Rajeev Goel vs Mansfield Cables Company Limited ...

[Arising out of orders dated 13.01.2023 & 17.01.2023 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench, Court II in CP (IB) No. 79 (ND) 2021]

IN THE MATTER OF:

Rajeev Goel, S/o Sh. Nem Prakash Goel, R/o KF-8, Kavi Nagar, Ghaziabad, Uttar Pradesh - 201002.

...Appellant Vs.

1. Mansfield Cables Company Limited Having its Registered Office at: BF-5A, 2nd Floor, Janakpuri Jail Road, New Delhi - 110058. Through Interim Resolution Professional, Mr. Vinod Kumar Chaurasia B-022, Pragati Vihar Hostel, Lodhi Road, New Delhi - 110003.

2. Mr. Vikas Bajaj. 308, Pearls Business Park, Netaji Subhash Place, Pitampura, New Delhi - 110034. ...Respondents

Present:

For Appellant: Mr. Arvind Kumar Gupta, Ms. Henna George, Advocates. For Respondents: Mr. Brijendra Chahar, Sr. Advocate with Mr. Vinod Kr. Chaurasia, Advocate for R-1 Mr. Abhishek Anand, Mr. Mohak Sharma, Mr. Sajal Jain, Advocates for R-2

Cont'd.../ -2-

ORDER

ASHOK BHUSHAN, J.

These two I.As have been filed praying for condonation of delay in filing

Company Appeal (AT) (Ins.) Nos. 351 & 352 of 2023 filed against orders dated

13.01.2023 and 17.01.2023 passed in Company Petition (IB) No. 79 (ND)

2021. Both the Appeals were e-filed in this Tribunal on 15.03.2023.

2. The Appellant's case in the delay condonation application is that

the order dated 13.01.2023 and 17.01.2023 were ex-parte passed. The order

dated 13.01.2023 was passed against Mansfield Cables Company &

Infrastructure Pvt. Ltd., which is not the Corporate Debtor in which the

Appellant is Suspended Director. It is submitted that the order dated

13.01.2023 initiating the CIRP under Section 9 was against Mansfield Cables

Company & Infrastructure Pvt. Ltd. which is not the Corporate Debtor. The

Operational Creditor moved application being I.A. No.244 of 2023 in Company

Petition (IB) No. 79 (ND) 2021, on which the Adjudicating Authority passed an

order on 17.03.2023 and observed that although serious mistake has

committed on behalf of the applicant, however, Court is not inclined to take

any further action and accepted the unconditional apology tendered by the

IRP of the applicant company. The Adjudicating Authority on 17.01.2023

changed the name of Corporate Debtor from "Mansfield Cables Company &

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Infrastructure Pvt. Ltd." to "Mansfield Power & Infrastructure Pvt. Ltd." i.e.

Corporate Debtor of which the Appellant is suspended Director. It is

submitted that the Appellant received the information of the order dated

13.01.2023 by letter dated 18.01.2023 received on 07.02.2023 and appeal

has been filed with delay of 6 days, which need to be condoned.

3. The application for delay condonation has been opposed by both

the Operational Creditor as well as the Resolution Professional. Reply by

Respondent No.1 and 2 has been filed to the delay condonation application.

Opposing the delay condonation it is stated by Respondent No.1 in his reply

that order dated 13.01.2023 is not ex-parte order as counsel for the Corporate

Debtor was present on the date of final hearing on 12.12.2022. It is submitted

that after order dated 13.01.2023 was corrected, by email dated 18.01.2023

information was sent of the said order alongwith order dated 13.01.2023 to

the Appellant. Section 9 application was filed on 15.12.2020 where notices

were issued and were duly served.

4. The Respondent No.2 in his reply has submitted that after order

dated 13.01.2023, public announcement was made on 16.01.2023 and after

order was corrected on 17.01.2023, by email dated 18.01.2023 the Appellant

was informed. It is submitted that period for computation of limitation shall

commence from date of order and the Appellant is not entitled for condonation

of delay. Learned counsel for the Respondent has relied on judgment of

Hon'ble Supreme Court in "V. Nagarajan vs. SKS Ispat and Power Limited

& Ors., (2022) 2 SCC 244" and submits the period for computation of

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limitation shall begin from the date order is pronounced by the Adjudicating

Authority.

5. We have considered the submissions of learned counsel for the

parties and perused the record.

