2025 (1) TMI 954 - AT - IBC

E-filing date determines limitation period for appeals, not refiling date after curing defects under Regulation 16A(3A)

NCLAT condoned a 1-day delay in filing appeal, accepting that bulky documents caused the delay. The tribunal held that e-filing date determines limitation ... Seeking condonation of 1 day delay in filing the Appeal - applicant contends that the ground taken in the Application is that due to bulky and voluminous nature of documents delay was caused - HELD THAT:- The issue which is sought to be raised in the present Appeal by Learned Counsel for the Respondent was considered by this Tribunal in the matter of Innovators Cleantech Pvt. Ltd. Vs. Pasari Multi Projects Pvt. Ltd. [2024 (8) TMI 211 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI]. This Tribunal in the aforesaid Judgment has held that as per Rule 22 of National Company Law Appellate Tribunal Rules, 2016 and Orders issued by this Tribunal on 21.10.2022 and 24.12.2022, the date of e-filing has to be treated as date for calculation of the limitation. It was further noticed that the date of refiling after curing the defects cannot be treated to be date of filing of the Appeal for purposes of computation of limitation and date of e-filing cannot be treated to be fresh date of filing of the Appeal. For purposes of computation of limitation, the date of e-filing of the Appeal which is 24.08.2024 has to be treated the date for purposes of computing the limitation. 30 days period after 24.07.2024, having expired on 23.08.2024, there is a delay of only 1 day in filing of the Appeal - there are sufficient cause in the grounds taken in the Application for condonation of 1 day delay. The delay of 1 day in filing the Appeal is condoned. Replacement of the Authorised Representative of the homebuyers - HELD THAT:- When a procedure for replacement of the Authorised Representatives have been introduced in the Regulations by 16A(3A) inserted on 18.09.2023, the said statutory provision has to be followed for replacement of Authorised Representatives. Adjudicating Authority did not commit any error in relying on the Regulation 16A(3A) of the CIRP Regulations for not accepting the Application of the Appellant. Conclusion - The delay in filing the appeal was condoned. The application for replacement of the Authorised Representative was dismissed. The court declined to exercise inherent powers absent compelling evidence. Thus, no case has been made out to interfere with the impugned Order - appeal dismissed. 1. ISSUES PRESENTED and CONSIDEREDThe legal judgment presents the following core issues:Whether the delay of one day in filing the appeal should be condoned.Whether the application for replacement of the Authorised Representative of the homebuyers is maintainable.Whether the Adjudicating Authority has the inherent power to replace the Authorised Representative despite the procedural requirements outlined in Regulation 16A(3A) of the CIRP Regulations.Whether the actions and decisions of the Authorised Representative were in accordance with the interests of the homebuyers.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Condonation of DelayRelevant legal framework and precedents: The appeal was filed with a delay of one day beyond the prescribed 30-day period. The appellant sought condonation citing the voluminous nature of documents.Court's interpretation and reasoning: The court considered the date of e-filing as the relevant date for calculating the limitation period, as per Rule 22 of the National Company Law Appellate Tribunal Rules, 2016.Key evidence and findings: The appeal was e-filed on 24.08.2024, with the period expiring on 23.08.2024, resulting in a one-day delay.Application of law to facts: The court found that the delay was minimal and justified the condonation based on procedural fairness.Treatment of competing arguments: The respondent argued that the appeal was non-est due to procedural defects, but the court found the initial e-filing was supported by an affidavit.Conclusions: The delay of one day was condoned, allowing the appeal to proceed.Issue 2: Replacement of the Authorised RepresentativeRelevant legal framework and precedents: Section 25A of the IBC Code and Regulation 16A(3A) of the CIRP Regulations govern the appointment and replacement of Authorised Representatives.Court's interpretation and reasoning: The court emphasized that the Authorised Representative acts based on prior instructions from the financial creditors and that a single homebuyer cannot unilaterally seek replacement.Key evidence and findings: The Authorised Representative was appointed following due process, and the majority of homebuyers had approved the Resolution Plan.Application of law to facts: The court applied Regulation 16A(3A), which requires a request from at least 10% of creditors in a class for replacement, a threshold not met by the appellant.Treatment of competing arguments: The appellant argued for inherent powers of the Adjudicating Authority to replace the representative, but the court found no grounds for such intervention.Conclusions: The application for replacement was dismissed, and the existing Authorised Representative was upheld.Issue 3: Inherent Power of the Adjudicating AuthorityRelevant legal framework and precedents: The court referenced precedents where inherent powers were used to replace Resolution Professionals under specific circumstances.Court's interpretation and reasoning: The court distinguished between the roles of Resolution Professionals and Authorised Representatives, noting that inherent powers should be used sparingly.Key evidence and findings: The court found no compelling evidence of misconduct by the Authorised Representative warranting replacement.Application of law to facts: The court concluded that procedural regulations must be followed unless exceptional circumstances justify deviation.Treatment of competing arguments: The appellant's reliance on inherent powers was rejected due to lack of evidence of misconduct.Conclusions: The court upheld the procedural framework and dismissed the application for replacement.3. SIGNIFICANT HOLDINGSPreserve verbatim quotes of crucial legal reasoning: 'The date of refiling after curing the defects cannot be treated to be the date of filing of the Appeal for purposes of computation of limitation.'Core principles established: The court reaffirmed the procedural requirements for filing appeals and replacing Authorised Representatives, emphasizing adherence to statutory frameworks.Final determinations on each issue: The delay in filing the appeal was condoned; the application for replacement of the Authorised Representative was dismissed; and the court declined to exercise inherent powers absent compelling evidence.The judgment underscores the importance of procedural compliance in insolvency proceedings and the limited role of inherent powers in altering established processes. The decision reflects a balance between procedural rigor and fairness in adjudicating appeals and applications within the insolvency framework.