TaxTMI 
TaxTMI 
2025 (8) TMI 1151
X X X X Extracts X X X X
X X X X Extracts X X X X
....online on 25.09.2023 and certain defects were raised by the Registry and communicated to him on 04.10.2023, however he could not remove those defects within the stipulated time due to logistical constraints and the defects could only be removed till 10.01.2024, whereon he has refiled the appeal and has also moved an application for condonation of delay supported by his affidavit. 4. It is further submitted that the delay which had occurred in refiling the appeal is neither intentional nor deliberate on the part of the appellant or his counsel and therefore, the same be condoned. 5. Ld. Counsel for the Respondent on the other hand submits that delay condonation application moved by the applicant is though supported by an affidavit, but no explanation of delay has been given either in the application or in the affidavit to justify the delay of 91 days and thus the delay has not been explained at all. 6. It is vehemently submitted that though the matter of condonation of delay, which has occurred in refiling of the appeal is necessarily between the appellant and the court (Appellate Tribunal) but in order to condone the same, sufficient and reasonable explanation must be give....
X X X X Extracts X X X X
X X X X Extracts X X X X
....moved by the appellant would reveal that the grounds which have been taken therein are that 'due to the actual delay occurred in the efforts of removing the defects were due to the logistical constraints and the same is not intentional or deliberate., We asked Ld. Counsel to clarify the stand taken by him on which he answered that he has filed the affidavit in support of the application. For convenience the relevant part of the application moved by the applicant/appellant for condonation of delay in refiling is reproduced, here under: 1. That in the abovementioned matter, I had submitted the appeal online on 25.09.2023. Thereupon in the pursuit of removing defects from the appeal as advised by the learned office of this Appellate Tribunal it took 91 days' till 10.01.2024 to remove the defects. 2. That this delay of 91 days is neither intentional nor deliberate on the part of the appellant or her counsel but due to the actual delay in the efforts of removing the defects due to the logistical constraints. 3. That this is the utmost humble pray that the refiling be allowed in the interest of the Natural justice. 12. Perusal of the aforesaid applicatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....all be entered below the date stamp and thereafter cause it to be sent for scrutiny. (2) If, on scrutiny, the appeal or document is found to be defective, such document shall, after notice to the party, be returned for compliance and if there is a failure to comply within seven days from the date of return, the same shall be placed before the Registrar who may pass appropriate orders. (3) The Registrar may for sufficient cause return the said document for rectification or amendment to the party filing the same, and for this purpose may allow to the party concerned such reasonable time as he may consider necessary or extend the time for compliance. (4) Where the party fails to take any step for the removal of the defect within the time fixed for the same, the Registrar may, for reasons to be recorded in writing, decline to register the appeal or pleading or document. Rule 11 and 14 of the NCLAT are also important and are also reproduced 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 such orders or give such directions as may be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has not at all explained the delay of 91 days occurred in refiling the appeal, even then this tribunal would be under an obligation to adopt a liberal approach and condone the delay even on insufficient grounds or on no grounds, in the guise of providing substantial justice by deciding the lis on merits. 19. It may also to be recalled that the delay condonation application moved in any other civil or criminal proceedings may not be equated with any such application moved in connection with the cases under Insolvency and bankruptcy Code, 2016. Perusal of various provisions of the Code would reveal that time is the essence of this Code. Let us have a glance on the scheme of the Code. Section 12 of the IBC provides as under : - "12. Time-limit for completion of insolvency resolution process. --(1) Subject to Sub-section (2), the corporate insolvency resolution process shall be completed within a period of one hundred and eighty days from the date of admission of the application to initiate such process. (2) The resolution professional shall file an application to the Adjudicating Authority to extend the period of the corporate insolvency resolution process beyo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 13. One of the important objectives of the Code is to bring the insolvency law in India under a single unified umbrella with the object of speeding up of the insolvency process. As per the data available with the World Bank in 2016, insolvency resolution in India took 4.3 years on an average, which was much higher when compared with the United Kingdom (1 year), USA (1.5 years) and South Africa (2 years). The World Bank's Ease of Doing Business Index, 2015, ranked India as country number 135 out of 190 countries on the ease of resolving insolvency based on various indicia. 