National Company Law Appellate Tribunal
M/S. Sbeecables (India) Limited vs C A Mahalingam Sureshkumar on 4 April, 2024
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
AT CHENNAI
(APPELLATE JURISDICTION)
Company Appeal (AT) (CH) (Ins) No.26/2024
(IA No.88/2024) (IA No.89/2024)
(Filed under Section 61 of the Insolvency and Bankruptcy Code, 2016)
(Arising out of the Impugned Order dated 17.11.2023 in
I.A.(IBC)/1421/(CHE)/2022 in C.P.(IB)/1169 (CHE)/2019, passed by the
National Company Law Tribunal, Chennai Bench)
In the matter of:
M/s SbeeCables (India) Limited
Represented by its Authorized Signatory
Having its registerd office at
29.J.C.W. Industrial Estate, 11th KM,
Kanakapura Road, Bengaluru,
Karnataka - 560062 ... Appellant
V
C A Mahalingam Sureshkumar,
Liquidator of M/s. EasunReyrolle Ltd.
(In Liquidation)
Reg. No.IBBI/IPA-001/IP-P00110/2017-2018/10217)
Having office at:
M/s. SPP & Co., Chartered Accountants
No.27/9, Nivedh Vikas, Pankaja Mill Road,
Puliyakulam, Coimbatore
Tamil Nadu - 641 045 ...Respondent
Present:
For Appellant : Mr. Sriram Venkataravaradan, Advocate
For Respondent/Liquidator: Ms. Sangamithra Loganathan, Advocate
For Mr. B. Dhanraj, Advocate
ORDER
Pronounced on 04/04/2024 (Hybrid Mode) [Per: Justice Sharad Kumar Sharma; Member (Judicial)] :
1. This Company Appeal has been preferred by the Appellant, by invoking the provisions contained under Section 61 of the Insolvency and Bankruptcy Code, 2016, where there has been a challenge to the Impugned Order Comp App (AT) (CH) (Ins) No.26/2024 Page 1 of 9 dated 17th November 2023, by virtue of which the Hon'ble 'Adjudicating Authority'/'National Company Law Tribunal', Chennai Bench in IA(IBC)/1421(CHE)/2022, as preferred in CP(IB)/1169/CHE/2019, had rejected the 'Application of Claim', raised by the 'Appellant'.
2. Though primarily the question which would be required to be considered at this stage by this 'Tribunal', would be confined to the aspect of determination of limitation, in preferring an 'Appeal', under section 61 of the Insolvency and Bankruptcy Code, 2016 in the light of the provisions contained under (Sub Section 2) of Section 61, but Tribunal feels apt to deal with the basic issues for the purposes of better elucidation of the aspect of limitation.
3. The Corporate Debtor i.e. M/s. Easun Reyrolle Ltd. (herein to be called as the 'Corporate Debtor') who was admitted into the Corporate Insolvency Resolution Process vide order dated 5th May 2020, in a proceedings being held as IBA/1045/2019 State Bank of India M/s Easun Reyrolle Ltd. Consequent to the admission of the Corporate Debtor into Liquidation, an order was passed on 17th February 2022 in IA/817(CHE)/2021 in IBA/1045/2019 and IBA/1169/2019 whereby the Respondent was appointed as Liquidator.
4. The Respondent who was appointed as a Liquidator by an order dated 17.02.2022, upon assumption of his office had issued a sale proclamation in terms of the IBC Code, thereby inviting the submission of bids from the prospective bidders, for the purposes of purchasing of the assets of the Corporate Debtor under liquidation. It is contended by the Appellant that upon participation in the bidding process as invited by the Liquidator, the Appellant was found to be the Successful Bidder for the property of the Corporate Debtor, as situated at E1, Temple Tower Old Door No.35/5, New No.476 Anna Salai, Nandanam, Chennai, which was part of Lot No.3 which was subject in the Auction Process as it was conducted on 20th October 2022. The lot which was auctioned to the Appellant, who was ultimately found to be a Sole Applicant in the e-auctioning process contends that they had deposited the EMD on 14th October 2022, since being as a Successful Bidder, a letter of intent identifying the Appellant as a successful bidder was also got issued by the Respondent to the Appellant on 20th October 2022, thereby calling upon him to deposit 25% of the Sale Consideration as deduced to be the Earnest Money Deposits by 21st October 2022 and the balance 75% of the Sale consideration was to Comp App (AT) (CH) (Ins) No.26/2024 Page 2 of 9 be paid on or before 19th November 2022, as settled under the terms of invitation of bids.
