TaxTMI 
TaxTMI 
2024 (12) TMI 1525
X X X X Extracts X X X X
X X X X Extracts X X X X
....sels for both parties, we dwell upon to render the Judgment in these appeals independently. In fact, both the appeals are structured on the same foundation, and each of the appeals if decided in either fashion, will have a direct bearing on one another. Hence, for the purposes of brevity, we feel it apt to, answer the arguments extended by the Ld. Senior Counsel for the Appellant in Company Appeal (AT) (CH) (Ins) No.193/2022, first before we factually dwell upon the argument factually extended by the Ld. Senior Counsel for the Appellant in the connected appeal. Company Appeal (AT) (CH) (Ins) No.193/2022: As far as the Company Appeal (AT) (CH) (Ins) No.193/2022 is concerned, the challenge as given by the Appellant is to the Impugned Order of 04.03.2022, as it was rendered in CP (IB) No. 71/9/AMR/2020. The consequential effect of the Impugned Order of 04.03.2022, was that the Corporate Debtor (i.e, M/s. PI Data Centers Private Limited) was admitted to face the CIRP proceedings. The propriety of the Impugned Order of 04.03.2022, of admission of the Corporate Debtor into CIRP proceedings may not be required to be gone into, by us at this stage, for the reason being that this a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the exemption of limitation, in the light of the provisions contained under Section 14 of the Limitation Act. Owing to the aforesaid arguments, it becomes inevitable for us that before assigning any reasons as to whether at all Section 14 of the Limitation Act, would be attracted, under the given set of circumstances, to extract as to what Section 14 of the Limitation Act intends at. Section 14 of Limitation Act is extracted hereunder: - "14. Exclusion of time of proceeding bona fide in court without jurisdiction.-(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng forum or a forum that does not have jurisdiction to principally deal with the matter which is placed before it, and then upon its conclusion it is ultimately arrived at, then the proceedings are not maintainable, and the party to the proceedings is relegated back to the approach to an appropriate forum, statutorily available to him under law, it is only in that eventuality, Section 14 of Limitation Act comes into play, provided the litigation is done in good faith and not otherwise, when proceedings are intra-court miscellaneous proceedings. In the instant case, the decision to file the application, being IA No. 30/2022 for the relief claimed, was admittedly not an application, that was filed before the wrong forum, and it cannot be a case of the Appellant too, because it was rather his application, which he has chosen to file, before the Ld. Adjudicating Authority by way of interlocutory application, for the relief sought therein. Even otherwise also, the said application IA No. 30/2022, which has been decided by the Ld. Adjudicating Authority, by the order of 28.04.2022, is not a proceeding, which is independent in itself, rather it was an ancillary miscellaneous proceeding....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich is strict in its applicability and has been made not extendable beyond the time period prescribed in it, which is a self-contained provision. Section 61 (2) deals with an aspect of limitation which is extracted hereunder: - "61(2) Every appeal under sub-section (1) shall be filed within thirty days before the National Company Law Appellate Tribunal: Provided that the National Company Law Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days." The language of the statute in itself is quite explicit in itself, where it contemplates and it is mandatory too, that the aspect of limitation under Section 61 (2), would be applicable for the appeals contemplated under Section 61 (1) meaning thereby, yet again an answer to the applicability of general law of limitation, has been self-contained in the appellate provision of Section 61 itself, where Sub-Section 2 which exclusively carves out an aspect of limitation is exclusive in nature in its applicability to the appeals prescribed under Section 61....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nciples laid down therein would be available to KIAL for exclusion of the period during which it was prosecuting the writ petition before the Division Bench of the Bombay High Court." "97. In the present case, the facts are totally contrary. KIAL had approached the High Court of Bombay making a specific grievance, that NCLT had adopted a procedure which was in breach of the principles of natural justice. It is specifically mentioned in the writ petition, that though an alternate remedy was available to it, it was approaching the High Court since the issue with regard to functioning of NCLT also fell for consideration. The proceedings before the High Court were hotly contested and by an elaborate judgment, the High Court dismissed [Kotak Investment Advisors Ltd. v. Krishna Chamadia, 2020 SCC OnLine Bom 197] the writ petition relegating