NCLAT rejects 209-day delayed appeal, denies condonation under Section 61(2) citing M.P. Steel Corporation precedent

Srigopal Choudhary Versus Srei Equipment Finance Limited

Srigopal Choudhary Versus Srei Equipment Finance Limited - TMI Issues Involved:

1. Condonation of delay in filing the appeal.
2. Applicability of Section 14 of the Limitation Act, 1963.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:

The appellant filed IA No. 2256 of 2024, seeking condonation of a 209-day delay in filing the appeal against the order dated 07.06.2023. The appeal was e-filed on 12.01.2024. The appellant argued that the delay should be condoned as they were bona fide prosecuting another proceeding (IA No. 3216/2023) for the recall of the order dated 07.06.2023 under Rule 49 of the NCLT Rules, 2016. This application was rejected on 12.12.2023, and the subsequent appeal was dismissed on 03.01.2024. The appellant sought exclusion of the period from 08.06.2023 to 03.01.2024 under Section 14 of the Limitation Act, 1963.

2. Applicability of Section 14 of the Limitation Act, 1963:

The core issue was whether the period from 08.06.2023 to 03.01.2024 should be excluded under Section 14 of the Limitation Act, which provides for the exclusion of time spent in bona fide proceedings in a court that lacked jurisdiction or was unable to entertain the case due to a similar cause. The appellant argued that they prosecuted the application in good faith and due diligence.

The respondent countered that the application for recall of the order was maintainable under Rule 49 of the NCLT Rules and was decided on merits, thus not meeting the criteria for exclusion under Section 14.

The tribunal examined the conditions for applying Section 14, as laid out by the Supreme Court in Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department and Ors. (2008) 7 SCC 169. The conditions include:

1. Both proceedings must be civil proceedings prosecuted by the same party.
2. The prior proceeding must have been prosecuted with due diligence and in good faith.
3. The failure of the prior proceeding must be due to a defect of jurisdiction or other similar cause.
4. Both proceedings must relate to the same matter in issue.
5. Both proceedings must be in a court.

The tribunal noted that the application for recall (IA No. 3216/2023) was decided on merits and did not suffer from a defect of jurisdiction or other similar cause. The tribunal referred to its previous judgment in SREI Equipment Finance Limited vs. Kalpataru Properties Pvt. Ltd., where it was held that the benefit of Section 14 could not be extended if the prior proceeding was decided on merits and did not suffer from a jurisdictional defect.

The tribunal also considered the Supreme Court's judgment in N. Mohan vs. R. Madhu, where the delay was condoned based on the appellant's bona fide actions and substantial deposits made. However, this case was distinguished as it did not involve the application of Section 14.

The tribunal concluded that the appellant did not satisfy the conditions for applying Section 14, particularly the requirement that the prior proceeding failed due to a defect of jurisdiction or other similar cause. Consequently, the benefit of Section 14 could not be extended to the appellant.

Conclusion:

The tribunal rejected the application for condonation of delay (IA No. 2256 of 2024) and dismissed the memorandum of appeal due to the delay being beyond the condonable period of 15 days. The appeal was dismissed with no order as to costs.