TMI Blog2022 (5) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to defect of jurisdiction and other causes of like nature is the issue to be answered. Hon ble Supreme Court in ROSHANLAL KUTHALIA ORS VERSUS RB. MOHAN SINGH OBEROI [ 1974 (10) TMI 98 - SUPREME COURT] while interpreting Section 14 held that any circumstance legal or factual, which inhibits entertainment or consideration by the court of the dispute on the merits, comes within the scope of the section and liberal touch must inform the interpretation of the Limitation Act. The period during which the winding up petition filed by the Appellant was pending before the High Court needs to be excluded within the meaning of Section 14, sub-section (2). It is noticed that all details regarding winding up petition and the order of the High Court of Delhi passed in winding up petition dated 13.03.2019 were brought on record in the Section 9 Application. Thus, ample foundation has been laid down for exclusion of time under Section 14(2) of the Limitation Act. Whether, even if, the Appellant is entitled for exclusion for period during which winding up Petition remained pending in High Court of Delhi, the delay in filing Section 9 Application thereafter, can be condoned under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant : Mr. Sanjeev Kumar, Advocate For the Respondent : Mr. Krishnendu Datta, Sr. Advocate, Mr. Manish Kumar Srivastava, Advocate JUDGMENT ASHOK BHUSHAN, J. This Appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the Code ) has been filed against the order dated 14.10.2021 passed by National Company Law Tribunal, Court-V, New Delhi, rejecting the Application filed by the Appellant under Section 9 as time barred. 2. Brief facts of the case and sequence of events necessary to be noticed for deciding this Appeal are: (i) The Appellant is engaged in providing advertising and brand development services. It entered into a Service Agreement with Times Internet Ltd. dated 12.10.2012 as a service provider. The Agreement was valid from 12.10.2012 to 11.10.2014. The Appellant Operational Creditor provided services to the Times Business Solutions Ltd., for which an amount of Rs.87,81,526.80/- became due. (ii) On 26.09.2014, Times Business Solutions Ltd., to whom the Operational Creditor provided services was merged with another entity (Respondent herein), that is, Times Internet Ltd. Corporate Debtor. Company P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Act, 1963. It is further submitted that the High Court itself had granted liberty while dismissing winding up petition and in response to which liberty Section 9 Application was filed, hence, a short delay in filing Section 9 application consequent to the liberty granted by the High Court, ought to have been condoned. The Learned Counsel for the Appellant relied on the affidavit dated 28.01.2022, where explanation for delay including the claim for exclusion of time of two years, seven months and 10 days have been made. The learned Counsel for the Appellant submits that insofar as condonation of delay under Section 5 of the Limitation Act is concerned, the same can be allowed by the Court on there being sufficient cause without there being any formal Application for condonation of delay. 7. The learned Senior Counsel for the Respondent Shri Krishnendu Datta refuting the submissions of the learned Counsel for the Appellant contends that the Appellant is not entitled to claim any benefit under Section 14 of the Limitation Act, since the dismissal of the winding up petition by the High Court of Delhi was not on ground of any defect of jurisdiction, but the Petition was dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. Incidentally, the date of last invoice is 01.02.2014, therefore the due date should be 03.03.14 i.e., 30 days from the date of invoice as stated in the Agreement (Pg 44 clause 3.3). The law with respect to date of default and limitation under IBC has been clearly laid down by Hon ble Supreme Court in several judgments and since the Limitation Act 1963 is applicable to applications filed under Sections 7 and 9 of IBC from the inception of IBC therefore, Article 137 of the Limitation Act 1963 gets attracted which is reproduced below: 137. Any other application for which no period of limitation is provided elsewhere in this Divisioin 3 yrs When the right to apply accures. 8. The Petitioner has filed the present petition on 30.01.20 and also failed to file any application for condoning the delay. Thus, three years from the date when the right accrues is the period when OC gets the right to trigger CIRP. The existence of debt and default on the part of the CD cannot be established as the due debt is stated to be on 03.03.14, which is barred by limitation period which expired on the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appeal shall be deemed to be prosecuting a proceeding; (c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction. 14. We need to now find out the details of winding up proceeding and the reasons for rejection of the said winding up petition by the High Court of Delhi. In the affidavit of compliance filed by the Appellant in this Appeal, the date of filing of winding up petition is mentioned as 03.08.2016. In Section 9 Application, which was filed by the Appellant before the Adjudicating Authority, the detailed reference of the winding up proceedings were mentioned. The order dated 13.03.2019 passed by the High Court of Delhi in Company Petition No.682 of 2019 has also been filed along with Section 9 Application and the details of filing of winding up petition and the orders passed were also given. In the list of dates, which is part of Section 9 Application in Item Nos.7 and 8, following has been stated: 07 14/07/2016 The Operational Creditor filed a Petition for winding up under the sections 433(e),(f), 434(1) (a) (c) Read with Section 439 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atutory notice has been sent against the company, namely, Times Internet Ltd., the said company cannot also be impleaded or subjected to a winding up proceeding. The present petition is accordingly dismissed with liberty to the petitioner to take steps as per law against the actual entity. 