6. From the facts, which have been brought on the record it is clear

that on 13.01.2023 when the Adjudicating Authority passed order in

Company Petition (IB) No. 79 (ND) 2021, order was passed against the

company - "Mansfield Cables Company & Infrastructure Pvt. Ltd.", which is

apparent from the copy of order Annexed with Appeal as Annexure A-I. When

insolvency resolution process has not begun against the present Corporate

Debtor of which the Appellant is director i.e. "Mansfield Power &

Infrastructure Pvt. Ltd.", there is no question of limitation start running

against the Corporate Debtor on 13.01.2023, when the order was passed.

There can be no quarrel to the proposition of law laid down by the Hon'ble

Supreme Court in "V. Nagarajan vs. SKS Ispat and Power Limited & Ors."

that limitation for filing an appeal shall commence from the date when the

order is pronounced. Hon'ble Supreme Court in "V. Nagarajan vs. SKS

Ispat and Power Limited & Ors." in Paras 31 to 33 laid down following:

"31. The import of Section 12 of the Limitation Act and its Explanation is to assign the responsibility of applying for a certified copy of the order on a party. A person wishing to file an appeal is expected to file an application for a certified copy before the expiry of the limitation period, upon which the "time requisite"

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for obtaining a copy is to be excluded. However, the time taken by the court to prepare the decree or order before an application for a copy is made cannot be excluded. If no application for a certified copy has been made, no exclusion can ensue. In fact, the explanation to the provision is a clear indicator of the legal position that the time which is taken by the court to prepare the decree or order cannot be excluded before the application to obtain a copy is made. It cannot be said that the right to receive a free copy under Section 420(3) of the Companies Act obviated the obligation on the appellant to seek a certified copy through an application. The appellant has urged that Rule 14 of the NCLAT Rules empowers the NCLAT to exempt parties from compliance with the requirement of any of the rules in the interests of substantial justice, which has been typically exercised in favour of allowing a downloaded copy in lieu of a certified copy. While it may well be true that waivers on filing an appeal with a certified copy are often granted for the purposes of judicial determination, they do not confer an automatic right on an applicant to dispense with compliance and render Rule 22(2) of the NCLAT Rules nugatory. The act of filing an application for a certified copy is not just a technical requirement for computation of limitation but also an indication of the diligence of the aggrieved party in pursuing the litigation in a timely fashion. In a similar factual scenario, the NCLAT had dismissed an appeal as time-barred under Section 61(2) of the IBC since the appellant therein was present in court, and yet chose

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to file for a certified copy after five months of the pronouncement of the order.

32. The appellant had argued that the order of the NCLAT notes that the NCLT registry had objected to the appeal in regard to limitation, to which the appellant had filed a reply stating that the limitation period would begin from the date of the uploading of the order, which was 12 March 2020. The appellant submitted that the suo motu order of this Court dated 23 March 2020, taking retrospective effect from 15 March 2020, made under Article 142 of the Constitution, extended the limitation until further orders, which renders the appeal filed on 8 June 2020 within limitation. However it is important to note that this Court had only extended the period of limitation applicable in the proceedings, only in cases where such period had not ended before 15 March 2020. In this case, owing to the specific language of Section 61(1) and 61(2), it is evident that limitation commenced once the order was pronounced and the time taken by the Court to provide the appellant with a certified copy would have been excluded, as clarified in Section 12(2) of the Limitation Act, if the appellant had applied for a certified copy within the prescribed period of limitation under Section 61(2) of the IBC. The construction of the law does not import the absurdity the appellant alleges of an impossible act of filing an appeal against an order which was uploaded on 12 March 2020. However, the mandate of the law is to impose an obligation on the appellant to apply for a certified copy once the order was

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pronounced by the NCLT on 31 December 2019, by virtue of Section 61(2) of the IBC read with Rule 22(2) of the NCLAT Rules. In the event the appellant was correct in his assertion that a correct copy of the order was not available until 20 March 2020, the appellant would not have received a certified copy in spite of the application till such date and accordingly received the benefit of the suo motu order of this Court which came into effect on 15 March 2020. However, in the absence of an application for a certified copy, the appeal was barred by limitation much prior to the suo motu direction of this court, even after factoring in a permissible fifteen days of condonation under Section 61(2). The Court is not empowered to condone delays beyond statutory prescriptions in special statutes containing a provision for limitation.

33. 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

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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."

