TMI Blog2024 (3) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of 30 days prescribed for filing the appeal had expired on 10.07.2022 and a further period of 15 days had also expired on 25.07.2022 but these appeals have been filed without annexing the certified copy of the impugned order and the certified copies of the impugned order were applied much after the expiry of period of 45 days - HELD THAT:- It has been found from the resume of the facts that four appeals have been filed within a period of 30 days, six appeals have been filed within the extended period of 15 days alongwith the application for condonation of delay which are yet to be decided and all these ten appeals have been filed with applications for seeking exemption from filing certified copy of the impugned order whereas three appeals have been filed without seeking exemption from filing certified copy of the impugned order which can be granted under Rule 14 of the Rules. In all these appeals, the certified copies have been obtained after the expiry of 30 days/45 days but the fact remains that the application for seeking exemption is yet to be disposed of and this Tribunal has the jurisdiction to grant the exemption for the compliance of the Rules though on a sufficient c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kar, Mr. Shaurya Shyam, for RP. JUDGMENT Per: Justice Rakesh Kumar Jain : In brief, Soni Realtors Pvt. Ltd. (Corporate Debtor) was developing a residential township under the name of Palm City in Karnal, Haryana involving a total of 377 Plots, a Nursing Home, Nursery School, and a Commercial Land. 2. SE Investment Limited now known as Paisalo Digital Ltd. (Financial Creditor) filed an application bearing (IB)-609(ND)/2017 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short Code ) before the Adjudicating Authority (National Company Law Tribunal, New Delhi, Court No. II) against M/s Soni Realtors Pvt. Ltd. (Corporate Debtor) which was admitted on 27.02.2018, Manoj Kulshreshta was appointed as Interim Resolution Professional and later on confirmed as Resolution Professional (in short RP ). 3. Shorn of unnecessary details, the RP filed an application bearing CA No. 747/ND/2018 under Section 30(6) and 31(1) of the Code for approval of the resolution plan submitted by the Resolution Applicant (Srijan Infra LLP) before the Adjudicating Authority. 4. The Adjudicating Authority vide its order dated 10.06.2022 allowed the application bearing CA No. 747/ND/2018 and approved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied copies of the impugned order were applied much after the expiry of period of 45 days, therefore, these appeals are not maintainable and deserves to be dismissed. 8. The RP has prepared a chart in which he has shown the number of appeals alongwith name of the parties, date of filing of the appeal and the delay, if any, occurred in filing, I.A if any, filed for condonation of delay, certified copy whether annexed or not and or the date when it is filed for obtaining the same and I.A. for seeking exemption from filing certified copy of the order. The said chart is reproduced as under:- Before the National Company Law Appellate Tribunal, Principal Bench, New Delhi Re: Appeals in the matter of Soni Realtors Pvt. Ltd. Date of Impugned Order 10.06.2022 Date of Expiry of 30 days 10.07.2022 Date of Expiry of 45 days 25.07.2022 Sr. No. Name Date of Filing IA for condonation of delay Certified Copy IA for seeking Exemption from filing certified copy order of the 1. Chanderpati Vs. Soni Realtors Pvt. Ltd. Comp. App. (AT) (Ins) No. 691 of 2023 Appeal filed on 11.07.2022 Delay of 1 day in filing appeal Application for condonation of delay is not filed. Only Photocopy of certified copy is fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 509 Application filed for seeking exemption from filing certified copy. 8. Sukhjinder Singh Anr. Vs. Soni Realtors Pvt. Ltd. Company Appeal (AT) (Ins) No. 1015 of 2022 Appeal filed on 11.07.2022. Delay of 1 day in filing appeal. IA No. 2963 of 2022 @ Pg. No. 266 Condonation of Delay application is filed. Condonation is sought for 1 day. Certified copy of the impugned order is filed. However, certified copy is applied on 21.07.2022 IA No. 2961/2023 @ Pg. No. 248 Generic Application is filed seeking exemption from filing typed/certified etc. 9. Somesh Arora Anr. Vs. Soni Realtors Pvt. Ltd. Company Appeal (AT) (Ins) No. 1122 of 2022 No specific IA is challenged Appeal filed on 26.07.2022. Delay of 16 days in filing appeal. IA No. 3340 of 2022 @ Pg. No. 512 Condonation of delay application is filed However, Condonation is sought for only 11 days Certified copy of impugned order is not attached IA No. 3342 of 2022 @ Pg. No. 488 Application filed for seeking exemption from filing certified copy. 10. Rakhi Thareja Ors. Vs. Soni Realtors Pvt. Ltd. Company Appeal (AT) (Ins) No. 1143 of 2022 No specific prayer Appeal filed on 21.07.2022. Delay of 11 days in filing appeal IA No. 3434 of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal (AT) (Ins) No. 916 of 2022. 