Tarur Raman Venugopal vs Orbit Towers Private Limited & Anr

Tarur Raman Venugopal ...Appellant

Versus

Orbit Towers Pvt. Ltd. & Anr. ...Respondents

Present: For Appellant: Mr. Mainak Bose, Mr. Neeraj Pandey, Mr. Shakeel Aktar and Mr. Dhruv Surana, Advocates.

For Respondents: Mr. Rahul Arya and Mr. Arun Pandiyan S., Advocates for R-1.

ORDER

14.11.2022: I.A. No. 3387 of 2022: By this I.A. Appellant has prayed

for condonation of delay in filing the Appeal. The order of the Adjudicating

Authority was passed on 27.06.2022 by which the Adjudicating Authority has

admitted the application filed by the Financial Creditor under Section 7.

Certified copy of the order dated 27.06.2022 was applied on 28.07.022 which

was prepared on 29.07.2022. Present Appeal has been filed by the Appellant

on 24.08.2022. The Appeal having been filed beyond the period of limitation

as well as beyond the period of 15 days which this Tribunal is empowered to

condone i.e. 45 days we are unable to accede to the prayer of condonation of

delay.

Cont'd.../ -2-

2. Learned counsel for the Appellant submits that Sub-Section (7) of

Section 7 requires the Adjudicating Authority to communicate the order of

admission. Section 7(7) is as follows:

"(7) The Adjudicating Authority shall communicate--

(a) the order under clause (a) of sub-section (5) to the financial creditor and the corporate debtor;

(b) the order under clause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be."

3. Section 7(7) which required Adjudicating Authority to communicate the

admission order in no manner affect the period of limitation provided in

Section 61 of the Code.

4. Learned counsel for the Appellant has also placed reliance on the

judgment of Hon'ble Supreme Court in "(2022) 3 SCC 161, E.S.

Krishnamurthy & Ors. vs. Bharath Hi-Tecch Builders Pvt. Ltd." at Para

30, which is as follows:

"30. Sub-Section (5) of Section 7 is comprised in two parts: Clause (a), which is the first part, empowers the Adjudicating Authority to admit the application where it is satisfied that: (i) a default has occurred; (ii) the application under sub-Section

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(2) is complete; and (iii) no disciplinary proceeding is pending against the proposed resolution professional; Clause (b), which is the second part, empowers the Adjudicating Authority to reject the application where it is satisfied that: (i) default has not occurred; or (ii) the application under sub-

Section (2) is incomplete; or (iii) a disciplinary proceeding is pending against the proposed resolution professional. Under sub-Section (7), the Adjudicating Authority has to communicate its order of acceptance or rejection to the financial creditor and the corporate debtor or the financial creditor, as the case may be. In accordance with sub-Section (6), the CIRP process commences from the date of the admission of the application under sub- Section (5). Thus, a time limit for the completion of the CIRP within a period of 180 days [under sub-Section (1) of Section 12, subject to a further extension under sub- Section (3)] commences from the date of the admission of the application to initiate the process."

5. The above judgment of the Hon'ble Supreme Court was not on Section

61 of the I&B Code, hence, may not help the Appellant in any manner.

6. The judgment of the Hon'ble Supreme Court which covers the field is

the judgment in "(2022) 2 SCC 244, V. Nagarajan vs. SKS Ispat & Power

Ltd. & Ors.". The Hon'ble Supreme Court in the above judgment had

occasion to consider the provision of Section 61. Learned counsel for the

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Appellant has referred to the conclusions at Para 33 of the judgment, which is

to the following effect:

"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 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

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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 Hon'ble Supreme Court in V. Nagarajan (Supra) has after noticing

the statutory scheme which was regulating filing of the Appeals under the

Companies Act, 2013 has observed that there is a conscious legislative change

in the words which have been used in Section 61 and receipt of the copy of the

order is no more relevant for computation of limitation for filing Appeal. The

judgment clearly indicate that period of 30 days limitation commences from

the date the order is pronounced. In Para 31 of the judgment following

observations have been made by the Hon'ble Supreme Court:

"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" 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

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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 1420 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 appeal25 as time-barred under Section 61(2) of the IBC since the appellant therein was present in court, and yet chose to file

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

8. We are of the view that the judgment of the Hon'ble Supreme Court in

V. Nagarajan (Supra) fully covers the issues which have been raised in the

present appeal. Appeal having been filed beyond 45 days delay, we are unable

to condone delay in filing the appeal. Consequently, Delay Condonation

Application is dismissed. Memo of Appeal is also rejected.

[[Justice Ashok Bhushan] Chairperson

[Dr. Alok Srivastava] Member (Technical)

[Barun Mitra] Member (Technical) Archana/nn

Company Appeal (AT) (Insolvency) No. 1134 of 2022