5. It is contended by the Appellant, that all a sudden and without assigning any logical reasons and by way of a summary decision of the Respondent/Liquidator, certain dispute arose pertaining to the access to the auctioned property, which was alleged to have access through a common entrance and had also issued a letter in that regards to the respondent on 20th October 2022, requesting by the letter to provide clarification regarding the user of the common entrance to the auctioned property. It is contended by the Appellant that the Respondent/Liquidator, without providing the clarification as it was requested by the Appellant pertaining to the access of the auction property, the Liquidator had issued a letter whereby the Liquidator instead of giving any response, has on the contrary forfeited the EMD deposited by the Appellant on the ground of alleged non-payment of 25% of the sale consideration, within the prescribed time limit. It was thereafter that on 2nd of November 2022, the respondent had issued a letter to the Appellant, wherein without providing any opportunity to raise his claim and clarification, in support thereto, the respondent had stated that since the e-auction has taken place on the basis of "as is where is, as is what is, and without recourse basis", the EMI has been forfeited. Based on these issues the Appellant had approached National Company Law Tribunal, Chennai Bench, consequent to his approach to the National Company Law Tribunal, Chennai Bench, the Adjudicating Authority by the Impugned Order dated 17th November 2022, had forfeited the 'Earnest Money Deposit' and accordingly the 'act of the Liquidator', was held to be just and valid by the impugned judgement.
6. It is aggrieved against the said Judgement, that the instant Appeal has been preferred.
7. What is the relevant to point out, at this juncture is that the judgement was rendered on 17th November 2023, the Appellant was admittedly signatory to the judgement as reflected from order sheet itself, meaning thereby as on the date of pronouncement of the judgement on 17th November 2023, the Appellant had the knowledge of rendering of the judgement of directing forfeiting his EMD. But despite of the judgement having been rendered on 17th November 2023, the Appellant for the reasons best known, had belatedly applied for the certified copy of Comp App (AT) (CH) (Ins) No.26/2024 Page 3 of 9 impugned judgement on 21st December 2023, meaning thereby and apparent too from records, that the application for the certified copy of order was filed, was even after the lapse of limitation period prescribed under Section 61 of the IBC Code.
8. On simpliciter reading of the language of (sub section 2) of the Section 61, it provides that every appeal under (sub section 1) shall be filed within 30 days, before the National Company Law Appellate Tribunal. Meaning thereby, the first slot of limitation as prescribed for preferring an appeal, would be within a period of 30 days from the date of declaration/pronouncement of the judgement, which in the instant case would be 17th November 2023, which would be expiring on 16th December 2023. But, apparently and admittedly too, the Appellant for the reasons known to the appellant it had applied for the certified copy of the impugned judgement only on 21st December 2023 i.e. much after the expiry of the period prescribed under sub (Section 2) of Section 61 of the IBC Code.
9. The said 'certified copy', was applied for by the appellant only on 21st December 2023, and the same was made available by the Registry of National Company Law Tribunal, Chennai, on 5th January 2024. Hence, the appellant has preferred the instant Appeal by filing the same before the Registry of this 'Tribunal' on 14th January 2024. The same was scrutinised on 17th January 2024 and the Registry of National Company Law Appellate Tribunal, had reported that the appeal was belatedly preferred by 28 days.
10.The Learned Counsel for the Appellant for the purpose of seeking of condonation of delay had filed IA No.90/2024, seeking to condone the delay which according to the computation made by the Appellant, it would be falling short by 14 days, which would be well within the ambit of Proviso to (Sub section 2) of Section
61. The ground for seeking condonation of delay has been provided by the Appellant, under sub para II of Para 3 of the Delay Condonation Application. To summarise the reasons given therein he contended, that he could not file the appeal within the 30 days for the reason given
(i) appellant was situated at Bengaluru;
(ii) he had to consume sufficient time for seeking legal advice
(iii)he was restrained to file the appeal within time because of the cyclone in Chennai, which admittedly according to him was during the first week of December 2023, and Comp App (AT) (CH) (Ins) No.26/2024 Page 4 of 9
(iv) lastly the Appellant was unable to engage a legal professional for seeking legal advice and thus the appeal was barred by 14 days.