11. On the other hand, D. N. Ray, Counsel Appearing in CA (AT) (Ins) No. 1085 of 2022 has submitted that the impugned order was passed on 10.06.2022 but the appeal having been filed through e-filing on 11.07.2022 is within the prescribed period of 30 days because the period of limitation is to be calculated by excluding the date on which the order was passed in view of Rule 3 of the NCLAT Rules, 2016 (in short Rules ) and Section 12(1) of the Limitation Act 1963 (in short the Act ). In this regard, he has referred to the decision of the Hon ble Supreme Court in the case of Sanket Kumar Aggarwal Anr. (Supra). It is further submitted that since the hard copy of the appeal was filed on 14.07.2022, therefore, as an abundant caution, the Appellant has filed an application i.e. I.A. No. 3198 of 2022 for seeking condonation of delay of four days otherwise, the appeal is within the period of 30 days. He has further referred to an order dated 01.07.2022 passed in I.A. No. 2929 of 2022 which was filed by the RP for clarification of the order dated 10.06.2022 regarding some typographical error which had occurred due to mentioning of the status of the IA s i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed copy is mandatory for an appeal to NCLAT against an order passed under the Code . According to him, there was no such question posed before the Hon ble Supreme Court in the said case that if the appeal is filed within the period of limitation though without a certified copy and an application for seeking exemption from filing certified copy is filed alongwith appeal invoking Rule 14, even if the certified copy is obtained after the expiry of 30 days or even 45 days, is a formal defect which is curable after the filing of the certified copy, with the permission of the Court, as it would relate back to the filing of the appeal. He has further argued that decision in the cases of Sanket Kumar Agarwal (Supra) as well as Jindal Power Limited (Supra) are also not applicable to the facts of this case and are thus wrongly relied upon by Counsel for the Respondent. He has however relied upon a decision of the Hon ble Supreme Court in the case of Collector Land Acquisition, Anantnag Anr. Vs. Mst. Katiji Ors. 1987 2 SCC 107 in which the Hon ble Supreme Court laid down various principles for adopting liberal approach in condoning the delay in matters instituted in Court. 13. In so far as CA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for exemption from filing certified copy in this case and hence, the appeal deserves to be dismissed as no automatic exemption is permissible in view of the decision of the Hon ble Supreme Court rendered in the case of V. Nagarajan (Supra). 16. Saket Sikri, Counsel appearing on behalf of the Appellant has argued CA (AT) (Ins) No. 1136 of 2022. It is submitted by him that since the impugned order was passed on 10.06.2022 and the appeal has been filed on 11.07.2022, therefore, this appeal is within limitation because the period would start running from 11.06.2022 as the date on which the impugned order was passed has to be excluded as per Rule 3 and Section 12 of the Act. In this case also, the certified copy was applied on 12.08.2022, even after the expiry of total period of 45 days and without filing an application for seeking exemption from filing certified copy of the impugned order. Counsel for the Appellant has submitted that filing of the certified copy after the order is passed by the Court is a curable defect and in this regard, he has referred to a decision of the Hon ble Supreme Court rendered in the case of Vidyawati Gupta and Ors. Vs. Bhakti Hari Nayak and Ors. (2006) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are directory in nature and noncompliance thereof would not automatically render the plaint non-est, as has been held by the Division Bench of the Calcutta High Court. 17. He has also relied upon a decision of the Division Bench of Hon ble Delhi High Court passed in the case of ONGC Ltd. Vs. Joint Venture of Sai Rama Engineering Enterprises Megha Engineering Infrastructure Ltd. 2023 SCC Online Del 63 to contend that the defect in the appeal having not been filed with the certified copy is curable by filing the same even if it is applied and obtained after the expiry of limitation. As according to him, every improper filing is not non-est. 18. In rebuttal, Counsel appearing on behalf of the Respondent has argued that even if it is presumed that the appeal is filed within the period of limitation but the fact would remain that the certified copy has been applied on 12.08.2022, even after the expiry of period of 30 + 15 days and that too withoutany application for seeking exemption from filing the certified copy of the impugned order. 