2025 (7) TMI 1896 - AT - IBC

Appeal dismissed for 175-176 day delay after appellant failed to cure filing defects and acted unfairly via writ

NCLAT dismissed the appeal for a 175-176 day delay, holding the appellant failed to rectify registry-noted defects and acted unfairly by obtaining an ... Dismissal of appeal on the ground of delay of 175 days - onus on the Appellant to rectify the defects within the time - defective presentation when defects pointed out by the Registry were not rectified - HELD THAT:- Looking to the modus operandi of the Appellant, it is clear that he was not fair to the court. It is a settled proposition of law as settled by the Hon'ble Apex Court, that a person who is not fair to the Court/Tribunal is not even required to be heard in the matter. Further, it is seen that the Appeal itself is suffering from the vices of 176 days delay in re-filing. The Appellant was neither fair to this Appellate Tribunal nor even to the Hon'ble High Court, because, he has filed the Appeal before this Tribunal on 02.09.2024 which was marked as defective. Immediately thereafter he filed a Writ Petition on 03.09.2024, without disclosing the true and correct facts and got an Interim Order on 03.09.2024 itself. Though the Registry of this Appellate as early as Tribunal has pointed out the defects and intimated to the Appellant on 04.09.2024, the defects have not been removed as the Appellant already succeeded in getting the Interim Order by the Hon'ble High Court which remained in operation till the Writ Petition was decided finally on 09.07.2025 meaning thereby the Appellant himself is responsible for not rectifying the defects and it is not the Tribunal who is to be blamed for not taking the Appeal at the earliest. Appeal dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether the Company Appeal was liable to be dismissed for delay in re-filing (175/176 days) and defective presentation when defects pointed out by the Registry were not rectified. 2. Whether pursuing concurrent remedies - filing an appeal before the Appellate Tribunal and a writ petition before the High Court without disclosing material facts - constitutes forum shopping and suppression of facts sufficient to warrant dismissal of the appeal. 3. Whether obtaining an interim order from the High Court by omitting disclosure of the pendency/defect status of the appeal before the Appellate Tribunal renders the appellant unfair to the court and disentitles the appellant to be heard. 4. Whether costs should be imposed for suppression of facts and forum shopping, and the appropriate measure of such costs. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Delay and defective re-filing: Legal framework The Tribunal considered the requirement that appeals must be filed and defects rectified within timelines prescribed by the Registry; unexplained and substantial delay in compliance may render an appeal liable to dismissal. The appellate process places an onus on the appellant to cure registry-noticed defects within the time allowed. Precedent Treatment The Court referred to the established principle that litigants must act promptly to rectify procedural defects and that inaction leading to long delays is a ground for denial of relief; such procedural default is a legitimate basis for dismissal. Interpretation and reasoning The Tribunal found that the appeal originally filed by the appellant was marked defective on 04.09.2024 and that the appellant failed to remedy those defects, leading to a re-filing only on 05.03.2025 with a delay of 175 days. The Tribunal treated the onus of rectification as resting on the appellant, not on the Registry or the Tribunal. The Court rejected any suggestion that listing delay or Tribunal fault excused the appellant's failure to comply with registry directions. Ratio vs. Obiter Ratio: Unexplained and substantial delay in re-filing or curing defects, when the appellant has been notified, constitutes a valid ground for dismissal of the appeal. Obiter: None beyond the immediate application. Conclusion The Tribunal held the appeal to be suffering from substantive procedural delay and defective presentation; that delay weighed against the appellant and formed part of the basis for dismissal (see cross-reference to Issues 2-3 regarding conduct). Issue 2 - Forum shopping and suppression of material facts: Legal framework The Tribunal applied principles prohibiting forum shopping and requiring full and candid disclosure of material facts to courts; deliberate concealment or misrepresentation of material circumstances amounts to unfairness to the court and may justify refusal to hear the party or dismissal of proceedings. Precedent Treatment The Court relied upon the settled proposition that a litigant who is not fair to the Court/Tribunal need not be afforded the benefit of hearing; such principle has been consistently recognized by higher courts as