11.On the contrary, the determination of limitation as it has been made by the Registry, it has computed the delay of 28 days from the date of judgement. Admittedly the judgement, was pronounced on 17th November 2023 in the presence of the appellant and well with the knowledge of its pronouncement would be attributed to him from the said date itself and if there is a belated application filed by him before the 'Registry of the Tribunal', for procuring the certified copy of the order, which admittedly according to him had happened to be after the expiry of the prescribed period of limitation, statutorily prescribed under (sub Section 2) of Section 61 of the Act, i.e. 21st December 2023, he cannot take the advantage of determining the limitation as to be 14 days by excluding the aforesaid period and contending thereof, that in the light of the provisions contained under section 12 of the Limitation Act, the said period involved in getting the certified copy has to be excluded for the purpose of determination of limitation.
12.The 'statute' in its specific term under its proviso to (sub section 2) of Section 61, provides that the Tribunal cannot condone the delay in preferring an appeal beyond the upper limit prescribed for it, which has been left at the discretion of the Tribunal and that has been statutorily fixed to be 15 days only, and not beyond it. Thus, the contention of the Appellant that he has to be awarded with the benefit of Section 12(2) of the Limitation Act, since having received the certified copy of judgement only on 5th of January 2024 and that the limitation has to be determined from 5th of January 2024 and not with effect from the date of pronouncement of the judgement i.e. 17th November 2023, may not be logically and legally sustainable.
13.This contention raised by the appellant of not to determine the period of limitation w.e.f. 17th November, 2023 and his contention to determine the same after excluding the period which was involved in receiving the certified copy of the order on 21st December 2023, in the light of the provisions contained under Section 12 of the sub Section 2 is not acceptable by this 'Court'/'Tribunal' for the reason being that, because if the benefit if at all remotely it could be extended to the Appellant as contemplated under (sub Section 2) Section 12 of the Limitation Act, which would have been only when the appellant had applied for obtaining certified copy of Comp App (AT) (CH) (Ins) No.26/2024 Page 5 of 9 Judgement dated 17th November 2023, had it been applied for well within the prescribed limit of Limitation, as provided under (sub-Section 2) of Section 61 i.e. within 30 days from the date of the Judgement. The logic behind is that the Appellant cannot take advantage of his own wrong, because that the appellant had chosen to apply for the certified copy, after the expiry of the initial period of limitation prescribed under (Sub Section 2) of Section 61, having applied for the same only on 21st December 2023, he cannot contend that the said period from 21 st December 2023 to 5th January 2024, when he had actually received the 'certified copy' has to be excluded is not an acceptable proposition by this Tribunal.
14.Apart from it, the contention of the Learned Counsel for the Appellant is not acceptable for the reason being that there was an apparent lack of diligence on the part of the appellant to file an appeal within the period of limitation for the reason being that admittedly because even after having received the certified copy of the judgement on 5th January 2024, the affidavit in support of delay condonation application was got prepared only on 30th of January 2024. Meaning thereby there had been an intervening delay of 8 days in preferring the appeal even from the date of receipt of the certified copy of the judgement as per appellant's case itself. Even this Court doesn't find any logic that when the certified copy was received on 5 th January 2024 and the affidavit in support thereto was prepared on 13th January 2024, what was the justified reason available at the hands of the appellant, even with effect from 5th January 2024 for not filing an appeal within the time till 14 th of January 2024.
15.The Learned Counsel for the Appellant in support of his contention has heavily relied upon the Judgement as reported in 2022 (1) 2 SCC Page 244 V Nagarajan Vs SKS Ispat and Powers Ltd. and Ors. and particularly he has made reference to para 31 of the Judgement which is extracted hereunder:-
"In other words, he intends to contend that any person aggrieved by an order/judgement who intends to file an appeal is expected to file an application for the certified copy before the expiry of period of limitation, upon which the time requisite for obtaining the certified copy has to be excluded."
16.However, the time taken by the Court to prepare the decree or an order, before any application for a copy is made cannot be excluded. This paragraph Comp App (AT) (CH) (Ins) No.26/2024 Page 6 of 9 No.31, the relevant part of it which is extracted above has had to be read in its totality, not in piece meal to suit the convenience of the Appellant. The exclusion of the period of limitation under the light of the proviso contained under Section 12 sub (section 2) of the Limitation Act, would be only when the person intending to file an appeal, files an application for procuring the certified copy of the judgement within the statutory limitation period prescribed under the Act.
17.Meaning thereby in other words, the Hon'ble Apex Court clearly intends to postulate, that to seek an exemption under (sub section 2) of the Section 12 of the Limitation Act, filing of an application for procuring the certified copy of the Judgement has had to be within the principle period of limitation for filing of an appeal, as contemplated under the statue i.e. under (Sub section 2) of Section 61 herein, which could be set aside if the application is filed after the expiry of period of limitation, prescribed under statue, the benefit of exclusion of the period to procure the certified copy, would not be available to the Appellant to seek the benefit of (sub section 2) of Section 12 of the Limitation Act, as apparently he had applied much later.
