Rugby Renergy Pvt. Ltd vs Srei Equipment Finance Limited

In the matter of: Rugby Renergy Pvt. Ltd. Regd. Off. H. No. 53, Friends Colony (East), New Delhi- 110065 Email ID: registrardel@thelawpoint.com ...Appellant

Versus

1. SREI Equipment Finance Limited, Vishwakarma, 86C, Topsia Road, Kolkata, WB-700046 Registered Email ID: secretarial.sefl@srei.com; sefl@srei.com

2. Mr. Rajneesh Sharma, Registration No.: IBBI/RBI/99993 Erstwhile Administrator of FSP Current Administrator & Chairman of the Implementation and Monitoring Committee (IMC), Address: Vishwakarma 86C, Topsia Road (South), Kolkata, West Bengal-700046 Email ID: sreiadministrator@srei.com ...Respondents

Present :

For Appellant/ : Mr. Abhishek Puri, Ms. Surbhi Gupta, Mr. Sahil Grewal, Applicant Advocates.

For Respondent: Mr. Sanjiv Sen, Sr. Advocate with Mr. Arijit Mazumdar, Mr. Shambo Nandi, Mr. Anoushka Dey, Ms. Anjali Singh, Mr. Pragyan Mishra and Mr. Bhaskar Anand, Advocates. ORDER

(Hybrid Mode)

Per: Barun Mitra, Member (Technical)

I.A. No. 4327 of 2024 is an application praying for condonation of 185

days delay in refiling of the Appeal. Also, another I.A. No. 4515 of 2024 has

been filed seeking condonation of delay of 15 days in the filing of the present

Appeal.

2. Notice was issued in respect of the above IAs 4327 and 4515 of 2024 by

this Tribunal vide order dated 12.07.2024 which reads as under:

" Issue notice on the Delay Condonation Application as well as Application for re-filing delay. Learned Counsel for the Respondents appears and is allowed two weeks' time to file reply to the applications. Two weeks for rejoinder.

2. List the matter on 22.08.2024."

3. For the present, we propose to deal with IA No 4327 of 2024. In their

application, the Applicant has given the following explanation in Paragraphs

4 & 8 to 11 of the application justifying the refiling delay which is as

reproduced below:

"4. It is submitted that in the present matter an Arbitration Petition under Section 11 of the Arbitration and Conciliation Act, 1996, bearing no. Arb. P. 485/2023 and a Petition under Section 9 of the Arbitration and Conciliation Act, 1996 bearing no. O.M.P (I) COMM 6112023 had been filed by the Appellant herein prior to the Appeal and the proceedings with respect to the same were pending before the Hon'ble Delhi High Court. It is submitted that in the said proceedings, the Respondent had raised certain Page 2 of 8 I.A. No. 4327, 4515 of 2024 in Company Appeal (AT) (Insolvency) No. 1266 of 2024 issues regarding subsistence of existing contracts post resolution plan and the same were being adjudicated upon by the Hon'ble Delhi High Court. The adjudication of the said issues had a material bearing on the subject matter of the present Appeal.

Hence, to bonafidely avoid multiple/ contrary judgments on the said issues by different Courts/ Forums, the Appeal could not be re-filed.

.....

8. It is submitted that the Appellant upon receipt of order dated 03.05.2024 passed by Hon'ble Delhi High Court and order dated 01.06.2024 passed by Ld. Sole Arbitrator, has promptly proceeded to process the present Appeal and started removing the defects for refiling the same.

9. It is further submitted that due to the ongoing court vacations, the offices of the counsels of the Appellant are not working in full capacity and the defect list contains various defects including regarding certain pages not being clear I illegible. Hence, typing of the said pages, correcting the index, re-pagination and re- scanning the pages of the Appeal for the purposes of refiling the same has taken some time.

10. Accordingly, after re-scanning the signed copy of the Appeal, the same has been e-filed after removing all objections. Since the offices are not fully staffed due to the ongoing court vacations, the preparation of the paper sets of the appeal also took some time.

