2025 (3) TMI 908 - AT - IBC

NCLAT dismisses application for condoning 139-day delay in company appeal refiling due to insufficient explanations

KVD Windpark Social Welfare Association & Ors. Versus Consortium of Brij Kishore Trading & Sumit Kumar Khanna (SRA for KV Developers Pvt. Ltd.) & Anr.

KVD Windpark Social Welfare Association & Ors. Versus Consortium of Brij Kishore Trading & Sumit Kumar Khanna (SRA for KV Developers Pvt. Ltd.) & Anr. - ... ISSUES PRESENTED and CONSIDEREDThe core issue considered by the Tribunal was whether the delay of 139 days in refiling the Company Appeal (AT) (Insolvency) No. 2362 of 2024 should be condoned. The Tribunal examined the reasons provided by the Applicant for the delay and assessed whether these reasons constituted sufficient cause for condonation under the applicable legal framework.ISSUE-WISE DETAILED ANALYSISRelevant Legal Framework and PrecedentsThe legal framework governing the condonation of delay primarily revolves around demonstrating 'sufficient cause' for the delay. The Insolvency and Bankruptcy Code (IBC) emphasizes strict adherence to timelines to ensure the timely resolution of insolvency proceedings. The Tribunal considered whether the reasons provided by the Applicant met the threshold of 'sufficient cause' as established by precedents in similar cases.Court's Interpretation and ReasoningThe Tribunal scrutinized the explanations provided by the Applicant, particularly focusing on the claim that the delay was due to the unavailability of the Appellants for consultation and the time taken to obtain a certified copy of the impugned order. The Tribunal found these explanations to be inadequate and lacking in specificity. The reasoning provided was deemed 'airy and light-weighted' as it failed to substantiate why the Appellants were unavailable for such extended periods.Key Evidence and FindingsThe Applicant argued that the delay resulted from the need to coordinate among multiple homebuyers residing in different locations, the festive season closures, and the absence of legal counsel. However, the Tribunal noted that the Applicant did not provide concrete reasons for the unavailability of individual Appellants or why the certified copy of the order was not obtained promptly. The Tribunal found that nearly four months were unnecessarily spent in obtaining the certified copy, reflecting a 'casual disposition' towards the appeal process.Application of Law to FactsApplying the principle of 'sufficient cause,' the Tribunal determined that the Applicant's explanations did not justify the delay. The Tribunal emphasized that the IBC's strict timelines are crucial for the expeditious resolution of insolvency proceedings and that the Applicant's lack of diligence undermined these objectives. The Tribunal concluded that the reasons provided did not meet the legal standard required for condonation of delay.Treatment of Competing ArgumentsThe Respondent contended that the Applicant's explanations were unsubstantial and indicative of negligence. The Tribunal agreed with the Respondent, highlighting that the Applicant's reasons were insufficient to justify the prolonged delay. The Tribunal rejected the Applicant's reliance on court vacations as a valid excuse, noting that the holiday period was significantly shorter than the total delay.ConclusionsThe Tribunal concluded that the Applicant failed to demonstrate 'sufficient cause' for the 139-day delay in refiling the appeal. The explanations provided were deemed inadequate, and the Applicant's approach was characterized as negligent and lacking diligence.SIGNIFICANT HOLDINGSPreserve Verbatim Quotes of Crucial Legal ReasoningThe Tribunal stated, 'Such a lack-lustre, careless and negligent approach does not commend us especially in view of the fact that IBC prescribes strict time-lines in the completion of the CIRP proceedings.'Core Principles EstablishedThe judgment reinforces the principle that strict adherence to timelines is essential in insolvency proceedings under the IBC. The Tribunal underscored the importance of demonstrating 'sufficient cause' with concrete and plausible explanations to justify any delay in legal proceedings.Final Determinations on Each IssueThe Tribunal rejected the Application for condonation of delay, concluding that the Applicant did not provide sufficient grounds to justify the 139-day delay in refiling the appeal. Consequently, the Memo of Appeal was also rejected due to the dismissal of the condonation application.