18.On the contrary, the Counsel for the Respondent vehemently opposes the delay condonation application contending thereof that the propriety of arguments extended by the Learned Counsel for the Appellant cannot be accepted for the reason being, that the Hon'ble Apex Court in a Judgement reported in 2023 SCC Online Supreme Court 1663 Sanjay Pandurang Kalad vs Vespara ICTL, has specifically laid down in its Para (18) that the Provisions of the National Company Law Tribunal Rules, 2016, there has had to be a clear-cut demarcation while interpreting the implications of Rule 115(1), which contemplates as to what would be considered would be the actual date of pronouncement, which is a mandate provided under law for preferring an appeal. The pronouncement of judgement would mean that the "pronouncement", has to be made by the court/tribunal after determination of issues and upon an application of mind in the open court/tribunal and the said conditions stands satisfied that the certified copy of the judgement itself where the 'Appellant' is a signatory to it (i.e. the judgement) signifying the fact that he was available and present on the date of the pronouncement and hence since he had positive knowledge of the pronouncement Comp App (AT) (CH) (Ins) No.26/2024 Page 7 of 9 for him the limitation would start running from 17th November 2023 and not from the date of receiving the certified copy of the order as argued.
19.The Learned Counsel for the Respondent has relied upon a Judgement rendered by the Principal Bench of National Company Law Appellate Tribunal in Comp. App. (AT)(Ins) No.1169/2022, EXIDE INDUSTRIES LTD. VS Jitender Kumar Jain Resolution Professional of Morakhia Copper & Alloys Pvt. Ltd., where too the Principal bench has observed and has laid down that the Limitation of filing the appeal begins when the order was actually pronounced, and particularly when pronounced in the court in the presence of the Appellant. The receipt of the free copy or a free certified copy would not be the part or the period involved therein which could be determined as to be a period for filing of an appeal. In its literal connotation the word 'pronouncement' in its judicial interpretation means to give a "concrete judgement" or "opinion formerly in an official proceedings in the Court Proceedings", where a 'Judge' or 'Bench' thereof will pronounce a judgement or its sentence, the pronouncement means in its meaning as per the 'Oxford Dictionary' and expression or rationale conclusion on the part of the court on a given controversy by the Court/Tribunal and not from the date when the certified copy was applied for. Thus, the period of limitation in the instant case so far as the appellant is concerned will start running from the date of judgement i.e. 17th November 2023 and not from the date when the copy was provided to him i.e. on 5th January 2024, particularly when the appellant himself has applied for the procurement of the certified copy of the impugned judgement after the expiry of the statutory period of limitation for which no benefit of Section 12(2) of the Limitation Act, could have been extended in the light of the judgement of the Hon'ble Apex Court as rendered in V. Nagarajan supra.
20.The Learned Counsel for the Appellant in sub para II of Para 3 of the 'Delay Condonation Application has given unjustifiable reason which were not even prevalent at the time when the period of limitation for preferring an appeal was actually subsisting.
21.That the counsel for the Appellant has endeavoured to argue certain grounds in support of the delay condonation application which are not even pleaded in the principal delay condonation application and if this be the situation his plea Comp App (AT) (CH) (Ins) No.26/2024 Page 8 of 9 which is not taken and pleaded in defence for seeking condonation of delay cannot be considered by this Tribunal, since being beyond the pleadings.
22.It would be too hypothetical to accept the arguments extended by the Learned Counsel for the Appellant that he had to seek legal advice and that his placement in Bengaluru had created an embargo in filing an Appeal in time. In fact, due to technological development, these two reasons seems to be without any plausible justification, which could be acceptable by this Tribunal to condone the delay of 28 days which has chanced in filing an appeal, hence as such the period is not extendable under the 2nd proviso of Section 61. The appeal lacks merit, the application for delay condonation application being IA No.88/2024 lacks merit and the same stands rejected and as the consequence thereto, the Comp. App. (AT)(CH)(Ins) 26 of 2024 would too stand Dismissed. No costs.
Connected pending IA No.89/2024 is closed.
[Justice M. Venugopal] Member (Judicial) [Justice Sharad Kumar Sharma] Member (Judicial) [JatindranathSwain] Member (Technical) SE/TM Comp App (AT) (CH) (Ins) No.26/2024 Page 9 of 9