19. Abhishek Anand, Counsel appearing on behalf of the Appellant has argued CA (AT) (Ins) No. 757 758 of 2022 which is in fact a single appeal. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir own facts and has not dealt with the issue which has been raised by the Respondent in the present appeals. He has also relied upon a decision of the Hon ble Supreme Court in the case of Sambhaji and Ors. Vs. Gangabai and Ors. (2008) 17 SCC 117 and referred to Para 10 and 14 which are reproduced as under:- 10. All the rules of procedure are the handmaids of justice. The language employed by the draftsman of processual law may be liberal or stringent, but the fact remains that the object of prescribing procedure is to advance the cause of justice. In an adversarial system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the statute, the provisions of CPC or any other procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justice. 14. Processual law is not to be a tyrant but a servant, not an obstruction but an aid to justice. A Procedural prescription is the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice. 22. On the other hand, Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Abhijeet Sinha, Sr. Adv. appearing on behalf of the Appellant has argued CA (AT) (Ins) No. 270 of 2023 and 1079 of 2023. These appeals were filed on 11.07.2022. It is submitted that these appeals are within the period of 30 days and the certified copy has been applied on 28.09.2022 in these appeals. These appeals have been filed with the photocopy of the impugned order. The application for seeking exemption from filing the certified copy has not filed in CA (AT) (Ins) No. 270 of 2023 but in CA (AT) (Ins) No. 1079 of 2023 the application for seeking exemption from filing the certified copy of the impugned order has been filed. He has also adopted the argument raised by other counsel appearing on behalf of the Appellant and in rebuttal, Counsel for the Respondent has reiterated its stand taken in the other appeals for the purpose of their dismissal. 27. Narender Hooda, Sr. Counsel appearing on behalf of the Appellant has argued CA (AT) (Ins) No. 1122 of 2022. He has submitted that the certified copy was applied on 07.07.2022. It was prepared on 18.07.2022. The appeal was filed through efiling on 21.07.2022 with I.A No. 3342 of 2022 for seeking exemption from filling certified copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating Authority may file an appeal (ii) the statutory right of an appeal can be exercised within a period of 30 days (iii) if the appeal is not filed within a period of 30 days, it can still be filed up to a period of 15 days but after assigning a sufficient cause (iv) no appeal can be filed after the expiry of 15 days. 34. The procedure for filing an appeal is laid down in Part III Institution of appeals-procedure of the NCLAT Rules, 2016 (in short Rules ) in which Rule 22 and 31 are relevant and are reproduced as under:- 22. Presentation of appeal .- (1) Every appeal shall be presented in Form NCLAT-1 in triplicate by the appellant or petitioner or applicant or respondent, as the case may be, in person or by his duly authorised representative duly appointed in this behalf in the prescribed form with stipulated fee at the filing counter and non-compliance of this may constitute a valid ground to refuse to entertain the same. (2) Every appeal shall be accompanied by a certified copy of the impugned order. (3) All documents filed in the Appellate Tribunal shall be accompanied by an index in triplicate containing their details and the amount of fee paid thereon. (4) Sufficient num ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent powers of the Appellate Tribunal and Rule 15 about the extension of time appointed either under the Rules or fixed by the order of the Tribunal. Rule 14 gives the power to the Appellate Tribunal to exempt and has the following parts (i) for seeking exemption from compliance with the requirement of the Rules, the Appellant has to assign sufficient cause (ii) the Appellate Tribunal may give directions as it may consider just and expedient to render substantial justice and (iii) the power to exempt has to exercised on the application moved in that behalf. 38. Rule 22(2) has been interpreted by the Hon ble Supreme Court in the case of V. Nagarajan (Supra) and it has been held that filing of the certified copy of the impugned order is mandatory, however, Rule 14 gives the power to the Appellate Tribunal to exempt the parties from complying with any of the requirement of the Rules on sufficient cause being shown and on the application moved in that regard. 39. In these cases, appeals have been filed under Section 61 of the Code, some of the appeals have been filed within the prescribed period of 30 days, some of the appeals have been filed within the extended period of 15 days along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts own facts. 