Kotak Mahindra Bank Limited vs State Bank Of India & Anr

IN THE MATTER OF: Kotak Mahindra Bank Ltd. ...Appellant

Versus

State Bank of India & Anr. ...Respondents

Present: For Appellant : Mr. Himanshu Bhushan, Advocate For Respondents : Mr. Ms. Meghna Rao, Mr. Amir Arsiwala and Nidhi Shah, Advocates

ORDER

26.04.2023: Heard learned Counsel for the parties.

2. This appeal has been filed against the order dated 09.03.2023 which is to

the following effect.

"NATIONAL COMPANY LAW TRIBUNAL COURT-I, MUMBAI SPECIAL BENCH

Item 17

CA 2228/2020 IA 602/2021 1A 852/2021 IA 1494/2021 IA 1495/2021 IA 1496/2021 IA 1584/2021 1A 1595/2021 1A 2481/2021 TA 858/2021 in C.P. (IB)/2889(MB)2019

CORAM:

SH. PRABHAT KUMAR

HON'BLE MEMBER (TECHNICAL) HON'BLE MEMBER (JUDICIAL) SH. H.V. SUBBA RAO ORDER SHEET OF THE HEARING ON 09.03.2023

NAME OF THE PARTIES:- Kotak Mahindra Bank Limited Vs Gupta Synthetics Limited Appearance (via video-conference):

For the SBI-CA 2228 : Adv. Rishi Thakur a/w. Adv.

Dhwani Gala i/b. ZBA

For the Liquidator Liquidator: Nidhi Shah i/b Amir Arsiwala

For the IDBI Bank : Ms. Jovita Reema Mathias Advocate Inayat Ali Qureshi i/b K K Associates

ORDER

Ld. Counsel for the Parties are present. List this matter on Board on 30.03.2023, for further consideration and hearing. Registry is directed to retain the position of this matter High on Board on the adjourned date.

Sd/- Sd/-

PRABHAT KUMAR H.V. SUBBA RAO MEMBER (TECHNICAL) MEMBER (JUDICIAL)

3. By the aforesaid order, the matter has been adjourned to 30.03.2023. We

see no reason to entertain such appeal against the aforesaid order.

4. Learned Counsel for the Appellant submits that the order dated

09.12.2020 by which an Interim Order was passed by the Adjudicating

Authority NCLT, Court No. 1, Mumbai, Special Bench) in IA No. 2228/2020

filed by State Bank of India is without jurisdiction and hence this Appeal may

also be entertained against the said order dated 09.12.2020.

5. There are two reasons due to which the above submissions cannot be

accepted. Firstly, this appeal is not against the order dated 09.12.2020.

Limitation for filing an appeal under Section 61 IBC is 30 days against an

order. This appeal filed against the order dated 09.12.2020 is highly barred by

time and cannot be entertained. To meet the aforesaid, learned Counsel for the

Company Appeal (AT)(Insolvency) No. 502 of 2023 Page 2 of 6 Appellant submits that the order dated 09.12.2020 is without jurisdiction,

hence the limitation question does not arise. He submits that the order dated

09.12.2020 was passed in an Appeal under Section 42 filed by State Bank of

India which was barred by time. He submits that when the Appeal is barred by

time, Adjudicating Authority had no jurisdiction to pass any Interim Order

although he submits that the Adjudicating Authority has condoned the delay in

filing the Appeal subsequently. Learned Counsel for the Appellant relied on two

judgments of Hon'ble Supreme Court. One (2008) 14 SCC 445, titled "Noharlal

Verma Vs. District Cooperative Central Bank Limited, Jagdalpur". In

paragraph-32, the Hon'ble Supreme Court, while was dealing with case

regarding disciplinary proceeding, following has been laid down in paragraphs-

32 & 33.

"32. Now, limitation goes to the root of the matter. If a suit, appeal o application is barred by limitation, a court or an adjudicating authority has no jurisdiction, power or authority to entertain such suit, appeal or application and to decide it on merits.

33. Sub-section (1) of Section 3 of the Limitation Act, 1963 reads as under:

"3. Bar of limitation. (1) Subject to the provisions contained in Sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed although limitation has not been set up as a defence."

