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 of the impugned order on 10.08.2023 but waited for liquidation application outcome before filing appeal. The tribunal rejected appellant's justification that it requested a third party to obtain certified copy, noting NCLAT Rules permit direct application with requisite fee. Citing Supreme Court precedent, the tribunal held that discretionary waiver of procedural requirements doesn't create automatic exception for parties making no timely efforts. The appellant's failure to apply for certified copy within statutory limitation period under Section 61(3) of the Code rendered the appeal time-barred, with insufficient cause shown for delay.

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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.

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