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TMI Blog2024 (1) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... 2020 which was filed by the Resolution Professional, Appellant aggrieved by the said order has come up in this Appeal. 4. This Appeal was e-filed on 02nd July, 2023, there being delay in filing the Appeal, an Application being I.A. No. 5497 of 2023 for condonation of delay has been filed. The ground taken in the Application for condonation is that the Order dated 20th March, 2023 passed by the Adjudicating Authority was passed without giving an opportunity to the Appellant. Appellant gained knowledge of the Order dated 20th March, 2023 only on 3rd April, 2023 when the Appellant was apprised of the Order by letter dated 3rd April, 2023 issued by the Respondent demanding amount of Rs. 74,48,820/-. Appellant after gaining knowledge of the same filed an application being I.A. No. 2337 of 2023 on 19th April, 2023 before the Adjudicating Authority under Section 60(5)(c) of the Code read with Rule 11 and Rule 49 of the NCLT Rules, 2016 seeking recalling of the order dated 20th March, 2023. The Application was dismissed by the Adjudicating Authority on 28th March, 2023 for non-prosecution. Appellant filed another Application being I.A. No. 3270 of 2023 on 10th May, 2023 under Section 60(5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther contended that even if for argument sake the period during which the aforesaid application were pending is excluded, the Appeal filed is beyond 45 days from the order. It is submitted that Appeal having not been filed within condonable period, delay condonation application deserves to be rejected. 8. The main submission which has been pressed by Learned Counsel for the Appellant is that Appellant is entitled to exclude period during which I.A. No. 2337 of 2023 and I.A. No. 3270 of 2023 was pending before the Adjudicating Authority as noted above. Order dated 20th March, 2023 was passed by the Adjudicating Authority on I.A. No. 3362 of 2020 which was filed by the Resolution Professional seeking a direction to the Respondent (Appellant herein) to pay the entire outstanding dues without any adjustment. In I.A. No. 3362 of 2020, the Adjudicating Authority has recorded that no one has appeared on behalf of Respondent (Appellant herein) despite service of notice in terms of Order dated 03.01.2023. The Respondent was set ex-parte and by the Impugned Order, direction was issued to contribute the amount of Rs. 74,48,828/-. Appellant's case is that he came to know about the Order onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider Section 14 of the Limitation Act in reference to Appeal filed under Section 61 of the Code before the Appellate Tribunal. In the above case, Appeal was filed before the Appellate Tribunal against the Order dated 20th November, 2019 on 18.02.2020. The Appellate Tribunal had granted the benefit of Section 14 of the Limitation Act by excluding the period from 11.12.2019 to 28.01.2020 during which the writ petition was filed in the High Court. The grant of benefit of Section 14 in the Appeal was questioned before the Hon'ble Supreme Court. The arguments advanced by Learned Sr. Counsel challenging the extension of benefit of Section14 was noticed in paragraph 19 to 20 of the Judgment which are to the following effect: "19. Shri Rohatgi further submitted that as held by this Court in Innoventive Industries Ltd. v. ICICI Bank [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 : (2018) 1 SCC (Civ) 356] , the I&B Code is a complete code in itself. He submitted that Section 61(2) of the I&B Code provides that the decision of the adjudicating authority (i.e. NCLT) may be challenged before NCLAT within 30 days. He submitted that an appeal would be tenable within a further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance, that NCLT had adopted a procedure which was in breach of the principles of natural justice. It is specifically mentioned in the writ petition, that though an alternate remedy was available to it, it was approaching the High Court since the issue with regard to functioning of NCLT also fell for consideration. The proceedings before the High Court were hotly contested and by an elaborate judgment, the High Court dismissed [Kotak Investment Advisors Ltd. v. Krishna Chamadia, 2020 SCC OnLine Bom 197] the writ petition relegating the petitioner therein i.e. KIAL to an alternate remedy available in law. It is thus apparently clear, that KIAL was bona fide prosecuting a remedy before the High Court in good faith and with due diligence. In a given case, the High Court could have exercised jurisdiction under Article 226 of the Constitution inasmuch as, the grievance was regarding procedure followed by NCLT to be in breach of principles of natural justice. That would come within the limited area earmarked by this Court for exercise of extraordinary jurisdiction under Article 226 despite availability of an alternate remedy. 98. This Court recently in the judgment of Embassy Property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it." 18. Ambit and scope of Section 14 of the Limitation Act came for consideration before several judgments of the Hon'ble Supreme Court. We need to notice few judgments where contents of section 14 of the limitation act was examined and principles were laid down for applicability of Section 14 of the Limitation Act. 19. In (1975) 4 SCC 628, Roshanlal Kuthalia & Ors. Vs R.B. Mohan Singh Oberoi, ingredients of Section 14 were considered and following was laid down in paragraph 25-27: "25. Section 14, which neatly fits in, is simple in its ingredients, to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCR 397, 401] ]. In the Associated Hotels case (i. e. the very lis in its earlier round on the execution side) this Court pointed out [(1961) 1 SCR 259 at 272 [Associated Hotels of India Ltd. v. R.B. Jodhu Mal Kuthalia, AIR 1961 SC 156, 163] that the question was one of initial jurisdiction of the Court to entertain the proceedings. Thus in this very matter, the obstacle was jurisdictional and the exclusionary operation of Section 14 of the Limitation Act was attracted." 