Bare reading of the aforesaid provision leaves no room for doubt that if a sui is instituted, appeal is preferred or application is made after the prescribed period, it has to be

Company Appeal (AT)(Insolvency) No. 502 of 2023 Page 3 of 6 dismissed even though no such plea has been raised or defence has been set up. In other words, even in absence of such plea by the defendant, respondent or opponent, the court or authority must dismiss such suit, appeal or application, if it is satisfied that the suit, appeal or application is barred by limitation."

6. There cannot be quarrel to the law, as laid down by Hon'ble Supreme

Court in the aforesaid case. When an Appeal/Application is barred by time, the

Court has no jurisdiction to pass an order and in fact the provision of

Limitation Act oblige the Court to reject the suit or application. Here, in this

case, the Appeal is under Section 42 filed by SBI with a delay condonation

prayer and there was jurisdiction of the Adjudicating Authority to condone the

delay, while entertaining the said Appeal, the Adjudicating Authority passed an

Interim Order staying distribution under liquidation. It is further submitted

that subsequently, the delay has been condoned. When the delay has been

condoned, we do not find any infirmity in the Interim Order passed by the

Adjudicating Authority.

7. Next Judgment, learned Counsel for the Appellant, relied upon is in the

matter of "SARUP SINGH AND ANOTHER VERSUS UNION OF INDIA AND

ANOTHER"- (2011) 11 SCC 198. In paragraphs 20 & 21, the following have

been laid down:

"20. Insofar as the second issue is concerned, it is true that the executing court cannot go behind the decree and grant interest not granted in the decree as submitted by the counsel appearing for the appellants in the light of the decision rendered by this Court in State of Punjab v. Krishan Dayal

Company Appeal (AT)(Insolvency) No. 502 of 2023 Page 4 of 6 Sharma But, if a decree is found to be a nullity, the same could be challenged and interfered with at any subsequent stage, say, at the execution stage or even in a collateral proceeding. This is in view of the fact that if a particular court locks inherent jurisdiction in passing a decree or an making an order, a decree or all order passed by such court would be without jurisdiction and the same is non est and void ab initio.

21. The aforesaid position is well settled and not open for any dispute as the defect of jurisdiction strikes at the very root and authority of the court to pass decree which cannot be cured by consent or waiver of the parties. This Court in several decisions has specifically laid down that validity of any such decree or order could be challenged at any stage. In Union of India v. Sube Ram this Court held thus: (SCC pp. 70- 71, para 5) "5.... here is the case of entertaining the application itself; in other words, the question of jurisdiction of the court. Since the appellate court has no power to amend the decree and grant the enhanced compensation by way of solatium and interest under Section 23(2) and proviso to Section 28 of the Act, as amended by Act 68 of 1984, it is a question of jurisdiction of the court. Since courts have no jurisdiction, it is the settled legal position that it is a nullity and it can be raised at any stage."

8. In the above case, Court has held that decree without jurisdiction can be

questioned even in execution proceeding. There cannot be any quarrel to the

said proposition of law. A decree passed without jurisdiction is nullity and can

be avoided in execution proceeding. In the present case the above declaration

of law by the Hon'ble Supreme Court in the matter of "SARUP SINGH AND

Company Appeal (AT)(Insolvency) No. 502 of 2023 Page 5 of 6 ANOTHER VERSUS UNION OF INDIA AND ANOTHER"- (2011) 11 SCC 198 is

not applicable, we thus are of view that there is no ground to impugn the order

dated 09.12.2020 in this appeal and submissions advanced by learned Counsel

for the Appellant for impugning the order dated 09.12.2020 are rejected.

9. We however noticing that I.A. No. 2228/2020 is pending for more than

two years, observe that Adjudicating Authority may decide the I.A. No.

2228/2020 on the next date or as early as possible thereafter.

Subject to the above, we dismiss the present appeal.

[Justice Ashok Bhushan] Chairperson

[Mr. Barun Mitra] Member (Technical) akc/nn

Company Appeal (AT)(Insolvency) No. 502 of 2023 Page 6 of 6