16. At this stage, it is important to set out the important paragraphs contained in the report of the Bankruptcy Law Reforms Committee of November, 2015, as these excerpts give us a good insight into why the Code was enacted and the purpose for which it was enacted: Speed is of essence Speed is of essence for the working of the bankruptcy code, for two reasons. First, while the 'calm period' can help keep an organisation afloat, without the full clarity of ownership and control, significant decisions cannot be made. Without effective leadership, the firm will tend to atr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as to be read with the third proviso to Section 30(4), which states that the maximum period of 30 days mentioned in the second proviso is allowable as the only exception to the extension of the aforesaid period not being granted more than once. 71. What is important to note is that a consequence is provided, in the event that the said period ends either without receipt of a resolution plan or after rejection of a resolution plan Under Section 31. This consequence is provided by Section 33, which makes it clear that when either of these two contingencies occurs, the corporate debtor is required to be liquidated in the manner laid down in Chapter III. Section 12, construed in the light of the object sought to be achieved by the Code, and in the light of the consequence provided by Section 33, therefore, makes it clear that the periods previously mentioned are mandatory and cannot be extended. 72. In fact, even the literal language of Section 12(1) makes it clear that the provision must read as being mandatory. The expression "shall be completed" is used. Further, Sub-section (3) makes it clear that the duration of 180 days may be extended further "but not exceeding ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ressed assets of the corporate debtor must take place beyond which the corporate debtor is to be driven into liquidation." Thus the time period provided under Section 12 of the Code for completion of the CIRP, though was held directory but the importance of timely resolution and delay occurred in litigation was also highlighted. 23. In RPS Infrastructure Ltd. vs. Mukul Kumar and Ors., MANU/SC/1001/2023 Hon'ble Supreme Court emphasised the importance of time frame provided in the Code, in order to not entertaining a claim raised with delay, in following words: - "19. The second question is whether the delay in the filing of claim by the Appellant ought to have been condoned by Respondent No. 1. The IBC is a time bound process. There are, of course, certain circumstances in which the time can be increased. The question is whether the present case would fall within those parameters. The delay on the part of the Appellant is of 287 days. The Appellant is a commercial entity. That they were litigating against the Corporate Debtor is an undoubted fact. We believe that the Appellant ought to have been vigilant enough in the aforesaid circumstances to find out whether th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2022 passed in leading case Company Appeal (AT)(INS) No.780 of 2022, V.R.Ashok Rao & Ors. v TDT Copper Ltd and other connected cases, framed following two questions and answered same as under: - "(a) Whether the law laid down by this Tribunal in "Mr. Jitendra Virmani Vs. MRO-TEK Realty Ltd. & Ors" and three Member Bench Judgement in "Arul Muthu Kumaara Samy Vs. Registrar of Companies" that when the defect in appeal is cured and the Appeal is refiled before the Appellate Tribunal beyond seven days, the date of re- presentation of the Appeal shall be treated as a fresh Appeal, lays down correct law? (b) Whether the limitation prescribed for filing an Appeal before this Appellate Tribunal under Section 61 of Insolvency and Bankruptcy Code, 2016 or Section 421 of the Companies Act, 2013 shall also govern the period under which a defect in the Appeal is to be cured and this Appellate Tribunal shall have no jurisdiction to condone the delay in refiling/re-presentation if it is beyond the limitation prescribed in Section 61 of the IBC or Section 421 of the Companies Act, 2013. 