20. The next judgment where Section 14 was elaborately considered is the Judgment of Hon'ble Supreme Court in (2004) 3 SCC 458, Union of India & Ors. Vs. West Coast Paper Mills Ltd. & Anr. In paragraph 14 of the Judgment, following was laid down: "14. In the submission of Mr Malhotra, placing reliance on CST v. Parson Tools and Plants [(1975) 4 SCC 22 : 1975 SCC (Tax) 185] to attract the applicability of Section 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 is to afford protection to a litigant against the bar of limitation when he institutes a proceeding which by reason of some technical defect cannot be decided on merits and is dismissed. While considering the provisions of Section 14 of the Limitation Act, proper approach will have to be adopted and the provisions will have to be interpreted so as to advance the cause of justice rather than abort the proceedings. It will be well to bear in mind that an element of mistake is inherent in the invocation of Section 14. In fact, the section is intended to provide relief against the bar of limitation in cases of mistaken remedy or selection of a wrong forum. On reading Section 14 of the Act it becomes clear t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d good faith. We thus hold that second condition is also fulfilled. iii. The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature. The above Condition No. (iii) is based on statutory requirement as contained in Section 14(1) and Section 14(2) of the limitation act. The statutory requirement as contained in Section 14 is "which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it". Thus the exclusion of which is sought was not entertained by the Court due to defect of jurisdiction or other cause of a like nature. Present is not a case where it is contended that there was any defect of jurisdiction in the Adjudicating Authority in entertaining the recall application. Recall Application was filed by the Appellant to recall the ex-parte order under Rule 60(5)(c) read with Rule 11 and 49 of NCLT Rules, 2016. The expression "other cause of a like nature" came for consideration in Roshanlal Khutalia (supra) where Hon'ble Supreme Court held following in para 27 : "27......Moreover, the defects that will attract the provision are not merely jurisdictional strictly so called but others more or less neig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fault of his, as he in the example given is not the appellant. Clearly therefore, in such a case, the entire period of nine months ought to be excluded. If this is so for an appellate proceeding, it ought to be so for an original proceeding as well with this difference that the time already taken to file the original proceeding i.e. the time prior to institution of the original proceeding cannot be excluded. Take a case where the limitation period for the original proceeding is six months. The plaintiff/applicant files such a proceeding on the ninetieth day i.e. after three months are over. The said proceeding turns out to be abortive after it has gone through a chequered career in the appeal courts. The same plaintiff/applicant now files a fresh proceeding before a court of first instance having the necessary jurisdiction. So long as the said proceeding is filed within the remaining three month period, Section 14 will apply to exclude the entire time taken starting from the ninety-first day till the final appeal is ultimately dismissed. This example also goes to show that the expression "the time during which the plaintiff has been prosecuting with due diligence another civil pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts on the question whether misjoinder and non-joinder were defects which were covered by the words 'or other cause of a like nature'. It was to set at rest this conflict that Explanation III was added. An extended meaning was thus given to these words. Strictly speaking misjoinder or non-joinder of parties could hardly be regarded as a defect of jurisdiction or something similar or analogous to it." Hon'ble Supreme Court has repeated that the Section 14 is a beneficial provisions and it should be liberally interpreted to give relief to a litigant who was bona fide prosecuting the legal remedy. The above judgment of the Hon'ble Supreme Court has reiterated the principles which were well settled by earlier judgements as referred therein. Learned Counsel for the Appellant has also placed reliance on Judgment of the Hon'ble Supreme Court in State of Kerala & Ors. Vs. M.G. Presanna, (2011) 15 SCC 203 which was a case where a writ petition was allowed by a Ld. Single Judge on 08th April, 2009, review petition was filed in which there was a delay. Learned Single Judge has condoned the delay but ultimately dismissed the review petition. A Writ Appeal was filed. Division Bench dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disposal of the review petition. Learned Counsel for the Appellant has relied on State Bank of India Vs. Visa Steel Limited I.A. No. 774 of 2020 in C.A.