Ketan Anant Raj vs Dhanshyam Kantilal Patel

National Company Law Appellate Tribunal, New Delhi Principal Bench I.A. No. 11 of 2021 IN COMPANY APPEAL (AT) (Insolvency) No. 599 of 2020 (Arising out of Order dated 13.12.2019 passed by National Company Law Tribunal, Mumbai Bench, MA 2811/ 2019 in Company Petition (IB) No. 10/ (MB)/ 2018).

IN THE MATTER OF:

1. Ketan Anant Raj Address: 206, Laxmi Darshan, Shikhndewadi, Manpada Road, Dombivali (E), Dist. Thane 421202, Maharashtra ...Appellant 1 E-mail:- drketanraj@gmail.com

2. Raajul Ketan Raj Address: Plot No. 51, Sector- 15, Near Maharatha Bhawan Navi Mumbai, Vashi, Thane- 400703. ...Appellant 2

Versus

1. Dhanshyam Kantilal Patel (Liquidator of Krishnai Hospital Private Limited) Address: 322, Zest Business Spaces, M G Road, Ghatkopar East Mumbai City, Maharashtra- 400077 ...Respondent No. 1

2. Rajkot Nagrik Sahakari Bank Address: 41, Dev Karan Mention Opposite Mangal Das Market, Shamaldas Gandhi Marg, Lohar Chal Kalbadevi, Mumbai- 400002. ...Respondent No. 2

3. Novateur Electrical & Digital System Pvt. Ltd. Address: 61/ 62, 6th Floor, Kalpataru Square, Kondivita Road Off Andheri- Kurla Road, Andheri (East) Mumbai MH- 400059. ...Respondent No. 3

Appellants: Mr. Prerak P Chaudhary, Advocate. -2-

Respondents: Mr. Amey Hadwale, for R-1. Ms. Madhavi Nalluri & Mr. Pankaj Tripathi, for R-2. Ms. Vidhi N Sharda, Advocate. Mr. Dhanshyam Patel, Liquidator in person.

JUDGEMENT

[Anant Bijay Singh (J)]

1. The Interlocutory Application No. 1590 of 2020 had been filed under

Section 14 of the Limitation Act, 1963 in Company Appeal (AT) (Ins.) No. 599

of 2020 by the Appellant herein.

2. Appellant had preferred this Appeal bearing Company Appeal (AT)

(Ins.) No. 599 of 2020 which was filed under Section 61 of the I&BC vide

Diary No. 20044 on 19.03.2020 being aggrieved and dissatisfied by the

Impugned Order dated 13.12.2019 passed by the Learned Adjudicating

Authority (National Company Law Tribunal, Mumbai Bench) in MA 2811/

2019 in C.P. (IB)- 10(MB)/ 2018.

3. In I.A No. 1590 of 2020 the Applicant had mentioned the fact that the

Appellant herein - 'Ketann Anant Raj' filed a Writ Petition (ST) No. 31546 of

2019 before the High Court of Judicature at Bombay Civil Appellate

Jurisdiction and order was passed on 20th December, 2019, which is as

hereunder:-

1.This petition was placed before us after the urgent mentioning. We allowed the petitioner's advocate to move this matter in our chambers on the last working day only when she stated that she is ready and willing to serve the contesting respondents.

2.Today, the advocate is appearing for respondent No.3 (Liquidator of respondent no.5) and she says that this

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application is not made bona fide. She says that the petitioner had enough time to bring a proposal of settlement and he is, without showing his bona fides, moving this matter.

3.We called upon the petitioner's advocate to make good atleast 50% of the amount offered by the petitioner in terms of a proposal for one time settlement given to the fourth respondent bank. The demand draft of Rs.1 crore was never tendered nor the petitioner's advocate stating that a sum of Rs.2 crores, as suggested by this court, can be deposited immediately.

4. In these circumstances, we do not think that this is a fit case for grant of any ad-interim order. The ad-interim order is refused.

5. Place the writ petition after vacation.

4. It was submitted that Writ Petition was filed based upon receipt of the

legal advice by the Appellant No. 1. It is further averted in the I.A. No. 1590

of 2020 that this Hon'ble Appellate Tribunal at that time was about to close

on account of winter vacations while the Appellant No. 1 was in dire need of

an urgent relief. In the Writ Petition the Appellant No. 1 prayed for several

reliefs, including a stay on the impugned order as liquidation of the

Corporate Debtor would sound a death knell for it.

