Hasmukh Nanalal Shah vs Shri Parag K Sheth
- CitationComp. App. (AT) (Insolvency) No. 779 of 2020
Ratio decidendi
The rule this decision rests on
Where the appeal is filed beyond the thirty-day period under Section 61(2) of the Insolvency and Bankruptcy Code, the Appellate Tribunal may condone delay only up to a further fifteen days and only on sufficient cause shown; an appeal not filed within that extended period, and without sufficient cause assigned, is liable to be dismissed as time-barred. Liquidation ordered under the Code after the committee of creditors approves liquidation upon no resolution plan being received within the 270-day period is not set aside merely because, after the liquidation order, a financial creditor accepts a settlement proposal from the corporate debtor's promoter; such a subsequent settlement does not by itself furnish a ground to reverse the liquidation order, and settlement may instead be pursued during the liquidation proceedings under Section 230 of the Companies Act, 2013.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Hasmukh Nanalal Shah ...Appellant
Versus
Shri Parag K. Sheth ...Respondent
Present: For Appellant : Ms. Natasha Dhruman Shah, Mr. Jasdeep Dhillon and Ms. Shilpi Chowdhary, Advocates For Respondent : Mr. Nipun Singhvi, Advocate
ORDER
(Through Virtual Mode)
15.09.2020 The impugned order of liquidation having been passed by the
Adjudicating Authority on 5th July, 2019, the appeal filed on 12th March, 2020
is hopelessly time barred. Under the provisions of Section 61(2) of the 'I&B
Code' appeal can be preferred within thirty days. The Proviso to Section 61(2)
empowers this Appellate Tribunal to condone the delay for sufficient cause
assigned by the Appellant but not exceeding fifteen days. The instant appeal has
not been filed even within the extended time.
2. The appeal having not been preferred within the extended time and that
too without assigning any sufficient cause stands dismissed.
3. Even on merit we find that the impugned order of liquidation has been
passed by the Adjudicating Authority in deference to 100% voting of 'Committee
of Creditors' after no resolution applicant came forward with a resolution plan
within 180 days + 90 days = 270 days of the 'corporate insolvency resolution -2-
process' period. The only ground on which the impugned order is sought to be
reversed is that financial creditor (Bank of Baroda) has accepted the proposal of
Appellant for settlement. This is stated to have happened on 22nd July, 2019 as
recorded on page 7 of the appeal paper-book. This event has occurred around
17 days after passing of order of liquidation. This cannot be a ground to set
aside the liquidation order even if the Bank of Baroda happens to be the sole
creditor in the case. We make it clear that settlement can be reached during the
liquidation proceedings within the ambit of Section 230 of the Companies Act.
4. Thus, the appeal does not lie on merit also. We accordingly dismiss the
appeal. However, in view of the pendency of the appeal, we give liberty to the
Appellant to apply for an arrangement/scheme for seeking settlement within one
month.
Appeal is accordingly disposed off.
[ Justice Bansi Lal Bhat ] Acting Chairperson
[Justice Jarat Kumar Jain] Member (Judicial)
[ V.P. Singh ] Member (Technical) /ns/gc/ Comp. App. (AT) (Insolvency) No. 779 of 2020
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