(At) ins. No. 294 of 2020. In the above case, the review application was dismissed by the Adjudicating Authority. In paragraph 5 of the Judgment, following has been noted : "The 'Review Application' was dismissed by the 'Adjudicating Authority' on the ground of 'lack of jurisdiction' without looking into the merits of the case." The Appeal was filed with delay and Hon'ble Supreme Court extended the benefit of Section 14 and condoned the delay in filing the Appeal. In paragraph 35 of the Judgment, following has been held; "35. As far as the present case is concerned, the action of the Petitioner/Appellant in moving the Hon'ble Supreme Court of India in Civil Appeal No.3169 of 2019 after the 'Impugned Order' dated 25.6.2019 passed by the 'Adjudicating Authority', instead of preferring an 'Appeal' before this 'Tribunal' and later filing of the 'Review Proceeding' before the 'Adjudicating Authority', pursuant to the liberty granted by the Hon'ble Supreme Court as per order dated 29.7.2019 are bonafide, of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the impugned order only on 04.03.2020 through the representative of the First Respondent on being communicated etc., this Tribunal by taking a practical, purposeful, meaningful, pragmatic view and result oriented approach condones the delay in question and disposes of the Interlocutory Application. No costs." The above Judgment is based on the ground that Appellant came to know about the order only on 04th March, 2020 hence the delay was condonable. In present case we are considering the question of exclusion of period during which I.As filed by the Appellant were pending. The above judgment does not in any manner help the Appellant in the facts of the present case. Learned Counsel for the Appellant has also relied on Judgment of Hon'ble Delhi High Court in Bank of India Vs. M/s. Mehta Brothers and Ors. ILR 1991 Delhi 374. The above was a case where an application under order 9 CPC Rule 13 proviso was filed for setting aside the ex-parte decree. In the above context, Hon'ble Delhi high Court held that although counsel did not appear and ex-parte decree was passed but there was sufficient cause for setting aside the ex-parte decree, in paragraph 27, following was held: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itaire Infomedia Pvt. Ltd. in which Judgment also benefit of Section 14 was claimed on the basis of filing an application before the Adjudicating Authority which proceeding was ultimately withdrawn. This court took the view that benefit of Section 14 cannot be attracted. In paragraph 3 and 4 of the Judgment following has been held: "3. Learned Counsel for the Appellant has placed reliance on the judgement of Hon'ble Supreme Court in Sesh Nath Singh & Anr. in Civil Appeal No. 9198 of 2019 Vs. Baidyabati Sheoraphuli Cooperative Bank Ltd. & Anr. and the judgement of this Tribunal in IA no. 2315/2023 in Company Appeal (AT) Insolvency No. 694 of 2023 in the matter of Vikram Bhawanishankar Sharma, Member of the Suspended Board of Directors of Supreme Vasai Bhiwandi Tollways Pvt. Ltd. Versus SREI Infrastructure Finance Ltd. & Anr. The order on the basis of which the Appellant claims exclusion of time u/s 14 dated 13.02.2023 is to the following effect:- "Heard the submissions made by Ld. Counsel for the Applicant. Ld. Counsel for the Applicant has prayed for grant of liberty to withdraw the present application i.e. Rest.A/24/20223 and to prefer an appeal against the order dated 22.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank Ltd., 2017 SCC OnLine Cal 9738] , on the prima facie satisfaction that the proceedings initiated by the financial creditor, which is a cooperative bank, was without jurisdiction. The writ petition filed by the corporate debtor was not disposed of even after almost four years. The carriage of proceedings was with the corporate debtor. The interim order [Debitech Fabtech (P) Ltd. v. Baidyabati Seoraphully Coop. Bank Ltd., 2017 SCC OnLine Cal 9738] was still in force, when proceedings under Section 7 IBC were initiated, as a result of which the financial creditor was unable to proceed further under the SARFAESI Act.Thus the Judgment of the Hon'ble Supreme Court does not in any manner help the Appellant in the present case. 84. In the instant case, even if it is assumed that the right to sue accrued on 31-3-2013 when the account of corporate debtor was declared NPA, the financial creditor initiated proceedings under the SARFAESI Act on 18-1-2014, that is the date on which notice under Section 13(2) was issued, proceeded with the same, and even took possession of the assets, until the entire proceedings were stayed by the High Court by its order dated 24-7-2017 [Debitech Fabtech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility of limitation act. 25. We are also conscious of the judgment of the Hon'ble Supreme Court in J. Kumaradasan Nair and Anr. Vs. IRIC Sohan & Ors. (2009) 12 SCC 175 where it was held that even if sub-section 2 of section 14 of limitation act may per se not be applicable, principles can be applicable for the purpose of condonation of delay in terms of Section 5 thereof. Paragraph 18 of the Judgment is as follows: "18. It is also now a well-settled principle of law that mentioning of a wrong provision or non-mentioning of any provision of law would, by itself, be not sufficient to take away the jurisdiction of a court if it is otherwise vested in it in law. While exercising its power, the court will merely consider whether it has the source to exercise such power or not. The court will not apply the beneficent provisions like Sections 5 and 14 of the Limitation Act in a pedantic manner. When the provisions are meant to apply and in fact found to be applicable to the facts and circumstances of a case, in our opinion, there is no reason as to why the court will refuse to apply the same only because a wrong provision has been mentioned. In a case of this nature, sub-section (2) o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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