11. It is submitted that the delay in re-filing is on account of the aforementioned reasons alone. Hence, the condonation of delay is re-filing is sought on account of these bonafide and inadvertent reasons."

4. Reply has also been filed by the Respondent to the Refiling Delay

Application of the Applicant. The Ld. Sr. Counsel for the Respondent opposing

the submissions of the Applicant has made the following pleadings in

paragraphs 6 to 8 of their Reply as under:

Page 3 of 8

I.A. No. 4327, 4515 of 2024 in Company Appeal (AT) (Insolvency) No. 1266 of 2024 "6. The argument of the Appellant that proceedings were pending before the Hon'ble Delhi High Court and hence to avoid conflicting decisions, the appeal was not refiled cannot be accepted at all. The Respondent submits that if at all there was possibility of any conflicting decisions, the right course for the Appellant was to get the Appeal listed and then pray for a deferral of hearing of the appeal and then it would be upto this Hon'ble Appellate Tribunal to take adjudicate such an issue.

7. Alternatively, if it is to be believed that there was a possibility of conflicting decisions, then the Learned Arbitrator who has been appointed by the Hon'ble High Court of Delhi should also await the decision of this Hon'ble Appellate Tribunal so that there are no conflicting decisions.

8. Furthermore, assuming without admitting that there was a possibility of any conflicting decisions, the Appellant could not have unilaterally decided to defer curing the defects in the instant Appeal. Allowing of such a course of action unilaterally by an Appellant without an Order from this Hon'ble Appellate Tribunal is dangerous and will lead to disastrous consequences with respect to laws of limitation and rules regarding timely curing of defects."

5. We have heard the rival contentions of both the parties and perused the

records carefully.

6. For better appreciation, we are outlining briefly the sequence of events

of the matter at hand. The present Applicant had filed I.A. No. 1149 of 2023

in CP (IB) No. 294 of 2021 before the Adjudicating Authority seeking directions

against the approval of the resolution plan of the Corporate Debtor as

approved by the Committee of Creditors ('CoC' in short). Subsequent to the

approval of the resolution plan by the Adjudicating Authority on 11.08.2023,

I.A. No. 1149 of 2023 was dismissed on 18.10.2023 as infructuous. The

Applicant thereafter filed the present appeal before this Tribunal on

Page 4 of 8 I.A. No. 4327, 4515 of 2024 in Company Appeal (AT) (Insolvency) No. 1266 of 2024 02.12.2023. The appeal was e-filed before the Registry of this Tribunal. After

due scrutiny, defects were intimated by the Registry on 11.12.2023. The

Applicant refiled the Memo of Appeal thereafter on 20.06.2024 after taking

nearly six months to cure the defects.

7. When we look at the explanation proffered by the Applicant behind delay

in refiling, we find that it has been submitted that since the proceedings under

Sections 9 and 11 of Arbitration and Conciliation Act, 1996, ('Arbitration Act'

in short) were pending between the parties before the Hon'ble High Court of

Delhi and the said adjudication would have material bearing on the subject

matter of the present appeal filed under IBC, hence, to avoid contrary

judgments, the present appeal had not been refiled. In addition, it has been

stated that the delay in curing the defects was also due to the ongoing court

vacations during which period the offices of the counsel of the Applicant was

not working in full strength.

8. The Ld. Sr. Counsel for the Respondent has however raised serious

objections to the grounds of delay pleaded by the Applicant. It was submitted

that the Applicant had initiated the arbitration proceedings in a malafide

manner despite being fully aware that the Corporate Debtor was admitted to

the rigours of Corporate Insolvency Resolution Process and moratorium

provisions under Section 14 of the IBC had already come into play putting a

bar on institution of suits/proceedings or continuation of pending

suits/proceedings. It has also been contended that even after filing IA No.

