Cloud9 Apartment Owners Association vs Mohit Goyal & Anr

Principal Bench, New Delhi Comp. App. (AT) (Ins) No. 573 of 2023 & I.A No. 1874 of 2023

IN THE MATTER OF: Cloud9 Apartment Owners Association ...Appellant Vs. Mohit Goyal ....Respondents Resolution Professional for Aadi Best Consortium Pvt. Ltd. & Anr. Present:

For Appellants : Mr. Abhinav Sharma, Mr. Shreesh Pathak, Advs.

For Respondent : Mr. G.P.Madaan, Mr. Aditya Madaan, Ms. Aishwarya Adlakha, Ms. Natasha, for R1.

Mr. Adhish Srivastava, Mr. Avdhesh Bairwa, Advocate for R2.

ORDER

Per : Justice Rakesh Kumar Jain (Oral)

12.05.2023: The Operational Creditor - Yogesh Gupta filed an appeal

under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter

referred as to 'The Code') R/w Rule 6 of the Insolvency and Bankruptcy

(Application to Adjudicating Authority) Rules, 2016 to initiate Corporate

Insolvency Resolution Process (hereinafter referred as to 'CIRP') against M/s.

Aadi Best Consortium Private Limited (Corporate Debtor). The said application

was admitted by order dated 31.03.2022. The said impugned order is amenable

to appeal in terms of Section 61 of the Code for which a period of 30 days is

prescribed and in case there is a delay then it is provided to be condoned only

upto 15 days and not thereafter.

Comp. App. (AT) (Ins) No. 573 of 2023 & I.A No. 1874 of 2023 2

2. The present appeal has been filed by 'Cloud9 Apartment Owner

Association' who did not file the appeal within the statutory period of 30 days

plus 15 days and rather filed WP(C) No. 12668 of 2022 before the Hon'ble High

Court of Delhi which was disposed of on 24.03.2022 with the following orders:

"1. This hearing has been done through hybrid mode.

2. The Petitioner-, a registered association of flat buyers in

the project titled 'Cloud9', has challenged the order dated

31st March, 2022 passed by the NCLT. Vide the impugned

order, a Resolution Professional has been appointed and

moratorium has been declared under section 14 of the

Insolvency & Bankruptcy Code, 2016 ('IBC') by the NCLT.

3. The case of the Petitioner is that the project is 80-90%

complete and for a debt of around Rs.1.5 crore, the NCLT

has directed the moratorium without considering the interest

of the apartment owners.

4. The ld. Counsel for the Petitioner submits that the appeal

against the impugned order of the NCLT could not be filed

within the limitation period of 45 days period, in view of the

fact that the Petitioner is a registered Apartment Owners

Association and it took time in putting the association

together. Moreover, as recorded in the order dated 22nd

February 2023, 80% - 90% of the project is completed, which

in the opinion of this Court is an important fact that ought to

Comp. App. (AT) (Ins) No. 573 of 2023 & I.A No. 1874 of 2023 3

be considered before the Resolution Process under the

provisions of IBC commences and is given effect to.

5. Accordingly, in the unique facts and circumstances of this

case, the Petitioner-Cloud9 Apartment Owners Association is

permitted to approach the NCLAT challenging the order

dated 31st March, 2022. The appeal shall not be dismissed

on the ground of limitation, if the Petitioner approaches the

NCLAT within 15 days.

6. None has appeared for the Respondents.

7. This Court has not considered the legal questions raised

in this petition. 8. Petition is disposed of in these terms. All

pending applications are disposed of."

3. The present appeal is then filed on 04.04.2023 along with an application

bearing IA No. 1874 of 2023 for condonation of delay. Counsel for Appellant

has submitted that since the appeal has been filed within the time provided by

the Hon'ble High Court of Delhi, therefore, there is no delay in filing of the

appeal.

4. We have heard counsel for the Appellant and perused the record with

their able assistance.

5. The remedy of appeal is a creation of statute. Section 61 of the Code

deals with the appeal and the Appellate Authority. Section 61(1) & (2) and its

proviso are relevant for this case, therefore, the same is reproduced as under:

Comp. App. (AT) (Ins) No. 573 of 2023 & I.A No. 1874 of 2023 4

"Section 61: Appeals and Appellate Authority.