16. Winding up petition, thus, stood dismissed, since the real entity, that is, Times Internet Ltd., with whom the Times Business Solutions Ltd. was merged from 26.09.2014 was neither noticed nor impleaded in winding up petition. No statutory notice having been sent to the Times Internet Ltd., the winding up petition was dismissed. Thus, the winding up petition stood dismissed due to defect of procedure as noticed in paragraph 6 of the judgment of the High Court of Delhi. Present is not a case where High Court of Delhi had no jurisdiction to entertain the winding up petition, but whether the proceedings were not entertained due to defect of jurisdiction and other causes of like nature is the issue to be answered. 17. In this context, we may now refer to few judgments of the Hon ble Supreme Court where Section 14 of the Limitation Act came for consideration. In Roshanlal Khuthalia and Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 14 of the Limitation Act, the following requirements must be specified: (SCC p. 25, para 6) 6. (1) both the prior and subsequent proceedings are civil proceedings prosecuted by the same party; (2) the prior proceedings had been prosecuted with due diligence and in good faith; (3) the failure of the prior proceedings was due to a defect of jurisdiction or other cause of a like nature; (4) both the proceedings are proceedings in a court. In the submission of the learned Senior Counsel, filing of civil writ petition claiming money relief cannot be said to be a proceeding instituted in good faith and secondly, dismissal of writ petition on the ground that it was not an appropriate remedy for seeking money relief cannot be said to be defect of jurisdiction or other cause of a like nature within the meaning of Section 14 of the Limitation Act. It is true that the writ petition was not dismissed by the High Court on the ground of defect of jurisdiction. However, Section 14 of the Limitation Act is wide in its application, inasmuch as it is not confined in its applicability only to cases of defect of jurisdiction but it is applicable also to cases where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sections 14 and 15 of the Limitation Act, 1963 has been expressly upheld by the three-Judge Bench holding, We have no reason to take a different view. 19. To the same effect is the subsequent three Judge judgment of the Hon ble Supreme Court reported in (2008) 7 SCC 169 Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department and Ors., wherein in paragraphs 21 and 22, following was laid down: 21. Section 14 of the Limitation Act deals with exclusion of time of proceeding bona fide in a court without jurisdiction. On analysis of the said section, it becomes evident that the following conditions must be satisfied before Section 14 can be pressed into service: (1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party; (2) The prior proceeding had been prosecuted with due diligence and in good faith; (3) The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature; (4) The earlier proceeding and the latter proceeding must relate to the same matter in issue and; (5) Both the proceedings are in a court. 22. The policy of the section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant to Times Business Solutions Ltd. We, thus, are of the considered opinion that period during which the winding up petition filed by the Appellant was pending before the High Court needs to be excluded within the meaning of Section 14, sub-section (2). We may further notice that all details regarding winding up petition and the order of the High Court of Delhi passed in winding up petition dated 13.03.2019 were brought on record in the Section 9 Application. Thus, ample foundation has been laid down for exclusion of time under Section 14(2) of the Limitation Act. The Question No.(1) is answered accordingly. Question No.(2) 21. Although in the Section 9 Application date for filing of the winding up petition has been mentioned as 14.07.2016 as noted above, but in the affidavit dated 28.01.2022, the date of filing of winding up petition has been mentioned as 03.08.2016. Thus, even if, we take 03.08.2016 as the date of filing the winding up petition, which got dismissed on 03.03.2019 and remained pending for period of two years, seven months and 10 days, the said period deserves to be excluded from the period of limitation, under which Section 9 Application was to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the court or tribunal to weigh the sufficiency of the cause for the inability of the appellant applicant to approach the court/tribunal within the time prescribed by limitation, there is no bar to exercise by the court/tribunal of its discretion to condone delay, in the absence of a formal application. 62. A plain reading of Section 5 of the Limitation Act makes it amply clear that, it is not mandatory to file an application in writing before relief can be granted under the said section. Had such an application been mandatory, Section 5 of the Limitation Act would have expressly provided so. Section 5 would then have read that the court might condone delay beyond the time prescribed by limitation for filing an application or appeal, if on consideration of the application of the appellant or the applicant, as the case may be, for condonation of delay, the court is satisfied that the appellant applicant had sufficient cause for not preferring the appeal or making the application within such period. Alternatively, a proviso or an Explanation would have been added to Section 5, requiring the appellant or the applicant, as the case may be, to make an application for condonation o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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