of appeals filed before this Tribunal to render them defect-free.

It becomes clear that the Applicant was actively litigating before other judicial

forum while being clearly negligent in following-up the present matter before the

Tribunal. This is indicative of negligence and inaction on the part of the

Applicant. We therefore do not find that sufficient cause has been made out

which would warrant overlooking the delay caused in curing the defects on the

grounds of ill-health of the clerk.

10. This brings us to some of the other grounds cited to explain the delay in

rectifying the defects. One such ground was that as several duplicate Page 7 of 9 Company Appeal (AT) (Insolvency) Nos. 1524, 1567, 1684, 1686 & 1688 of 2024 emails/SMSs were received from the NCLAT Registry, this had hampered them

in effectively attending to the defects in a timely manner. This is a facile

explanation as the Registry was duty-bound to convey the defects and since there

were admittedly five related appeals with a host of applications, there was

nothing unusual for the Registry in communicating the defects to the Applicant

by sending bunched automated emails and SMSs. Interestingly, on the one

hand, the Applicant has relied on this plea to explain the delay in redressing the

defects while on the other hand they have admitted their failure to place on

record the duplicate emails/SMSs which impeded their swift action. The

lackadaisical approach of the Applicant is further borne out from the fact that it

has admitted that their counsel was unable to access these communications sent

by the Registry from their own clerk. Further, the challenges faced by the

Applicant in dealing with curing of defects on the e-portal is also not a credible

excuse since this e-portal arrangement was a common platform which is used by

all litigants. Even the attribution of court vacations as a ground for delay lacks

credence since the Registry was open and working even during vacation time.

Nothing has been shown on record to establish that the Registry of this Tribunal

was not operational or not e-functional during the vacations. We find all these

excuses to be perfunctory in nature. The Applicant has clearly failed to indicate

any circumstance beyond his control which warranted 121 days to clear the

defects. This renders all their explanations for delay to be bald and facile. Since

the time of intimation of defects, the Applicant was prevaricating over the defects

for nearly four months. No credible, genuine endeavours were made by the

Applicant to correct the defects. This shows that the Applicant was casual, Page 8 of 9 Company Appeal (AT) (Insolvency) Nos. 1524, 1567, 1684, 1686 & 1688 of 2024 callous, careless and negligent in refiling the appeal on time and such inaction

or dereliction cannot be countenanced. We are of the view that the Applicant

cannot be shown indulgence keeping in view that the IBC proceedings have

stringent timelines to be followed and the adjudicatory proceedings have to be

completed in a prompt, expeditious and time bound manner.

11. We are thus of the considered view that sufficient grounds have not been

made out for condonation of 121 days' delay in refiling of the CA (AT)(Ins) No.

1524 of 2024. Having rejected this application, consequently all related I.As

stand closed and the Memo of Appeal is rejected. Since the same grounds for

condonation of refiling delay have also been indicated in IA No. 5613 of 2024 in

CA (AT) (Ins) No. 1567 of 2024, IA No. 6061 of 2024 in CA (AT)(Ins) No. 1684 of

2024, IA No. 6057 of 2024 in CA (AT) (Ins) No. 1686 of 2024 and IA No. 6051 of

2024 in CA (AT)(Ins) No. 1688 of 2024, these IAs are also rejected and

consequentially the related Memos of Appeal are also rejected.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical) Place: New Delhi Date: 06.12.2024 Harleen/Abdul

Page 9 of 9 Company Appeal (AT) (Insolvency) Nos. 1524, 1567, 1684, 1686 & 1688 of 2024