2023 (12) TMI 1073 - AT - Insolvency and Bankruptcy

NCLAT rejects appeal delay condonation despite appellant's 85% voting share in creditors committee

The NCLAT dismissed an appeal seeking condonation of 15-day delay in filing. The appellant, holding 85% voting share in Committee of Creditors, was aware ... Seeking Condonation of Delay of 15 days in filing the Appeal - sufficient cause for delay present or not - Appellant had waited for the outcome of the Liquidation Application before filing the instant Appeal - HELD THAT:- The discretion lies with the Courts to distinguish between an ‘explanation’ and an ‘excuse’ and only then to exercise discretion to condone the delay. In the instant case, it is crystal clear that the Appellant was aware of the Impugned order on 10.08.2023 itself and the justification given that the Appellant had requested the Third Respondent/The erstwhile RP to apply for a certified copy of the Impugned Order since it was not a party to the proceedings is rejected as Rule 50 read with Clause 31 of the Schedule of Fees of the NCLAT Rules, 2016 provides for the Registry to send a certified copy of the final Order to the parties concerned free of cost and the certified copies may be made available with costs as per schedule of fees, in all cases. Hence, it is clear that the Appellant itself could have applied for a certified copy by making an Application with the requisite fee, therefore, the contention of the Appellant that it was a Third party to the proceedings, is of no relevance. The Hon’ble Supreme Court in the case of V NAGARAJAN VERSUS SKS ISPAT AND POWER LTD. & ORS. [2021 (10) TMI 941 - SUPREME COURT] addressed the issue of the commencement date of the period of limitation for filing an Appeal under Section 61 of the Code. In this aforenoted Judgment, the Hon’ble Supreme Court answered the question as to when the clock for calculating the limitation period would begin to run for Appeals filed under the Code and recorded the same in Paras 33 through 35, after taking into due consideration the provisions of Rule 22(2) of the NCLAT Rules, 2016, Section 12 of the Limitation Act, and Section 421 of the Companies Act holding that While it is true that the tribunals, and even this Court, may choose to exempt parties from compliance with this procedural requirement in the interest of substantial justice, as re-iterated in Rule 14 of the NCLAT Rules, the discretionary waiver does not act as an automatic exception where litigants make no efforts to pursue a timely resolution of their grievance. The appellant having failed to apply for a certified copy, rendered the appeal filed before the NCLAT as clearly barred by limitation. Neither the provisions of the NCLAT Rules, 2016 nor the Code bars the Appellant from filing an Appeal within the statutory limitation period provided for under Section 61(3) of the Code and requesting the erstwhile RP to seek a certified copy and awaiting the outcome of the Liquidation Application, further renders the argument of the Learned Counsel for the Appellant, that the delay may be condoned for the foregoing reasons, unsustainable - there are force in the contention of the Learned Senior Counsel for the First Respondent that the Appellant, having 85% of the voting share in the CoC of the Corporate Debtor, ought to have taken effective steps within the limitation period, which they have failed to do so. The reasons given by the Applicant/Appellant do not constitute ‘sufficient cause’ for the Appellant to have filed the Appeal on the 45th day - Appeal dismissed. Issues Involved:1. Condonation of Delay in Filing the Appeal.2. Validity of Reasons for Delay.3. Compliance with NCLAT Rules for Obtaining Certified Copies.4. Interpretation of Limitation Period under Section 61 of the Code.Summary:1. Condonation of Delay in Filing the Appeal:IA No. 1085/2023 was filed seeking condonation of a 15-day delay in filing the appeal against the Impugned Order dated 09.08.2023. The appeal was filed beyond the statutory period of 30+15 days as per Section 61 of the Code. The Appellant argued that the delay was due to awaiting the outcome of the Liquidation Application and the unavailability of a certified copy of the Impugned Order.2. Validity of Reasons for Delay:The Appellant contended that it was not a party to the original proceedings and thus did not apply for a certified copy of the order, relying instead on the Resolution Professional to obtain it. The Tribunal noted that the Appellant was aware of the Impugned Order on 10.08.2023 but did not file the appeal within the 30-day limitation period. The Tribunal emphasized that the Appellant's decision to wait for the Liquidation Order did not constitute a 'sufficient cause' for the delay.3. Compliance with NCLAT Rules for Obtaining Certified Copies:The Tribunal highlighted Rule 114 of the NCLAT Rules, which allows parties to inspect case records and obtain certified copies. It was noted that the Appellant, holding 85% voting share in the CoC, could have applied for a certified copy directly but failed to do so. The Tribunal rejected the Appellant's argument that it was a third party to the proceedings, emphasizing that the Appellant could have taken steps to obtain the certified copy independently.4. Interpretation of Limitation Period under Section 61 of the Code:The Tribunal referred to the Supreme Court judgment in V. Nagarajan vs. SKS Ispat & Power Limited, which clarified that the limitation period for appeals under the IBC begins from the date of pronouncement of the order. The Tribunal reiterated that the aggrieved party must exercise due diligence and apply for a certified copy upon pronouncement of the order. The Tribunal found that the Appellant's reasons for delay did not amount to a 'sufficient cause' as required under Section 61(2) of the Code.Conclusion:The Tribunal concluded that the Appellant failed to provide a valid or substantial reason for the delay. The application for condonation of delay (IA No. 1085/2023) was dismissed, and consequently, the appeal was also dismissed.