1149 of 2023, the Applicant never pressed the same for hearing by the

Page 5 of 8 I.A. No. 4327, 4515 of 2024 in Company Appeal (AT) (Insolvency) No. 1266 of 2024 Adjudicating Authority. Even after the Adjudicating Authority had approved

the resolution plan on 11.08.2023, the Applicant did not even challenge the

order approving the resolution plan. It was only after the dismissal of IA No

1149 of 2023 on 18.10.2023 that the Applicant filed the instant appeal but let

it lie in defects for an inordinately long time for no justifiable reasons.

9. In support of their contention that condonation of delay needs to be

substantiated with cogent grounds and buttressed by adequate and sufficient

reasons, the Ld. Sr. Counsel for the Respondent adverted reference to the

judgment of this Tribunal in Adisri Commercial Pvt. Ltd. V/s Reserve Bank

of India & Anr. in C.A.(AT)(Ins) No. 1293 & 1294 of 2022 wherein it has

been held as follows:

"18. Any question of delay condonation must go through deep and sufficient scrutiny in the context of the Code. The circumstances cited for condonation of delay in re-filing has to be in consonance with the aims and objects of the Code and not frustrate the scheme of the Code. The natural corollary that follows is that condonation of delay in re-filing is not available just for the asking. This Tribunal needs to be fully satisfied that the delay was unavoidable and the applicant was consistently diligent in pursuing the matter. The question of condoning any delay in re-filing would have to be considered in the context of the plausible explanation given to show that the delay was on account of reasons beyond the control of the applicant and could not be avoided despite all possible efforts by the applicant."

Strongly objecting to the request for condonation of delay in refiling, it was

asserted that valid reasons on the part of the Applicant were amiss in the

present case.

Page 6 of 8 I.A. No. 4327, 4515 of 2024 in Company Appeal (AT) (Insolvency) No. 1266 of 2024

10. Coming to our analysis, we have no doubts in our minds that the delay

in refiling can be condoned only if the Tribunal is satisfied that there is

reasonable and justifiable cause for not refiling the appeal on time. When we

look at the sequence of events, we find that the Appeal was e-filed on

02.12.2023 and defects were intimated soon thereafter by the Registry on

11.12.2023. When we peruse the defect list pointed out by the Registry, most

of the defects are minor in nature like lack of pagination, need of rescanning

of certain pages of the appeal, correction of index etc. The correction of such

defects was by no stretch of imagination of a time-consuming nature. The

defects which were indicated by the Registry clearly fell in the routine category

which were easily curable. The Applicant has also not indicated any

circumstance beyond his control which warranted 185 days to clear the

defects. Even the attribution of court vacations as a ground for delay does not

cut ice since duration of court vacations are never that long. Clearly therefore,

since the time of intimation of defects, the Applicant slept over the defects for

nearly six months. No earnest efforts were made by the Applicant to correct

the defects. It cannot be the unilateral prerogative of the Applicant to elect

when it chooses to cure the defects to get the matter listed. This shows that

the applicant was casual, callous and negligent in refiling the appeal. We are

of the considered view that from the conduct of the Applicant it becomes amply

clear that after filing the Appeal, the Applicant deliberately kept the appeal

petition in a state of suspended animation to suit their whims and

convenience. Such masterly inaction on the part of the Applicant does not

commend us. It cannot be the unilateral prerogative of the Applicant to elect Page 7 of 8 I.A. No. 4327, 4515 of 2024 in Company Appeal (AT) (Insolvency) No. 1266 of 2024 when it chooses to cure the defects. The Applicant cannot be given any

indulgence keeping in view that the IBC proceedings have stringent timelines

to be followed and the proceedings have to be concluded in a time-bound

manner.

11. We are thus of the considered view that sufficient ground has not been

made out for condonation of 185 days delay in refiling of the Appeal. The

refiling delay application is rejected. Having rejected this application, the I.A.

No. 4515 of 2024 seeking condonation of delay is also dismissed as

infructuous. Consequently, all other IAs, if any, as well as the Memo of Appeal

is rejected.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical)

Place: New Delhi Date: 25.09.2024

Harleen/Abdul

Page 8 of 8 I.A. No. 4327, 4515 of 2024 in Company Appeal (AT) (Insolvency) No. 1266 of 2024