43. In order to appreciate their respective arguments, we shall now refer to the facts of all the four cases relied upon by the Respondent and the ratio laid down by the Hon ble Supreme Court and this Appellate Tribunal. 44. Facts of the case of V. Nagarajan (Supra) are that the Adjudicating Authority pronounced the order on 31.12.2019 in the open court in the presence of the Appellant. The Judgment was uploaded on the website on 12.03.2020. However, the name of judicial member was incorrectly mentioned in the uploaded order, therefore, the corrected order was uploaded on 20.03.2020. The Appellant claims to have awaited the issue of a free copy and sought free copy on 23.03.2020 in terms of Section 420(3) of the Companies Act, 2013 (in short the Act, 2013 ) r/w Rule 50 of the NCLT, Rules, 2016 (in short NCLT Rules ). According to the Appellant, the free copy was not issued. The Appeal before this Tribunal was filed on 08.06.2020 with an application for exemption from filing the certified copy of the order as it had not been issued. The appeal was dismissed by this Tribunal on 13.07.2020 being barred by limitation. It noted that the statutory period had expired and app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act) would do violence to the special provisions enacted under the IBC where timing is critical for the workability of the mechanism, health of the economy, recovery rate of lenders and valuation of the corporate debtor. The IBC, as a prescriptive mechanism, affecting rights of stakeholders who are not necessarily parties to the proceedings, mandates diligence on the part of applicants who are aggrieved by the outcome of their litigation. An appeal, if considered necessary and expedient by an aggrieved party, is expected to be filed forthwith without awaiting a free copy which may be received at an indefinite stage. Hence, the omission of the words from the date on which the order is made available for the purposes of computation of limitation in Section 61(2) of the IBC, is a consistent signal of the intention of the legislature to nudge the parties to be proactive and facilitate timely resolution. 50. In respect of second question, the Hon ble Supreme Court, while referring to Rule 22 of the NCLAT Rules held that therefore, it cannot be said that the parties can automatically dispense with their obligation to apply for and obtain a certified copy for filing an appeal. Any delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had argued that the order of the NCLAT notes that the NCLT registry had objected to the appeal in regard to limitation, to which the appellant had filed a reply stating that the limitation period would begin from the date of the uploading of the order, which was 12 March 2020. The appellant submitted that the suo motu order of this Court dated 23 March 2020, taking retrospective effect from 15 March 2020, made under Article 142 of the Constitution, extended the limitation until further orders, which renders the appeal filed on 8 June 2020 within limitation. However it is important to note that this Court had only extended the period of limitation applicable in the proceedings, only in cases where such period had not ended before 15 March 2020. In this case, owing to the specific language of Section 61(1) and 61(2), it is evident that limitation commenced once the order was pronounced and the time taken by the Court to provide the appellant with a certified copy would have been excluded, as clarified in Section12(2) of the Limitation Act, if the appellant had applied for a certified copy within the prescribed period of limitation under Section 61(2) of the IBC. The construction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch a construction will upset the timely framework of the IBC. The litigant has to file its appeal within thirty days, which can be extended up to a period of fifteen days, and no more, upon showing sufficient cause. A sleight of interpretation of procedural rules cannot be used to defeat the substantive objective of a legislation that has an impact on the economic health of a nation. 34. On the second question, Rule 22(2) of the NCLAT Rules mandates the certified copy being annexed to an appeal, which continues to bind litigants underthe IBC. While it is true that the tribunals, and even this Court, may choose to exempt parties from compliance with this procedural requirement in the interest of substantial justice, as re-iterated in Rule 14 of the NCLAT Rules, the discretionary waiver does not act as an automatic exception where litigants make no efforts to pursue a timely resolution of their grievance. The appellant having failed to apply for a certified copy, rendered the appeal filed before the NCLAT as clearly barred by limitation. 