the petitioner therein i.e. KIAL to an alternate remedy available in law. It is thus apparently clear, that KIAL was bona fide prosecuting a remedy before the High Court in good faith and with due diligence. In a given case, the High Court could have exercised jurisdiction under Article 226 of the Constitution inasmuch as, the grievance was r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ect matter of challenge, which were decided on 28.11.2019 by the Ld. NCLT, Mumbai, in MA No. 1039 & 691 of 2019, and Ld. NCLT has set aside the said orders which were passed in the said MAs, which was the subject matter of consideration under Section 62 before the Hon'ble Apex Court. The civil appeal which was preferred, was against the order of the Ld. NCLT which has rejected the interlocutory application pending before the Tribunal. If we have reference to the contents of para 49, it only formulates the question, which emanates for consideration in the said case of Kalpraj Dharamshi (Supra), which does not have its universal applicability. The question which has been formulated therein, was to the effect as to whether the appeals filed by the Kotak Investment Advisors Limited before the Ld. NCLAT was within the period of limitation. It is to be noted that, this question formulated, that was dealing with an aspect of a limitation in respect to the said case only. The second question which, was the subject matter of consideration was the question of waiver in the context of determination of limitation. While referring to para 50, which has been argued by the Ld. Senior Counsel f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of dealing with an aspect of limitation, when the law itself very strictly creates a restriction on the Appellate Tribunal that while determining the aspect of limitation, we cannot barge upon, and extend the period beyond which is prescribed under the proviso to Section 61 (2). The implications of the aforesaid Judgment of Kalpraj Dharamshi (Supra) in the context of the observation, which has been made in Para 97, which has been pressed upon by the Ld. Senior Counsel for the Appellant is that, it was the situation where the parties to the proceeding had approached to the Hon'ble High Court, which was a forum other than the appropriate forum available under the provisions of the I & B Code. There in that situation, the Hon'ble Apex Court, has taken a view by way of an exception, that Section 14 could be made applicable, but here it is reiterated that since the forum of pendency of proceedings is not a question of dispute, the only dispute which is being sought to be carved out is because of the filing of an interlocutory application which was filed before the Competent Court. The circumstances under which the reasons have been assigned in Para 97 of the said Judgment, would no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rred by the Appellant before the Ld. Adjudicating Authority on 15.03.2022. The relief sought, in the said application would be of much more relevant in the context of dealing with the authorities, which he intended to rely upon in support of his case while pressing upon the Company Appeal (AT) (CH) (Ins) No.192/2022. The Applicant in the said application IA No. 30/2022, has prayed for, the following relief: - "In view of the abovementioned facts and submissions, the Hon'ble Adjudicating Authority may be pleased to grant the following reliefs: (a) To direct the respondents to file application for withdrawal of the CIRP proceedings under Section 12A of the IBC read with Regulation 30A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 on account of the discharge of the whole of the claimed outstanding debt to the Operational Creditor by the Applicant and/or, (b) To permit the withdrawal of the application admitted under Section 9 of the IBC and set aside the CIRP process and restore the Board of Directors with full powers to operate the company as existing with the Board prior to the initiation of CIRP. (c) To p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rred to by the Ld. Senior Counsel for the Appellant contending thereof that, since owing to the various e-mail communications, which itself amounts to be an admission made by the Applicant to Section 9 application, that the amount has been remitted which is a fact denied hence disputed, and as such no purpose would be served to pursue the application under Section 9 of I & B Code. He has drawn the attention of this Tribunal to a number of e-mail communications and particularly while dealing with the chain of these email communications, we refer to one of the communications, which has been relied upon by the Ld. Senior Counsel for the Appellant i.e., an e-mail communication dated 11.03.2022. In accordance with the e-mail communication, it has been projected by the Ld. Senior Counsel for the Appellant that as if, the entire amount which was due to be paid by the appellant to respondent, applicant to Section 9 application, stands settled upon the receipt of, the dues by the operational creditor and an observation which has been made therein, that it will ensured that IA under Section 12A would be filed immediately and would make all efforts to place the same before the Tribunal for it....