5. It is further averted in the I.A that on the legal advice, the Appellant

continued to pursue the said Writ Petition before the Hon'ble Bombay High

Court all along. During the pendency of the said writ petition, the

Appellants were advised by their new lawyers to file the instant appeal before

this Hon'ble Appellate Tribunal against the impugned order dated

13.12.2019. So, the Appellant filed this Instant Appeal on 19.03.2020.

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6. So, it was prayed that there was 89 days delay in filing the Instant

Appeal and in terms of provision under Section 14 of the Limitation Act,

1963 which was spent in pursing the remedies in Writ Petition (ST) No.

31546 of 2019 be excluded and the I.A. No. 1590 of 2020 be allowed.

7. Learned Counsel for the Respondent No. 1/ Liquidator had filed a

Reply Affidavit and opposed the prayer for 'Condonation of Delay for 89 days'

in I.A. No. 1590 of 2020.

8. It was submitted by the Respondent No. 1 in his Reply Affidavit that

the Instant Appeal which was filed by the Appellant i.e. Erstwhile Directors

of the Corporate Debtor was not maintainable as it is ex-facie barred by

limitation as it will be demonstrated from the facts mentions below: -

"4. The Liquidator/Respondent No. 1 states that, the impugned order was passed by the Hon'ble NCLT, Mumbai Bench on 13.12.2019 and the instant appeal is preferred by the Appellants in the month of March 2020, which clearly demonstrates that the instant appeal is filed beyond the timelines as prescribed under section 61 of the Code which reads as under:

Section 61: Appeals and Appellate Authority: (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

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expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing the appeal but is satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days.

Hence from the above, it is apparent that there been a considerable delay in filing the Appeal and the Appellants being habitual in abusing the process of law and wasting precious judicial time deserve no reliefs.

5. From the contents of the Present Interlocutory application it transpires that the appellant is seeking exclusion of 89 days in computing the limitation of filling the instant appeal. While claiming such relief, the Appellants seems to be taking shelter under section 14 of Limitation Act, 1963 for excluding the period i.e. 89 days spent in pursuing the Writ Petition(ST) No. 31546 of 2019 before the Hon'ble Bombay High Court, on pretext of being before the wrong forum against the impugned order. But while doing so, the Appellants have miserably failed to demonstrate" due diligence" and "good faith" which are the key as well as critical ingredients of the said Section. Section 14 of the Limitation Act, 1963.

6. Firstly, they Hon'ble Appellate Tribunal may examine the mandate as laid under section 14 of Limitation Act, 1963 which states as follows:

Section 14 - Exclusion of time of proceeding bona fide in court without jurisdiction (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted

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in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like mature, is unable to entertain it.

(3) Notwithstanding anything contained in rule 2 of Order XXIll of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order where such permission is granted on the ground that the first suit must fit by reason of a defect in the jurisdiction of the court or other cause of a like nature, Explanation. - For the purposes of this section-

(a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;

(b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;

(c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction, As seen from the above, before granting any reliefs in terms of section 14 of Limitation Act, 1963, the Hon'ble Appellate Tribunal may be pleased to satisfy itself as to whether he proceedings under the said Writ Petition

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were been prosecuted by the appellants with due diligence and in good faith.

7. At this juncture, Liquidator/ Respondent No. 1 humbly submits that the Appellants filed the proceeding/ Writ Petition before the Hon'ble Bombay High Court with utmost dishonest intentions which can be demonstrated from more than one reasons mentioned below:

(i) Firstly, Appellants were very well aware of their right to prefer an appeal against the impugned order before this Hon'ble Appellate Tribunal under section 61 of the Code, despite the same they wittingly choose to move Hon'ble Bombay High Court with deceitful intentions. The said fact can be corroborated with the letter dated 19.12.2019 issued by the appellant to the Liquidator falsely stating that they have already preferred an appeal against the impugned order before this Hon'ble Appellate Tribunal, whereas no such appeal was made by then. Such false representation was done by the appellant with the sole intent of obstructing the liquidator from discharging its duties and taking possession of assets of the Corporate Debtor. Copy of letter dated 19.12.2019 issued by the appellant to the Liquidator is annexed herewith and marked as "Annexure A".

9. It is further submitted by the Respondent No. 1 in his reply Affidavit

that a letter was received by Resolution Professional (Liquidator of Krishnai

Hospital Private Limited) dated 19.12.2019 under signature of (Erstwhile

Director of Krishnai Hospital) & K.Raj. Copy of the letter is mentions as

hereunder:-

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10. From the perusal of the aforesaid letter dated 19.12.2019 we are of the

considered view that the Appellants have knowledge that the Appeal was to

be preferred before the NCLAT but instead of filing the Appeal before NCLAT

the Appellant filed the Appeal before the Hon'ble Bombay High Court.

