2021 (12) TMI 909 - AT - Insolvency and Bankruptcy

Appeal Dismissed: Lack of Diligence & Good Faith in Meeting Time Bar.

The tribunal dismissed the application for condonation of delay, ruling that the appellants failed to demonstrate due diligence and good faith in ... Condonation of delay in filing appeal - there was 89 days delay in filing the Instant Appeal - Section 14 of the Limitation Act, 1963 - HELD THAT:- The Appellant had knowledge that the Appeal lies under Section 61 of the I& BC and further the Impugned Order was passed on 13.12.2019 and the Appellate Tribunal was open as per Calendar year 2019. So, they were having sufficient time to file this Appeal before this Tribunal and there is no merit in the I.A. No. 1590 of 2020. The Appeal is dismissed without costs. Issues Involved:1. Application under Section 14 of the Limitation Act, 1963 for condonation of delay.2. Maintainability of the appeal under Section 61 of the IBC.3. Good faith and due diligence in prosecuting the writ petition before the Bombay High Court.4. Exclusion of time spent in pursuing the writ petition under Section 14 of the Limitation Act, 1963.Issue-Wise Detailed Analysis:1. Application under Section 14 of the Limitation Act, 1963 for condonation of delay:The appellant filed an interlocutory application seeking condonation of an 89-day delay in filing the appeal. The delay was attributed to the time spent pursuing a writ petition before the Bombay High Court. The appellant argued that the delay should be excluded under Section 14 of the Limitation Act, 1963, which allows for the exclusion of time spent in good faith in a court without jurisdiction.2. Maintainability of the appeal under Section 61 of the IBC:The respondents opposed the application, arguing that the appeal was ex-facie barred by limitation. Section 61 of the IBC mandates that an appeal must be filed within 30 days, with a possible extension of an additional 15 days if sufficient cause is shown. The respondents contended that the appeal was filed beyond this permissible period and thus was not maintainable.3. Good faith and due diligence in prosecuting the writ petition before the Bombay High Court:The respondents further argued that the appellants did not demonstrate 'due diligence' and 'good faith' in prosecuting the writ petition. They pointed out that the appellants were aware of their right to appeal before the NCLAT but chose to move the Bombay High Court instead. This was evidenced by a letter dated 19.12.2019, where the appellants falsely stated that they had already preferred an appeal before the NCLAT. The respondents claimed this was done to obstruct the liquidator's duties.4. Exclusion of time spent in pursuing the writ petition under Section 14 of the Limitation Act, 1963:The respondents contended that the appellants did not prosecute the writ petition with due diligence and good faith, as required under Section 14 of the Limitation Act, 1963. They highlighted that the Bombay High Court had refused to grant any ad-interim relief and that the appellants had ample opportunity to file the appeal after the winter vacations of the NCLAT ended on 1st January 2020. The respondents also noted that the appellants did not move for urgent circulation of the writ petition after the order dated 20.12.2019, exposing their negligent attitude.Judgment:The tribunal found that the appellants had knowledge that the appeal lay under Section 61 of the IBC and had sufficient time to file the appeal before the NCLAT. The tribunal noted that the appellants' claim that the tribunal was closed due to winter vacations was incorrect, as they had more than 7 days in 2019 and sufficient time in 2020 to file the appeal. Consequently, the tribunal dismissed the application for condonation of delay, stating that there was no merit in the interlocutory application. The appeal and all pending interlocutory applications were dismissed without costs. The registry was directed to upload the judgment on the tribunal's website and send a copy to the National Company Law Tribunal, Mumbai Bench.