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of 11.03.2022, since all these documents they happen to commensurate to be of the same date that would justify the e-mail communication of 11.03.2022, where it is contended that the Applicant/Respondent was expected to withdraw the proceedings under Section 9 of I & B Code, by filing an application Form-FA, under Regulation 30A of IBBI Regulation of 2016. The Ld. Counsel for the Respondent, while responding to the said argument as it was extended by the Ld. Senior Counsel for the Appellant, in the context of the alleged Debt Settlement Agreement, has denied the factum of having placed the signatures on the said document and its executory too. The Ld. Senior Counsel for the Respondent, he has drawn the attention of this Appellate Tribunal to the Debt Settlement Agreement itself, while referring to Para 1 and 2, with regards to the alleged transaction and remittance of money along with the interest, which he contends to have been paid to the Operational Creditor which has been acknowledged by his receipt of the payment, which would necessitate the institution of the Form-FA, under Regulation 30A for the purposes of withdrawing the proceedings under Section 9 of I & B Code. In the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the Hon'ble Apex Court in the aforesaid judgments, which has been referred to by the Ld. Senior Counsel for the Appellant. In a similar manner where the Ld. Senior Counsel for the Appellant has referred to the certificate of the receipt of the amount issued by the ICCI bank on 17.03.2022, he once again referred to yet another certification issued by the branch Code 03607 dated 17.03.2022, of State Bank of India, which too, he contends has fortified the fact about the transfer of the amount based upon the Debt Settlement Agreement, which has been referred to for the purpose of transaction, which has been read by the Ld. Senior Counsel for the Appellant to be in relation to the proceedings of the CP (IB) No. 71/9/AMR/2020. The Ld. Senior Counsel for the Appellant, submits that despite of having paid the entire amount, to the full satisfaction of the amount as it was claimed to be payable in the demand notice under Section 8 of I & B Code, he was taken aback when he was in the receipt of the communication made on 12.03.2022, where it is alleged that respondents have contended that, the Respondents had made a communication to the effect, that he was in receipt of, only a part....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enior Counsel for the Appellant had referred to catena of Judgments, where based under its strength he submits that the Hon'ble Apex Court has the held, while interpreting the implication of Section 60, that, the implication of Section 60 could always been expanded to an extent to enable an Applicant to withdraw a proceedings drawn under Section 7 or 9 of I & B Code, withdrawal of application was made open to the Applicant, under the light of a stretch of powers conferred under Section 60 of I & B Code. The Ld. Senior Counsel for the Appellant for the aforesaid purpose by referring to the Judgment as reported in 2019, volume 4, SCC page 17, Swiss Ribbons Pvt. Ltd. and Another vs Union Of India and Others, has drawn the attention of this Tribunal to, the observations, which has been made therein in Para 81, while dealing with the power of withdrawal of an application as contemplated under Regulation 30 by an applicant to it, by filing of an application for withdrawal under Section 12A. He submitted that the Hon'ble Apex Court in Para 81 of the Judgment of Swiss Ribbons Pvt. Ltd (Supra) has observed that the Regulation 30 (A)(1) is not mandatory, but rather it is directory in natu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be submitted to the interim resolution professional or the resolution professional, as the case may be, in Form FA of the Schedule before issue of invitation for expression of interest under Regulation 36-A. (2) The application in sub-regulation (1) shall be accompanied by a bank guarantee towards estimated cost incurred for purposes of clauses (c) and (d) of Regulation 31 till the date of application. (3) The committee shall consider the application made under sub-regulation (1) within seven days of its constitution or seven days of receipt of the application, whichever is later. (4) Where the application is approved by the committee with ninety per cent voting share, the resolution professional shall submit the application under sub-regulation (1) to the adjudicating authority on behalf of the applicant, within three days of such approval. (5) The adjudicating authority may, by order, approve the application submitted under sub-regulation (4)." This Court, by its order dated 14-12-2018 in Brilliant Alloys (P) Ltd. v. S. Rajagopal [Brilliant