61. (1) Notwithstanding anything to the contrary contained

under the Companies Act 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."

6. It is provided in Section 61(1) of the Code that if any person is aggrieved

by the order of the Adjudicating Authority, he may prefer an appeal to this

Tribunal. Section 61(2) of the Code provides that every such appeal provided

under Section 61(1) shall be filed within thirty days before this Tribunal and

proviso to Section 61(2) says that the period of 30 days allowed to file the

appeal can further be extended to 15 days and not thereafter. Meaning thereby,

the limitation to file an appeal before this Tribunal is only upto 45 days out of

which the period of fifteen days can be used by the Appellant for the purpose of

Comp. App. (AT) (Ins) No. 573 of 2023 & I.A No. 1874 of 2023 5

extension of period of limitation on assigning sufficient cause to the

satisfaction of the Appellate Authority for condonation of delay.

7. In the present case, admittedly within the period of 30 days and even the

extended period of 15 days i.e. 45 days no appeal was filed rather the Writ

Petition was filed before the Hon'ble High Court in which the aforesaid order

has been passed.

8 In the case of 'National Spot Exchange Limited Vs. Anil Kohli Resolution

Professional for Dunar foods Limited' rendered in 'Civil Appeal No 6187 of 2019'

decided on 14.09.2022, there was a delay of 44 days beyond the period of 45

days which was sought to be condoned and one of the argument raised by the

Counsel for the Appellant was that the said delay may be condoned by

exercising the jurisdiction under Article 142 of the Constitution of India. The

Hon'ble Supreme Court, however, dismissed the said appeal on the ground of

limitation, observing thus:

"The Act is a special legislation within the meaning of Section 29 (2) of the Limitation Act and, therefore, the prescription with regard to the limitation has to be the binding effect and the same has to be followed regard being had to its mandatory nature. To put it in a different way, the prescription of limitation in a case of present nature, when the statute commands that this Court may condone the further delay not beyond 60 days, it would come within the ambit and sweep of the provisions and policy of legislation. It is equivalent to Section 3 of the Limitation Act. Therefore, it is uncondonable and it cannot be condoned taking recourse to Article 142 of the Constitution." 11.2 In the case of Teri

Comp. App. (AT) (Ins) No. 573 of 2023 & I.A No. 1874 of 2023 6

Oat Estates (P) Ltd. v. U.T. Chandigarh, reported in (2004) 2 SCC 130, in paragraphs 36 & 37, it is observed as under:

"36. We have no doubt in our mind that sympathy or sentiment by itself cannot be a ground for passing an order in relation whereto the appellants miserably fail to establish a legal right. It is further trite that despite an extraordinary constitutional jurisdiction contained in Article 142 of the Constitution of India, this Court ordinarily would not pass an order which would be in contravention of a statutory provision.

As early as in 1911, Farwell, L.J. In Latham v. Richard Johnson & Nephew Ltd. (1911-12) All ER Rep 117 observed: (All ER p. 123E) "We must be very careful not to allow our sympathy with the infant plaintiff to affect our judgment. Sentiment is a dangerous will o' the wisp to take as a guide in the search for legal principles" 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.

12. In view of the afore-stated settled proposition of law and even considering the fact that even the certified copy of the order passed by the adjudicating authority was applied beyond the period of 30 days and as observed hereinabove there was a delay of 44 days in preferring the appeal which was beyond the period of 15 days which maximum could have been condoned and in view of specific statutory provision contained in Section 61(2) of the IB Code, it cannot be said that the NCLAT has committed any error in dismissing the appeal on the ground of limitation by observing that it has no jurisdiction and/or power to condone the delay exceeding 15 days."

Comp. App. (AT) (Ins) No. 573 of 2023 & I.A No. 1874 of 2023 7

9. With due respect to the order passed by the Hon'ble High Court of Delhi,

it is pertinent to mention that this Tribunal does not have jurisdiction to

condone the delay after a period of 45 days in view of the decision rendered by

the Hon'ble Supreme Court in National Spot Exchange Limited (supra).

10. Hence, we do not find any merit in the application for condonation of

delay and accordingly, this application as well as the appeal is hereby

dismissed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Naresh Salecha] Member (Technical) Raushan/Ravi

Comp. App. (AT) (Ins) No. 573 of 2023 & I.A No. 1874 of 2023