2026 (6) TMI 940

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....2017 (hereinafter referred to as the said Act), on the ground of limitation despite the petitioner having paid the mandatory pre-deposit under Section 107(6) and having demonstrated sufficient cause for delay. (i). Whether the initiation and continuation of garnishee / recovery proceeding during pendency of appeal is sustainable in law. (ii). A further question arises as to whether the First Appellate Authority has been justified in refusing to condone the delay when sufficient cause has been shown and the statutory pre-deposit stood satisfied. 2. The petitioner submits that an order under Section 173 of the said Act has been passed by the adjudicating authority on 27.02.2025. The said Order has been communicated only t....

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....amely, the failure of the Chartered Accountant to communicate the order. Sufficient cause for delay has been demonstrated in the reply to the show cause notice dated 02.09.2025. 8. It is submitted that once the mandatory pre-deposit under Section 107(6) stands satisfied and the amount has been debited, the appeal ought to be entertained on merits. 9. The dismissal of the appeal solely on the ground of limitation without considering sufficient cause and the substantial compliance, defeats the very purpose of the appellate remedy under the statute. The petitioner relies upon Section 142B of the said Act and submits that intimation for recovery under Section 79 is required to be issued within 7 days. The recovery effected prior to proper....

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....deposit of Rs. 14,58,320/- and filed the appeal on 01.09.2025. The amount of the Rs. 74, 00,000/- has already been recovered from the petitioner' bank account through garnishee proceeding. 16. The dismissal of the appeal solely on the ground of limitation without considering the sufficient cause shown and the substantial compliance which section 107(6), amounts to a hyper technical approach. When the mandatory pre deposit stands satisfied and recovery has already been affected, the appellate remedy cannot be rendered illusory. 17. To balance the equities and to secure the ends of justice, this court is of the view that the interference is warranted at this stage. The delay in preferring the appeal deserves to be condoned. The initiati....