TaxTMI 
TaxTMI 
2024 (8) TMI 1694
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....y Code, 2016, whereby the Appellant has given the challenge to the Impugned Order of 01.05.2023, as it has been passed by the Learned Adjudicating Authority on IA No.503/2023 as preferred in CP(IB) No.28/7/HDB/2022, which is said to be an order passed under Subsection (1) of Section 31 of the I & B Code, thereby consequently approving the Resolution Plan. This matter was heard at length and all the Counsels for the Parties have addressed their respective cases on merits and ultimately upon consideration of their arguments, the question which has emerged for consideration is as to whether the Company Appeal would be barred by limitation or not. Initially, when the Appeal was preferred, the Appellant did not file the Delay Condonation Application but owing to the objection made by the Respondent's Counsel, we have passed an Order on 14.06.2024 which reads as under: - "14.06.2024: As against the impugned order of approval of Resolution Plan, under Section 31 the same is appealable under Section 32 of the Insolvency and Bankruptcy Code, 2016. It is argued by the Learned Counsel for the Appellant, that the Preliminary Objection taken by the Respondent that there is no ....
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....dependently but rather in correlation with the provisions contained under Subsection (3) of Section 61, which prescribes for the ground for the purposes of preferring of an Appeal under Section 32 of the I & B Code and as a consequence, the provisions of Section 61 and particularly that of Section 61(2) dealing with the aspect of limitation will come into play. Based on the aforesaid rival contentions the prime question which emerges for determination before this Appellate Tribunal is as to whether, when the Appellant himself has preferred the Appeal by invoking the provisions of Section 32 to be read with Section 61(3) of the I & B Code, whether the Appeal would be barred by limitation as laid down in Section 61(2) of the I & B Code, 2016. Before we dwell with the respective arguments extended by the Learned Counsels for the parties, the facts of the case need to be laid out, hereunder to facilitate the determination to be made by us on the aspect of limitation in this case. The brief facts which engage consideration in the Company Petition itself are the following: On 25.03.2010, the Appellant and Respondent No.1 had entered into a concession agreement by way of Package No.....
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....of the I & B Code to be read with Section 394 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016, in CP/28/7/HDB/2022 before NCLT Hyderabad, seeking approval of the Resolution Plan. The said Resolution Plan was approved by the National Company Law Tribunal, Hyderabad vide Order dated 01.05.2023. It is this order which has been subjected to the instant Appeal. The Appellant's Counsel contends that the instant Appeals falls within the ambit of Section 32 to be read with Section 61(3). He goes on to argue that in view of the simpliciter language used under Section 32 of the I & B Code, which reads as under: - "32. Appeal - Any appeal from an order approving the resolution plan shall be in the manner and on the grounds laid down in subsection 3 of section 61", The Appeal against the order of approval of the Resolution Plan under Subsection (1) of Section 31, is to be made under Section 32 of I & B Code, on the basis of the grounds available under Sub Section (3) of Section 61 and since the legislature consciously had not prescribed any period of limitation under Section 32, there is no delay in filing of the instant Appeal and that no independ....
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....rovided for in the resolution plan in the manner specified by the Board; (iv) the insolvency resolution process costs have not been provided for repayment in priority to all other debts; or (v) the resolution plan does not comply with any other criteria specified by the Board. (4) An appeal against a liquidation order passed under section 33 may be filed on grounds of material irregularity or fraud committed in relation to such a liquidation order", It can be observed that the provisions of Subsection (1) of Section 61 starts with a non-obstante clause and hence it has its independent existence providing thereof that, any person aggrieved by any order passed by the Learned Adjudicating Authority 'under this part' may prefer an Appeal to the NCLAT. The Counsel for the Respondent attempts to drive home the point that the use of the word, 'under this part' would obviously mean that since the provisions contained under Section 31(1) and the appellate provisions under Section 32 and Section 61, form to be part of the provisions contained under Chapter II, in that eventuality, the provision of Section 61 would be applicable in its entirety including those ca....