Alloys (P) Ltd. v. S. Rajagopal, 2018 SCC OnLine SC 3154] , has stated that Regulation 30-A(1) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Code. For all these reasons, we are of the view that Section 12-A also passes constitutional muster." But in answer to it, we are of the view that in fact in all these paragraphs which has been relied by the Appellant, and has been referred to, by the Ld. Senior Counsel for the Appellant it only contemplates a choice of withdrawal by master of the proceedings drawn by him, but it doesn't anywhere contemplate forcing a withdrawal of proceedings upon an Applicant and that too by soliciting a judicial order. Hence Regulation 30, to be read with Section 60 of I & B Code cannot be read so preposterously to force upon an Applicant to the proceedings under Section 7 or 9 of I & B Code, who intends to continue with the proceedings, to force withdrawal of the same as the same would run contrary to the very mandate of Article 21 of the Constitution of India. As there cannot be a judicial deprivation by orders of court of a right of a citizen of the country covered under Article 5 of the constitution of India to force to withdraw his recourse to judicial remedies, which is given and protected under the law of land. The Ld. Senior Counsel for the Appellant had referred to yet....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sue, with regards to the consolidation of a pre-existing fragmented insolvency framework and with regards to the errosion or the debt recovery by the individual or an entity, as dealt with in sub Para C and the interest of the Corporate Debtor must be detached from those of its promoters with all humility at a command. We are in absolute disagreement with the Ld. Senior Counsel for the Appellant, regards the ratio propounded by him, in the applicability of this Judgement in support of his continuation to sustain his IA No. 30/2022, as the judgement of GLAS Trust Company LLC, it was yet again based upon a different facts and preposition, and the controversy which was subject matter of consideration therein before the Hon'ble Apex Court, was arising from the Judgment of the Ld. NCLAT which was under consideration it was, emanating from the application instituted under Section 9 of I & B Code, where the applicant to the proceedings himself sought to withdraw the proceedings, which is otherwise here in this appeal where the Appellant seeks a judicial direction against Respondent to withdraw his case. While exercising powers under Rule 11, the Ld. NCLAT has approved the settlement of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts, (8) discharge port, (9) discharge rate with international shipping acronyms, (10) demurrage rate, (11) period of shipment, (12) vessel details, (13) draft (port/berth capacity corresponding to height of cargo), (14) stipulations as to survey by independent surveyors, (15) quality benchmark, (16) bonus/penalty rates, and (17) applicable laws (Indian law) and arbitration." "47. The minute to minute correspondence exchanged between the parties, all the conditions prescribed which had been laid down, awareness of urgency of accepting the offer without any further delay to avoid variation in the freight or other factors, coupled with the e-mail sent on 16-10-2007 at 3.06 p.m. under the subject "re: offer for imported bauxite" stated in unequivocal terms i.e. "we confirm the deal for five shipments", would clearly go to show that after understanding all the details and the confirmation by the respondent, the petitioner sent a reply stating that "thanks for the confirmation, just in time to go to the shipowners". All the above details clearly establish that both the parties were aware of various conditions and understood the terms and finally the charter party was entered int....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onvey an unconditional acceptance which was readily done through his e-mail sent at 3.06 p.m. with the words "we confirm the deal for five shipments", which is unconditional and unqualified. As rightly pointed out by the learned Senior Counsel for the petitioner, the respondent was wholly aware of the fact that its agreement with the petitioner was interconnected with the shipowner. In other words, once the offer of the petitioner was accepted following a very strict time schedule, the respondent could not escape from the obligations that flowed from such an action." First of all, we feel it apt to clarify at this stage itself, that those were the proceedings as engaged consideration in the said case was governed under the Arbitration and Conciliation Act of 1996 and they were not the proceedings which were under the I & B Code which is distinct and independent altogether in its applicability. The Ld. Senior Counsel for the Appellant has referred to Para 13 of the Judgment which too is extracted hereunder: - "13. It is the categorical claim of the petitioner that a commercial offer containing an arbitration clause conveyed through e-mail dated 15-10-2007 for the supply ....