7. The above judgment of the Hon'ble Supreme Court with regard to

commencement of period of limitation from the date order is pronounced/

delivered is firmly settled. Limitation shall start for filing appeal from the date

of pronouncement of order i.e. on 13.01.2023 but not against the Corporate

Debtor of which Appellant is suspended Director rather limitation shall start

against the Company "Mansfield Cables Company & Infrastructure Pvt. Ltd.",

against whom the order was passed. The above fact is not under dispute in

view of the subsequent order passed on 17.01.2023 of the Adjudicating

Authority in I.A. No. 244 of 2023 filed by the Operational Creditor, the

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Respondent No.1. It is useful to extract the order dated 17.01.2023, which is

to the following effect:

"ORDER

IA-244/2023: The present IA is filed by the IRP of the Applicant Company seeking condonation and rectification of the inadvertent typographical error while filing the incorrect Memo of Parties, In para 10 of its application, the Applicant has admitted that it has filed wrong amended Memo of Parties on 13.01.2023 and in para 12 of the application, it has submitted unconditional apology for the same. During the arguments, the Applicant reiterated its unconditional apology for submitting the wrong Memo of Parties in the main matter. Though it is a serious mistake on the part of the Applicant, we are not inclined to take any further action in the matter in view of the unconditional apology tendered by the IRP of the Applicant Company present personally.

In view of the averments made in the application and submissions made by the Ld. Counsel appearing for the IRP of the Applicant Company and IRP appearing in person, we hereby order that:

"The name of the corporate debtor in the order dated 13.01.2023 be read as "MANSFIELD POWER & INFRASTRUCTURE PRIVATE LIMITED" in place of "MANSFIELD CABLES COMPANY & INFRASTRUCTURE PRIVATE LIMITED".

I.A. No. 1184 & 1185 of 2023 in Company Appeal (AT) Insolvency No. 351 & 352 of 2023 -10-

The amended order is appended herewith.

IRP of the Corporate Debtor Mr. Vikram Bajaj having IBBI Registration No. IBBL/IPA-002/IP NO003/2016- 2017/10003 (Mob. No. 9999989408) (Email ID:

bajaj.vikram@gmail.com) is directed to take all necessary steps for the furtherance of CIRP of the Corporate Debtor, as per the corrected Memo of Parties and corrected name of the CD.

With this, the present application stands allowed."

8. The order dated 17.01.2023 was passed by the Adjudicating

Authority on I.A. No. 244 of 2023 which order dated 17.01.203 cannot be said

to be notice to "Mansfield Power & Infrastructure Pvt. Ltd.", the present

Corporate Debtor, since it was not on the record on the said date.

9. Learned counsel for the Appellant has also made various

submissions in support of the application including the submission that the

Operational Creditor "Mansfield Cable Company Ltd." and the Corporate

Debtor were controlled by one Mr. JPS Chadha. The Corporate Debtor was

transferred to the Appellant Group in the FY-2017-18 and the Operational

Creditor on the basis of bills raised on 05.11.2016 has filed Section 9

application. It is further submitted that balance confirmation was signed by

Ms. Manjeet Kaur Chadha on 11.04.2017 and was obtained for the purpose

of case. It is submitted that the Section 9 application is itself fraudulent

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initiation of insolvency and Section 65 proceeding should be initiated against

the Operational Creditor.

10. The law is well settled that limitation for filing Appeal shall

commence from the date when order is delivered or pronounced but present

is a case where order was passed against different Corporate Debtor namely

"Mansfield Cables Company & Infrastructure Pvt. Ltd.", which came to be

corrected on 17.01.2023 and order dated 17.01.2023 correcting the name of

the company was not in the knowledge of the present Corporate Debtor.

11. In the peculiar facts of the present case, we are of the view that the

Appellant is entitled to seek condonation of delay in filing the appeal which

according to the Appellant has been filed with delay of only six days. The

limitation can run against the Appellant when it is party to the proceeding

and order is passed against it whether ex-parte or after hearing the appellant.

Limitation shall commence in both from the passing of order either ex-parte

or after hearing the appellant. When order under Section 9 was not passed

against the company in question, we fail to see how limitation start running.

Appellant in his application has categorically stated that he came to know of

letter dated 18.01.2023 sent by the Resolution Professional which was

received on 06.02.2023. Resolution Professional in the reply does not deny

that he has not sent a letter. It is only stated that he has sent an email on

18.01.2023 to the Appellant.

12. We, in the peculiar circumstances of the present case where order

was not against the Corporate Debtor for initiating section 9 proceeding but

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a different company which was corrected subsequently, are satisfied that

sufficient cause has been shown for condonation of delay in filing the appeal.

We allow the delay condonation applications. List the Appeal for admission

on 28.04.2023.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) NEW DELHI

25th April, 2023

Archana

I.A. No. 1184 & 1185 of 2023 in Company Appeal (AT) Insolvency No. 351 & 352 of 2023