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....ereunder:- "49. Section 32 of the 'I & B Code' relates to 'grounds of appeal' against an order passed by the Adjudicating Authority approving the 'Resolution Plan' in the manner and the grounds laid down in sub-section (3) of Section 61, and reads as follows: 32. Appeal - Any appeal from an order approving the resolution plan shall be in the manner and on the grounds laid down in subsection 3 of section 61". The three-Judges Bench of the Principal Bench, NCLAT have further held vide Para 50 of the same Judgment that an Appeal under Section 32 of the I & B Code, as against the order passed by the Learned Adjudicating Authority approving the Resolution Plan, though it has been prescribed to be preferred in the manner and on the grounds laid down under Subsection (3) of Section 61 of I & B Code, would not be in exclusion to the provisions contained under Section 61(2). Para 50 of the said Judgment is extracted here under:- "50. From the aforesaid provision, it is clear that the grounds to prefer appeal under Section 61 of the 'I&B Code' against an order of approval of plan passed by the Adjudicating Authority under Section 31, should be such as mentioned ....
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....e clause and it is part and parcel of the principal statute and Part II thereof, the exercise of inherent powers under Rule 11 cannot be done for the purposes of doing away with the period of limitation prescribed under Section 61(2) of the Code for the delay which has chanced in preferring the Appeal. The Counsel for the Appellant has tried to convince us that the exercise of the inherent powers under Rule 11 of the Rules of 1961, is similar to the provisions contained under Section 151 in the CPC and hence can be exercised to overcome limitation laid down in Section 61(2) of the I & B Code. However, we need to keep in mind that the Hon'ble Apex Court has already dealt with this aspect, that is, the scope of exercise of powers under the saving clause of Section 151 of the Civil code of the procedure in the Judgment reported in (2010) Volume 8 SCC Page 1, Vinod Sethi Vs Devinder Bajaj and Another. In the said judgement, Hon'ble Apex Court has laid down as to up to what extent the latitude could be provided to the savings clause of Section 151 of CPC. The relevant paragraphs 28, 29, 30, 31 & 32 are extracted hereunder:- "28. As the provisions of the Code are not exhaustive,....
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.... the Code. Section 151 however is not intended to create a new procedure or any new right or obligation. 32. In Nain singh v. Koonwarjee this Court observed: (SCC p. 735, para 4)". The provision of Rule 11 has to be interpreted in a manner similar to the meaning assigned to section 151 of CPC by the Hon'ble Apex Court. The aforesaid conclusion arrived at by the Hon'ble Apex Court has clearly laid down that the inherent powers of the Court / Tribunal are in addition and not in exception to the powers specifically conferred on the Court / Tribunal by the I & B Code, and that they are complimentary in nature and they do not have any independent existence, as such, therefore in the instant case, when field of law is covered by the Principle statute, in relation to the aspect of limitation which already stands covered under the provisions contained under Section 61, as per the ruling of the Judgment of the Vinod Sethi supra, the provisions contained under Rule 11 of NCLAT Rules, is not to be exercised to override the provision of Section 61(2) of the Code to condone the delay chanced in filing of the Appeal preferred under Section 32 of the I & B Code. Therefore, the provisi....
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....or appeal against orders approving a resolution plan without a specified limitation period. This exception underscores the Legislature's clear intention to distinguish these appeals due to their unique nature. Notably, Section 61(1) commences with a non- obstante clause only regarding the Companies Act 2013, indicating that the IBC may establish different or no limitation periods for such appeals, further emphasizing the legislative intent to treat these appeals differently". Thus he claims that since section 61(3) of the Code does not refer to any limitation period, therefore no limitation is applicable for appeal filed under Section 32 of the Code, that Section 61(3) is a complete code laying down entire procedure for appeals from plan approval orders and that specific provision will prevail over the general provisions of Section 61(2). Another ground which has been taken by the Appellant is that the acts of fraud committed by the Resolution Professional prevented him from filing his appeal in time and therefore the delay ought to be condoned. He contends that, the RP deliberately concealed the fact of cancellation of deferment of Premium by NHAI from the resolution plan de....