51. Hence, in the case of V. Nagarajan (Supra), it has been held that the limitation would commence from the date of order and the time taken by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de a reference to the circular issued by the NCLAT on 03.01.2021 notifying the standard operating procedure for e-filing in terms of which physical copies were required to be filed as per the procedure prescribed under the NCLAT Rules alongwith e-filing receipt.On 21.10.2022, a further order was issued by the NCLAT as per which the period of limitation would cease to run only after a physical copy was presented. On 24.12.2022 another order was issued by which the earlier order dated 21.10.2022 was withdrawn and limitation was ordered to be computed from the date of e-filing. It was argued that even e-filing of the appeal on 10.10.2022 would not result in limitation ceasing to operate and it was only when the hard copy was filed then the limitation would stop running. On this premise, after discussing all the circulars issued by this Tribunal from time to time, the Hon ble Supreme court was pleased to hold that:- 23. Having regard to the above sequence of Rules and administrative orders, it is evident that on the one hand, Rule 22 of the NCLAT Rules 2016 requires the presentation of an appeal at the filing counter in the prescribed mode, but on the other, NCLAT also envisages e-fili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n V Nagarajan (supra) where even the application for obtaining the certified copy was not filed. In the present case, the appellant exercised due diligence and applied for a certified copy upon pronouncement of the order in terms of Rule 22(2) of the NLCAT Rules 2016. The certified copy was provided to the appellant on 15 September 2022. Hence, the period of 10 days between 5 September 2022 and 15 September 2022 taken by the court to provide a certified copy of the order ought to be excluded when determining the period of limitation under Section 61(2) of the IBC. 30. In view of the above discussion, we have come to the conclusion that the NCLAT was in error in dismissing the appeal on the ground of limitation. The explanation which was advanced by the appellant for condoning the period of 5 days (beyond the period of 30 days stipulated for the filing of an appeal) was, in our view, sufficient and the delay should have been condoned within the four corners of the statute. 54. Thus, in nutshell, in the aforesaid case, the Hon ble Supreme Court held that (i) the limitation stops running on the e-filing of the appeal and not from the date of presentation of the physical copy (ii) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of knowledge and not from the date of uploading of the order. The certified copy is stated to have been applied on 15.06.2022 i.e after the expiry of 30 days. It was then held that we thus are of the view that present appeal has been filed beyond 45 days from date of the order dated 06.05.2022 and delay of more than 15 days beyond the period of 30 days cannot be condoned by this Tribunal in exercise of its jurisdiction under Section 61(2) of the Code . 59. Thus, the ratio of all the four judgments is that (i) the period of limitation is to be reckoned from the date of pronouncement of the order in the cases covered by the Code (ii) It is mandatory to annex the certified copy of the impugned order with the memorandum of appeal (iii) the Tribunal may exempt the parties from compliance with the procedural requirement in the interest of substantial justice as reiterated in Rule 14 (iv) There is no automatic exemption where the litigants makes no efforts to pursue a timely resolution of their grievance. (v) The Appellant having failed to apply for a certified copy, rendered the appeal filed before the NCLAT as clearly barred by limitation. (vi) It is not open to the person aggrieved un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delay. In fact he runs a serious risk. 6. It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 62. It has also been well settled that where the substantive law provides for rights and liabilities of the parties, procedural law prescribes the practice, procedure and machinery for the enforcement of those rights and liabilities but a procedural law is always subservient to the substantive law and nothing can be given by a procedural law what is not sought to be given by a substantive law and nothing can be taken away by the procedural law what is given by the substantive law. 63. It has been found from the resume of the facts that four appeals have been filed within a period of 30 days, six appeals have been filed within the extended period of 15 days alongwith the application for condonation of delay which are yet to be decided and all these ten appeals have been filed with applications for seeking exemption from filing certified copy of the impugned order whereas three appeals have been filed without seeking exemption from filing certified copy ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