11. Further submissions was made on behalf of the Respondent No. 1 in

his Reply Affidavit which are as follows:-

"Hence in the instant case the appellants cannot be said to be prosecuting the Writ petition before Bombay High Court with due diligence and in good faith because the petitioners had full knowledge that the Court of competent jurisdiction lay elsewhere. Hence it is humbly submitted that the appellants completely failed to show good faith which is a sine qua non for benefit under Section 14 of Limitation Act, 1963. This ground alone is fatal to the maintainability of the instant appeal and the same needs to be dismissed with exemplary costs.

a) Secondly, in the said Writ Petition, the Appellants prayed for stay on the Liquidation order dated 13.12.2019, however, vide order dated 20.12.2019 the Hon'ble High Court had denied any ad interim relief to the Appellants and had held that "In these circumstances, we do not think that this is a fit case for grant of any ad-interim order. The ad-interim order is refused". Copy of the Order dated 20.12.2019 passed by the Hon'ble Bombay High Court is annexed herewith marked as " Annexure -

B". From the above, it is crystal clear that as no reliefs were granted by the Hon'ble Bombay High Court, hence nothing prevented the appellants from approaching this Appellate Tribunal. However, the Appellants deliberately

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chose to keep the Writ Petition hanging and are now trying to take shelter u/s 14 of Limitation Act. This clearly cannot be said to be a diligent act of the appellant instead it is a sheer portrayal of negligent and reckless attitude.

b) Thirdly, it is stated that the Appellants has approached the Bombay High Court for urgent reliefs under the pretext of winter vacations of this Hon'ble Appellate Tribunal. However, it is a matter of fact that the winter vacations of this Hon'ble Tribunal ended on 1st January 2020. As the Bombay High Court vide its order dated 20.12.2019 had also refused to grant any ad interim relief, the Appellants had ample opportunity to prefer an appeal after the winter vacations ended so as to be within the time as prescribed u/s 61 of the Code. However, the appellant chose to sleep on their rights and instead of acting vigilantly preferred to file the appeal belatedly only in the month of March 2020.

c) Moreover, the Respondent No.1 is taken by surprise with the fact that, the Appellants in their Application vide para (4) have stated that they continued to pursue the said Writ Petition before the Hon'ble Bombay High Court all along but as a matter of fact, the said Writ Petition was never heard by the Hon'ble Bombay High Court after its order dated 20.12.2019 neither the appellants bothered to move a urgent circulation to bring the said Writ Petition on board and press for other reliefs as asked for in the Writ Petition. This itself exposes the blatant lies and rather makes the Appellants neglectful and careless attitude towards its own rights more evident.

d) Fourthly, it may not be out of place to mention that, it is not the case of the appellant that the said writ petition was dismissed by the Hon'ble Bombay High Court on account of 'defect in jurisdiction' or 'other cause' instead the appellants have suo moto withdrawn the said Writ

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Petition. At this juncture it is worthy to again reiterate section 14(1) of Limitation Act, 1963."

12. The Limitation Petition under Section 14 of the Limitation Act, 1963

filed in I.A. No. 1590 of 2020 for 'Condonation of Delay of 89 days' cannot be

allowed.

13. It was further submitted that the Calendar of the year 2019 was

produced before this Tribunal Bench and it appears that vacation was

started from 21st December, 2019 and the Impugned Order was passed on

13.12.2019. So, the Appellant was having more than 7 days in 2019 and

sufficient time in year 2020 to prefer this Appeal before this Tribunal within

Limitation. Hence, the statement advanced on behalf of the Appellant that

this Tribunal was closed due to Winter Vacation was not correct and cannot

be accepted. Copy of the Calendar of year 2019 is reproduced as under:-

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14. After hearing the Learned Counsel for the Parties and gone through all

the documents and submissions advanced on behalf of the Appellants and

Respondent, we are of the considered view that the Appellant had knowledge

that the Appeal lies under Section 61 of the I& BC and further the Impugned

Order was passed on 13.12.2019 and the Appellate Tribunal was open as

per Calendar year 2019. So, they were having sufficient time to file this

Appeal before this Tribunal and there is no merit in the I.A. No. 1590 of

2020.

15. And accordingly the Appeal is dismissed without costs.

16. All pending I.A's are also dismissed.

17. The Registry is directed to upload this Judgement on the website of

this Appellate Tribunal.

18. Registry is directed to send a copy of the Judgement to the National

Company Law Tribunal, Mumbai Bench.

[Justice Anant Bijay Singh] Member (Judicial)

[Ms. Shreesha Merla] Member (Technical)

NEW DELHI 21st December, 2021

Sim

I.A. No. 11 of 2021 In Company Appeal (AT) (Insolvency) No. 599 of 2020