a protection of judicial process integrity. Interpretation and reasoning The Tribunal found that the appellant filed a writ petition before the High Court the day after filing the defective appeal and represented to the High Court that the appeal had not been listed and was causing prejudice, without disclosing that the appeal had been filed and was marked defective and that registry defects were intimated. The Tribunal characterized this as an attempt at forum shopping and as placing a distorted/false averment before the High Court to obtain interim relief. The Tribunal observed that the appellant, having obtained interim relief from the High Court, thereby had less incentive to rectify the appeal defects, demonstrating tactical use of concurrent proceedings. Ratio vs. Obiter Ratio: Pursuing concurrent remedies while concealing material facts and seeking to secure interim relief from another forum amounts to forum shopping and suppression, which can justify dismissal of the appeal. Obiter: The moral condemnation of such conduct as 'not fair to the court' informs sanctioning but is ancillary to the dispositive ratio. Conclusion The Tribunal concluded that the appellant engaged in forum shopping and suppression of material facts; such conduct disentitled the appellant to the Tribunal's consideration and supported dismissal of the appeal (cross-referenced to Issues 1 and 3 regarding delay and interim orders). Issue 3 - Effect of obtaining interim relief from another forum without disclosure: Legal framework The Tribunal considered the legal consequences when a party obtains interim orders from a court by nondisclosure of material facts relating to parallel proceedings; courts may treat such conduct as abuse of process and may deny relief or impose consequences including dismissal of proceedings before the forum where nondisclosure occurred. Precedent Treatment The Tribunal invoked the established rule that concealment of material facts to procure interim relief is impermissible and that appellate/tribunal processes will not be subverted by such conduct. Interpretation and reasoning The Tribunal reasoned that the appellant's obtaining of an interim order from the High Court on 03.09.2024, without disclosing the defective status and registry communications relating to the appeal filed on 02.09.2024, materially misled the High Court and insulated the appellant from rectifying defects before the Appellate Tribunal. The Tribunal held that it was the appellant's responsibility to disclose the pendency and status of parallel proceedings and that failure to do so amounted to unfairness and an abuse of process. Ratio vs. Obiter Ratio: Interim relief obtained by nondisclosure of the true circumstances of parallel proceedings is an abuse of process and may result in denial/dismissal of the concealed proceeding. Obiter: The Tribunal's censure of litigants who seek tactical advantages across fora reinforces the ratio but is not an independent legal ground. Conclusion The Tribunal held that the interim order procured by the appellant through nondisclosure was a decisive factor in refusing relief and contributed to dismissal, since the appellant's conduct prevented timely rectification of appeal defects and misled another judicial forum (cross-referenced to Issues 1-2). Issue 4 - Imposition of costs for suppression and forum shopping: Legal framework The Tribunal considered the discretionary power to impose costs as a remedial and deterrent measure where parties engage in conduct amounting to suppression of facts, forum shopping, or abuse of process; costs may be directed to a public fund as an appropriate sanction. Precedent Treatment The Tribunal applied recognized judicial practice that costs may be imposed to penalize counsel/parties for misconduct and to vindicate the integrity of judicial proceedings. Interpretation and reasoning Given the Tribunal's findings on delay, nondisclosure, and forum shopping, it exercised discretion to impose a monetary cost as a punitive and corrective measure. The Tribunal specified a quantifiable sum to be deposited in the Prime Minister's Relief Fund within one month, reflecting the gravity of the misconduct and the need for deterrence. Ratio vs. Obiter Ratio: Where a party has engaged in suppression of material facts and forum shopping, the Tribunal may dismiss the proceedings and impose costs payable to a public fund as an appropriate sanction. Obiter: The specific amount and choice of fund are discretionary and guided by case circumstances. Conclusion The Tribunal directed dismissal of the appeal for the cumulative reasons of unexplained delay, procedural default, forum shopping, and suppression of material facts, and imposed costs of Rs. 5 lakhs to be deposited in the Prime Minister's Relief Fund within one month as a sanction; this constitutes the operative outcome of the decision (cross-referenced to Issues 1-3).