TaxTMI 
TaxTMI 
2022 (12) TMI 917
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....ates. For Respondents: Mr. Gopal Jain, Sr. Advocate with Mr. Vijayendra Pratap Singh, Ms. Vanya Chhabra, Ms. Diksha and Mr. Aditya Dhupar, Advocates for R-1. Mr. Arun Kathpalia, Sr. Advocate with Ms. Sayobani Basu, Mr. Aditya Kumar, Advocates for R-2. JUDGMENT [ Per: Barun Mitra, Member (Technical) ] The present appeal has been filed against the order dated 08.10.2021 (hereinafter referred to as "Impugned Order") passed by the Adjudicating Authority, National Company Law Tribunal, Kolkata Bench in CP No. 294/KB/2021 whereby application filed under Section 227 read with Section 239(2)(zk) of the Insolvency and Bankruptcy Code, 2016 ("Code" in short) by the Reserve Bank of India/appropriate regulator has been admitted thus bringing Srei Equipment Finance Limited ("SEFL" in short) under Corporate and Insolvency process('CIRP' in short). 2. The Learned Counsel for the Appellant has submitted that substantial injustice has been caused to SEFL and its shareholders by the impugned order passed ex-parte by the Adjudicating Authority whereby SEFL was admitted under Section 227 of the IBC without any notice having been served on SEFL or its promoters or shareholders as required under l....
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....ellant pointed out that NCLAT Rule 14 empowers the Appellate Tribunal on sufficient cause being shown, to exempt the parties from compliance with any requirement of the rules, as it may consider just and expedient, to render substantial justice. It was asserted that the above three grounds may be treated as sufficient cause to allow refiling of the present application even with the delays in the interest of rendering substantial justice. It was further stated that under Rule 11 of NCLAT Rules, this Tribunal is vested with inherent powers to make such orders or give such directions as may be necessary for meeting the ends of justice or to prevent abuse of the Appellate Tribunal and hence the same can also be readily invoked by this Tribunal in the present case. It was therefore argued that Rules 11 and 14 of NCLAT Rules are aimed at providing substantial justice and the Appellants for justified reasons are seeking relief thereunder. 6. The Learned Counsel for the Appellant further submitted that Rule 26(2) of the NCLAT Rules provides that if on scrutiny an application is found to be defective, the defects are required to be notified to the party for return, after due compliance wit....
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....of the Appellant, it was submitted that they did not provide details of how their functioning was so adversely affected by Covid pandemic that they needed such an inordinately long time in rectifying the filing defects, even beyond the period, which was otherwise to complete within seven days as per NCLAT Rules. It has also been contended that in the absence of documentary support, the ill-health of the authorized representative is not a genuine excuse and in any case he could have easily been substituted. It was also pointed out that the plea taken by the Appellant that the relevant files of the appeal got misplaced lacks details and fails to indicate what efforts were taken to obtain a copy of the filed appeal from the Registry of this Tribunal. Hence the Appellant cannot be allowed to take of advantage of the NCLAT Rules for their carelessness and negligence. 9. Arguing that 321 days taken by the Appellant in refiling the appeal is almost the same time which is prescribed for completing CIRP under the IBC, the Learned Counsel for the Respondents vehemently asserted that any condonation of refiling delay of over 300 days would undermine the time-bound nature of CIRP under the Co....
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....es delineated above are inextricably intertwined and therefore we feel that it would be prudent to treat them together. Coming to the first issue, the Appellant's contention is that the NCLAT Rules empowers this Tribunal, in the interest of justice, to allow refiling of the application even if there is substantial delay so long as sufficient cause is shown. Further, it was argued that the Respondent being in the nature of a public authority, it should not obstruct the path of justice by raising technical pleas of refiling delay to defeat legitimate claims of the Appellant. In support of their contention several judgments of the Hon'ble Apex Court were cited including Madras Port Trust Vs. Hymanshu International (1979) 4 SCC 176, Urban Improvement Trust, Bikaner v. Mohan Lal, (2010) 1 SCC 512 and Rajendra Shankar Shukla v. State of Chhattisgarh, (2015) 10 SCC 400. 14. It may be useful to go through the relevant NCLAT rules which have been pointed out by the Learned Counsel for the Appellant in this regard as extracted hereunder:- "Rule 11: Inherent powers.- Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Appellate Tribunal to make su....
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....evolence shown in condoning delay in refiling would run counter to the intention of the Code and this aspect cannot be lost sight of. 17. That time is of essence in CIRP proceedings has also been reiterated in several judgments of the Hon'ble Supreme Court. The Hon'ble Apex Court in V. Nagarajan v. SKS lspat and Power Ltd. And Others (2022 2 SCC 244) has held: "25. The law on limitation with respect to IBC is settled and emphatic in its denunciation of delays. The power to condone delay is tightly circumscribed and conditional upon showing sufficient cause, even within the period of delay which is capable of being condoned. IBC is a watershed legislation which seeks to overhaul the previous bankruptcy regime which was afflicted by delays and indefinite legal proceedings. IBC sought to structure and streamline the entire process of insolvency, right from the initiation of insolvency to liquidation, as a one-stop mechanism." It was also pressed upon by the Learned Counsel for the Respondent that the Hon'ble Supreme Court in Ebix Singapore Private Limited v. Committee of Creditors of Educomp Solutions Limited & Anr., 2022 2 SCC 401 has held that in the light of the prescribed time....
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....Appellant company, we are not convinced of this ground to be a good enough for condonation of delay. 20. The second ground that has been raised is that because of limited functioning on account of the third wave of Covid, the defects could not be rectified on time. We tend to agree with the Respondents that if the applicant could have filed the appeal in the midst of the ongoing pandemic, it does not stand to reason why they could not remove the defects in a timely manner and re-file the appeals. That the applicant after getting notice for curing defects did not even bother to enquire any further from the Registry about their application for months together is deprecatory. If the applicant does not take any interest in pursuing his own application within a reasonable time, it does tantamount to sheer negligence. After being grossly callous on his own part, the Appellant can neither claim negative discrimination nor be entitled to blame the Respondents for denying them justice by pressing technicalities of refiling delay. This Tribunal has been given a latitude of a maximum of 15 days and not a day more for allowing condonation of delay beyond the statutory period of 30 days for fi....