2022 (12) TMI 607 - AT - Insolvency and Bankruptcy

Appeals Dismissed: Timely Filing Key

Vipras ADZ And Others Versus Mr. Sundaresan Nagarajan, RCC e-Construct Private Limited And Others

The appeals challenging the Resolution Plan in the case involving M/s P Dot G Constructions Pvt. Ltd. were dismissed by the Appellate Tribunal due to ... Condonation of delay in filing of appeal - Period of limitation - CIRP - fairness of ‘Resolution Plan’ - providing meagre settlement money to the ‘Appellants’ for examples- only 1.5% to the ‘Operational Creditors’ of their claims - non-initiation of the cases by the ‘Resolution Professional’ for the fraudulent, preferential, avoidance and extortionate transactions. - HELD THAT:- It cannot be the case of the ‘Appellants’ that, despite being ‘Parties’ and in knowledge of pronouncement of the ‘Order’, by the ‘Adjudicating Authority’, they have chosen not to be pro-active in obtaining the required documents including, ‘Certified Copy of the Order’, to file the ‘Appeal’, before this ‘Appellate Tribunal’. This ‘Appellate Tribunal’, therefore, comes to an irrefutable and purposive conclusion that the ‘Appellants’, fail to meet the requirements of limitations, as stipulated in I & B Code, 2016. Hence, these ‘Appeals’, are dismissed on the ‘point of Limitation’. Issues Involved:1. Fairness of the Resolution Plan and meager settlement to Operational Creditors.2. Non-initiation of cases by the Resolution Professional for fraudulent, preferential, avoidance, and extortionate transactions.3. Challenge to the undervalued Liquidation Value and Resolution Plan amount being lower than the Liquidation Value.4. Exorbitant interest charges by Financial Creditors.5. Wrong dealing with the aspects of Security Interest claimed by Financial Creditors.6. Limitation period for filing the appeals.Issue-wise Detailed Analysis:1. Fairness of the Resolution Plan and Meager Settlement to Operational Creditors:The appellants, who are various Operational Creditors of M/s P Dot G Constructions Pvt. Ltd., challenged the Resolution Plan approved by the Adjudicating Authority. They argued that the plan provided insufficient settlement of their claims, specifically mentioning that only 1.5% of their claims were settled. The appellants contended that the Resolution Plan was unfair and did not adequately compensate them for their claims.2. Non-initiation of Cases by the Resolution Professional for Fraudulent, Preferential, Avoidance, and Extortionate Transactions:The appellants raised concerns that the Resolution Professional did not initiate necessary cases for fraudulent, preferential, avoidance, and extortionate transactions. They argued that such inaction compromised the integrity of the Corporate Insolvency Resolution Process (CIRP) and adversely affected their interests.3. Challenge to the Undervalued Liquidation Value and Resolution Plan Amount Being Lower than the Liquidation Value:The appellants challenged the undervalued Liquidation Value and argued that the Resolution Plan amount was lower than the Liquidation Value. They contended that this discrepancy was detrimental to their interests and did not comply with the provisions of the Insolvency and Bankruptcy Code, 2016 (I&B Code, 2016).4. Exorbitant Interest Charges by Financial Creditors:The appellants also raised the issue of exorbitant interest charges claimed by the Financial Creditors. They argued that such charges were unreasonable and inflated the claims of the Financial Creditors, thereby reducing the amount available for distribution to the Operational Creditors.5. Wrong Dealing with the Aspects of Security Interest Claimed by Financial Creditors:The appellants contended that the Resolution Plan wrongly dealt with the aspects of Security Interest claimed by the Financial Creditors. They argued that the plan favored the Financial Creditors at the expense of the Operational Creditors, leading to an inequitable distribution of the resolution proceeds.6. Limitation Period for Filing the Appeals:The appellants argued that the appeals were filed within the limitation period as the certified copy of the impugned order was delivered to them on 03.02.2020, and the appeal was filed on 02.03.2020. However, the respondents contended that the appeals were barred by limitation as they failed to meet the requirements stipulated in Section 61(2) of the I&B Code, 2016.The Appellate Tribunal examined the issue of limitation, which is crucial for the maintainability of the appeals. It referred to Section 61(2) of the I&B Code, 2016, which requires an appeal to be filed within 30 days before the Appellate Tribunal, with a possible extension of 15 days for sufficient cause. The Tribunal also considered relevant provisions from the Companies Act, 2013, and judgments from the Supreme Court, including V. Nagarajan vs. SKS Ispat and Power Limited and Ors. (2022) 2 SCC, which emphasized the importance of timely filing of appeals and the responsibility of the aggrieved party to obtain a certified copy of the order promptly.The Tribunal concluded that the appellants failed to meet the limitation requirements as stipulated in the I&B Code, 2016. The impugned order was pronounced on 13.12.2019, and the period of 30 days expired on 12.01.2020. Even with a 15-day extension, the limitation period would have expired on 27.01.2020. The appeals were filed beyond this period, and the Tribunal dismissed the appeals on the ground of limitation.Separate Judgment for Innova Homebuyer Neyveli Association:The Innova Homebuyer Neyveli Association filed an appeal with a delay of around 15 days. The Tribunal noted that the appeal was filed on 27.01.2020, beyond the outer limit of 45 days (30 days + 15 days extension). The Tribunal emphasized that it had no power to condone the delay beyond the prescribed period and dismissed the appeal on the ground of limitation.Conclusion:The appeals were dismissed on the ground of limitation, and the Tribunal did not traverse into the merits of the matter. The connected pending Interlocutory Applications were also closed.