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....ted Vs Anil Kohli, Resolution Professional for Dunar Foods Limited, Para 142, 155. These two Judgments deal with the exercise of powers of the Hon'ble Apex Court under Article 142 of the Constitution of India, for the purposes of Condonation of Delay. The Hon'ble Apex Court while dealing with the aforesaid impact of the Condonation of Delay had laid down in the matters of National Spot Exchange Limited Vs Anil Kohli, Resolution Professional for Dunar Foods Limited, Civil Appeal No.6187 of 2019, where it has been provided that, the period of limitation cannot even be condoned attracting the provisions contained under Article 142 of the Constitution of India. The relevant portion of Para 7 of the aforesaid Judgment as rendered in the Comp App (AT) (Ins) No.1127/2023 in the matters of Yogesh Bosmiya Vs Om Prakash Agarwal & Ors., is extracted hereunder: - "7. No doubt that the Appellant has a right to file an Appeal for which a period of 30 days has been prescribed but it also true that beyond the period of 15 days, the limitation cannot be extended even by this Court as it does not have the jurisdiction. In this respect, regard may be had to the decision of the Hon'ble Suprem....
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....t is settled law that IBC is a complete code in itself with Sections 238 and 238-A of IBC providing for overriding effect on the provisions contained in the Limitation Act 10. IBC by virtue of being a special statute, this Tribunal is not empowered to condone any delay beyond the statutory prescriptions in the IBC containing a provision for limitation. This legal precept has been squarely laid down by the Hon'ble Supreme Court and for this purpose we may refer to the judgment of the Hon'ble Supreme Court in "Kalpraj Dharamshi vs Kotak Investment Advisors Ltd (2021) 10 SCC 401" wherein it has been noticed that IBC being a special statute, for the purposes of calculating the period of limitation to file an appeal, the governing section shall be Section 61 of the IBC. The relevant excerpts of this order is as extracted below: "53. Since there is a period different from the one which is prescribed by the Schedule to the Limitation Act, the limitation for an appeal would be governed by Section 43 61 of the I & B Code, which is a special statute. As such, an appeal will have to be preferred within the period of thirty days from the date on which the order was passed by ....
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....t to file an appeal. In terms of Section 9 of the Civil Procedure Code, 1908, there is an inherent right to bring a suit of a civil nature, unless the suit is barred by statute. On the other hand, an appeal is a creature of statute and must have the clear authority of law. 13IBC envisages a comprehensive dispute resolution process in Chapter VI. NCLT is the empowered "adjudicating authority" under Section 6o IBC with the jurisdiction to entertain any proceeding in relation to insolvency resolution of liquidation proceedings under IBC. An appeal lies against an order of the adjudicating authority to the appellate authority, NCLAT, under Section 61(1) IBC. An order of NCLAT is subject to an appeal on a question of law to the Supreme Court under Section 62. The jurisdiction of civil courts has been explicitly ousted by Section 63 IBC. 16. In the present case, the appellant was aggrieved by an order3of NCLT passed under IBC. His right to file an appeal arose from Section 61 IBC which is in the following terms: "61. Appeals and appellate authority.-(1) Notwithstanding anything to the contrary contained under the Companies Act, 2013, any person aggrieved by the order of....
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....es have to be followed for the purposes of determining the period of limitation prescribed, for preferring of an Appeal under Section 31 of I & B Code. (2) The Appellant himself has preferred an Appeal titling it to under Section 32 to be read with Section 61(3), meaning thereby, the Appeal thus preferred by the Appellant is not independent to the provisions contained under Section 32 when the appeal has been jointly preferred under Section 61. Given the nature of Section 61 which starts with a non-obstante clause, the provisions of Section 61 would have to be applicable in its entirety, not in piece meal. One has to keep in mind that when the I & B Code was formulated, necessity was felt to create an effective legal framework for timely resolution of the Insolvency and Bankruptcy proceedings which could support reduction of Corporate Sector Litigation and encourage entrepreneurship. The basic SOR of the I & B Code was, to consolidate and amend the laws relating to the Insolvency Resolution in respect of corporate entities, partnership firms and individuals so as maximize the value of assets of such persons and to promote entrepreneurship. In particular, emphasis has been ....