2023 (9) TMI 82 - AT - Insolvency and Bankruptcy

Tribunal grants appeal delay, upholds liquidator's decision, dismisses appeal without costs.

The tribunal granted condonation of delay in filing an appeal due to the counsel's illness and tribunal closure, allowing the appeal to proceed without ... Maintainability of claims during liquidation - rejection of claim by liquidator - rights to execute arbitral award - condonation of delay - time-bound liquidation processCondonation of delay - Condonation of 12 days' delay in filing the Company Appeal (AT) (CH) (Ins) No.274 of 2023. - HELD THAT: - The Tribunal considered the appellant's explanation that the learned counsel was incapacitated by fever during the relevant period and that registry/tribunal timings (summer holidays) contributed to the delay. Having regard to the mode of filing (e filing), the explanation furnished and taking a lenient and liberal approach, the Tribunal exercised its discretion in favour of the appellant and condoned the delay of 12 days in filing the appeal. The IA for condonation was allowed without costs. [Paras 5]IA No.846 of 2023 is allowed and the delay of 12 days in preferring the appeal is condoned.Maintainability of claims during liquidation - rejection of claim by liquidator - rights to execute arbitral award - time-bound liquidation process - Whether the Adjudicating Authority was correct in upholding the liquidator's rejection of the appellant's claim and in concluding that the claim could not be allowed as part of the liquidation process. - HELD THAT: - The Tribunal examined the impugned order of the Adjudicating Authority which had upheld the Official Liquidator's rejection of the appellant's claim, noting the pendency of arbitration proceedings. The Tribunal observed the earlier pronouncement in Company Appeal (AT)(Ins) No.28 of 2022 that, if arbitration proceedings result in an award in favour of the appellant, the appellant remains free to pursue remedies available in law and the impugned order would not obstruct execution of any arbitral award. Applying that precedent and considering the facts, the Tribunal found that the Adjudicating Authority, mindful of the time-bound liquidation process, was justified in endorsing the liquidator's decision. The Tribunal concluded that the liquidation proceedings did not operate to extinguish the appellant's rights to pursue and execute any future arbitral award, but on the facts before it the rejection of the claim in the liquidation was sustainable and the appeal lacked merit. [Paras 17, 18, 19, 20]The impugned order dated 25.05.2023 upholding the liquidator's rejection of the appellant's claim is affirmed; the Company Appeal is dismissed.Final Conclusion: The Tribunal condoned the delay in filing the appeal and, on the merits, affirmed the Adjudicating Authority's upholding of the liquidator's rejection of the appellant's claim while observing that the appellant remains free to pursue and execute any future arbitral award; the appeal is dismissed and connected IAs are closed. Issues involved:The issues involved in the judgment are the condonation of delay in filing an appeal and the legal infirmities in the impugned order regarding termination of a contract and arbitration proceedings.Condonation of Delay Issue:The appellant sought condonation of delay in filing an appeal due to the counsel's illness and confusion regarding the appropriate tribunal. The delay of 12 days was attributed to the counsel's illness and the tribunal's closure for summer holidays. The tribunal, considering the circumstances, extended judicial leniency and allowed the appeal to proceed without costs.Termination of Contract and Arbitration Issue:The appellant, an interstate transmission licensee, entered into contracts for a transmission project. Due to delays by the consortium, the appellant terminated the contract and initiated arbitration proceedings. The appellant contended that the adjudicating authority erred in dismissing their application despite pending arbitration proceedings. The appellant argued that the termination of the contract should be subject to the arbitration outcome and that the liquidation proceedings should not extinguish pending claims. The tribunal reviewed the impugned order and concluded that the liquidator's rejection of the appellant's claim was appropriate, considering the time-bound nature of liquidation. The tribunal found the appeal devoid of merits and dismissed it without costs.Separate Judgment:No separate judgment was delivered by the judges in this case.