10. Sub-rule (2) of Rule 26 contemplates that if, on scrutiny, the appeal or document ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... vs. Birla VXL Ltd., (1998) 3 RCR (Civil) 436" had also laid down that question of condonation of delay in refiling has to be considered from a different angle and view point as compared to consideration of condonation of delay in initial filing. Following observations have been made by the Delhi High Court in Para 7 of the judgment: "7. Notwithstanding which of the aforesaid Rules are applicable, the question of condensation of delay in refiling of an application has to be considered from a different angle and viewpoint as compared to consideration of condensation of delay in initial filing. The delay in refiling is not subject to the rigorous tests which are usually applied in excusing the delay in a petition filed under Section 5 of the Limitation Act (See Indian Statistical Institute Vs. M/s. Associated Builders and others AIR 1978 Supreme Court 335)." The five-member Bench also took into consideration the judgment of Hon'ble Delhi High Court passed in "Delhi Development Authority v. Durga Construction, 2013 (139) DRJ 133 [DB]", where the question of condonation of delay in refiling came for consideration and quoted following excerpts from it in paragraph no. 20 and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fects notified have been removed although with some delay, question to be considered is as to whether there was justifiable cause for delay or not. The time period allowed for removal of the defects is only directory. " 34. In view of the foregoing discussion, reasons and conclusions, we answer the two questions in following manner: (a) The law laid down by this Tribunal in "Mr. Jitendra Virmani Vs. MRO-TEK Realty Ltd. & Ors" and three Member Bench Judgment in "Arul Muthu Kumaara Samy Vs. Registrar of Companies" that when the defects in appeal are cured after seven days and the same is refiled, it shall be treated as a fresh Appeal, does not lay down a correct law. The re-presentation of appeal after expiry of a period of 7 days or after extended period shall not be a fresh filing and shall only be refiling/representation. (b) The limitation prescribed in filing an appeal under Section 61 of the Code or Section 421 of the Companies Act, 2013 shall not govern the period taken in an appeal for removal of the defects in refiling/re-presentation. Even if, there is a delay in refiling/re-presentation which is more than the period of limitation prescribed for filing an appeal un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ulation 12 (1) Within 7 days from the receipt of the claim T+21 Verification of claims received under regulation 12(2) T+97 Section 21(6-A) (b)/Regulation16-A Application for appointment of AR Within 2 days from verification of claims received under regulation 12(1) T+23 Regulation 17(1) Report certifying constitution of CoC T+23 Section 22(1)/Regulation 19(2) 1st meeting of the CoC Within 7 days of filing of the report certifying constitution of the CoC, but with five days' notice. T+30 Section 22 (2) Resolution to appoint RP by the CoC In the first meeting of the CoC T+30 Section 16(5) Appointment of RP On approval by the AA ..... Regulation 17(3) IRP performs the functions of RP till the RP is appointed. If RP is not appointed by 40th day of commencement T+40 Regulation 27 Appointment of valuer Within 7 days of appointment of RP, but not later than 47th day of commencement. T+47 Section 12(A)/Regulation 30-A Submission of application for withdrawal of application admitted Before issue of EoI W CoC to dispose of the application Within 7 da....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cial enactment and as discussed by us herein before, the time line provided in this Code is its life line and once this enactment is divested of its time line, the whole object of the Code would be frustrated and it would never achieve the object for which it came into existence. 28. Thus it is expected from this Appellate tribunal to adopt a liberal but cautious approach and assess the sufficiency of explanation put forth by the applicant for justifying delay of 91 days occurred in refiling the appeal without meticulously appreciating it on the touch stone of settled principles pertaining to condoning of delay under various other provisions of Limitation Act. We are of the view that even if utmost liberal approach is adopted by the Tribunal in dealing with such applications, the minimum expected from such applicant is that he at least must state some facts in his application, which if taken on their face value, without appreciating meticulously, must be sufficient to explain the delay caused in refiling and to show that the delay is not wilful or deliberate or at least these stated facts must show that the applicant was acting deligently. But where the applicant (As in this cas....