Pushpa Builders Ltd vs Paramveer Disributors Pvt Ltd
- CitationCompany Appeal (AT) (Ins.) No. 1371 of 2022
Ratio decidendi
The rule this decision rests on
The appellate period under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 is thirty days from the date of the adjudicating authority's order, extendable by the Appellate Tribunal on proof of sufficient cause for no more than a further fifteen days; the Tribunal has no power to condone any delay beyond that outer limit of forty-five days. An application for condonation of delay under the proviso to Section 61(2) is itself to be filed within the forty-five-day outer limit, and where it is filed after that limit the Tribunal lacks jurisdiction to condone the delay, so the application must be dismissed and the appeal, dependent upon it, falls with it. The Tribunal's lack of jurisdiction to condone delay beyond the statutory period cannot be cured by an allegation of fraud or by the appellant's health circumstances, since jurisdiction under Section 61(2) is confined to the statutory limit.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Pushpa Builders Ltd. ...Appellant
Versus
Paramveer Distributor Pvt. Ltd. ...Respondent
Present: For Applicant: Mr. Rajeev Lochan, Adv. For Respondent: Mr. Abhishek Anand, Mr. Shankari Mishra, Ms. Niharika Tanwar, Mr. Karan Kholi, Advocates for RP Mr. Ishaan Mukherjee, Mr. Rohit Saroj, Advocates for R1
ORDER
Per: Justice Rakesh Kumar Jain:
This appeal is filed by an ex-director of the Corporate Debtor against
the order dated 20.09.2022, passed by the Adjudicating Authority (National
Company Law Tribunal, New Delhi Bench, Court - III) by which an application
under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short 'Code')
Read with Rule 4 of the Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rule, 2016 (in short 'Rules') bearing IB-306/ND/2022
filed by the Financial Creditor (M/s Paramveer Distributors Pvt. Ltd.) against
the M/s Pushpa Builders Ltd. (Corporate Debtor) has been admitted.
2. The Appellant has filed this appeal alongwith an application bearing I.A.
No. 4282 of 2022 invoking Rule 11 of the NCLAT Rules, 2016 (in short 'Rules,
2016) for condonation of delay of 12 days in filing of the appeal. In Para 3 of
the Application, reasons have been assigned for condonation of delay alleging
Company Appeal (AT) (Ins.) No. 1371 of 2022 & I.A. No. 4282 of 2022 2
that "this appeal petition delay is due to multi ailments of health issues of
Appellant who is 70 years old senior citizen having under gone heart surgery,
suffering from self-collapse of vertebral D10 & D11 causing difficulty in body
movements, high level diabetic problem & blood pressure and also a post
corona patient with law immunity to recurring fall prey to infections and viral
ailments resulting in communication gap of the Appellant with his counsel in
delay in filing the appeal petition. That the delay is neither intentional nor
deliberate but due to some circumstances beyond the control of the
Appellant."
3. Counsel for the Appellant has submitted that the ex-parte order has
been passed on 20.09.2022 and because of the reasons mentioned in Para 3
of the application, delay of 12 days has been caused in filing of the appeal
which may be condoned.
4. On the other hand, Counsel for Respondent has submitted that the
impugned order was passed on 20.09.2022. The period of 30 days prescribed
for filing of the appeal had expired on 21.10.2022. The additional period of 15
days also expired on 04.11.2022 whereas the application for condonation is
verified on 07.11.2022 and filed on 09.11.2022 and is thus beyond the period
of entire 45 days and as such the application for condonation of delay is not
maintainable. In support of his submissions, he has relied upon two
judgments of the Hon'ble Supreme Court in the case of V. Nagarajan Vs.
SKS Ispat and Power Limited (2022) 2 SCC 244 and National Spot
Exchange Limited Vs. Mr. Anil Kohli, RP for Dunar Foods Limited, Civil
Appeal No. 6187 of 2019 decided on 14.09.2021.
Company Appeal (AT) (Ins.) No. 1371 of 2022 & I.A. No. 4282 of 2022 3
5. We have heard Counsel for the parties and examined the records with
their able assistance.
6. Section 61 of the Code provides for appeals and appellate authority. It
would be relevant to refer to the Section 61(1), (2) and its proviso which read
as under: -
"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 days1 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"
7. As per Section 61(1) any person aggrieved by the order of the
Adjudicating Authority under this part may file an appeal to the Appellate
Tribunal. As per Section 61(2) every appeal which is to be filed under Section
61(1) has to be filed within 30 days before the Appellate Tribunal. As per 61(2)
proviso the Appellate Tribunal has the jurisdiction to extend the period of 15
days if it is satisfied that there is a sufficient cause for not filing the appeal
within the prescribed time.
8. The present appeal has been filed beyond the period of 45 days i.e. a
period of 30 days provided in Section 61(1) and 15 days provided in proviso
to Section 61(2). In this regard, Hon'ble Supreme Court in the case of V.
Nagarajan (Supra) has held that: -
Company Appeal (AT) (Ins.) No. 1371 of 2022 & I.A. No. 4282 of 2022 4
"The answer to the two issues set out in Section C of the judgement- (i) when will the clock for calculating the limitation period run for proceedings under the IBC; and (ii) is the annexation of a certified copy mandatory for an appeal to the NCLAT against an order passed under the IBC - must be based on a harmonious interpretation of the applicable legal regime, given that the IBC is a Code in itself and has overriding effect. Sections 61(1) and (2) of the IBC consciously omit the requirement of limitation being computed from when the "order is made available to the aggrieved party", in contradistinction to Section 421(3) of the Companies Act. Owing to the special nature of the IBC, the aggrieved party is expected to exercise due diligence and apply for a certified copy upon pronouncement of the order it seeks to assail, in consonance with the requirements of Rule 22(2) of the NCLAT Rules. Section 12(2) of the Limitation Act allows for an exclusion of the time requisite for obtaining a copy of the decree or order appealed against. It is not open to a person aggrieved by an order under the IBC to await the receipt of a free certified copy under Section 420(3) of the Companies Act 2013 read with Rule 50 of the NCLT and prevent limitation from running. Accepting such a construction will upset the timely framework of the IBC. The litigant has to file its appeal within thirty days, which can be extended up to a period of fifteen days, and no more, upon showing sufficient cause. A sleight of interpretation of procedural rules cannot be used to defeat the substantive objective of a legislation that has an impact on the economic health of a nation."
9. In the case of National Spot Exchange Limited (Supra) has held
that:-
"Thus, considering the statutory provisions which provide that delay beyond 15 days in preferring the appeal is uncondonable, the
Company Appeal (AT) (Ins.) No. 1371 of 2022 & I.A. No. 4282 of 2022 5
same cannot be condoned even in exercise of powers under Article 142 of the Constitution."
10. Thus, in view of the aforesaid facts and circumstances, even if, the
Appellant has submitted that a fraud has been played, in so far as, the delay
is concerned, it cannot be condoned by this Tribunal because of lack of
jurisdiction. The application is thus dismissed and as a consequence of
dismissal of the application for condonation of delay, the main appeal is also
dismissed. However, without any order as to costs.
[Justice Rakesh Kumar Jain] Member (Judicial)
[Mr. Naresh Salecha] Member (Technical)
New Delhi
28th March, 2023.
Sheetal
Company Appeal (AT) (Ins.) No. 1371 of 2022 & I.A. No. 4282 of 2022
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