National Company Law Appellate Tribunal
Arvind Garg Liquidator Of Carnation ... vs Mr. Jagdish Khattar & Others on 20 January, 2023
1
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH,
NEW DELHI
Company Appeal (AT) (Insolvency) No. 743 of 2020
&
I.A. No. 258, 3473, 4401, 4361 of 2022
IN THE MATTER OF:
ARVIND GARG
LIQUIDATOR OF CARNATION AUTO INDIA
PVT. LTD. ...Appellant
Versus
JAGDISH KHATTAR & ORS. ...Respondents
Present:
For Appellant: Mr. Kamal Mehta, Mr. Abhishek Chauhan, Mr. Arvind
Garg, Ms. Heerika Shukla and Ms. Jasmine Sharma,
Advocates for Liquidator
For Respondent: Ms. Varsha Banerjee, Advocate for R-1
Mr. Vishal Yadav, Advocate for R-6
Mr. Satendra K. Rai, Advocate for R-9
ORDER
Per: Justice Rakesh Kumar Jain:
I.A. No. 3473 of 2022 & 4401 of 2022 in Company Appeal (AT) (Ins.) No. 743 of 2020 An application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short 'Code') r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (in short 'Rules') was filed by the Punjab National Bank as a financial creditor against M/s Carnation Auto India Pvt. Ltd. (Corporate Debtor). The said petition i.e. CP No. (IB)-
302(ND)/2017 was admitted on 25.09.2017 by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench at New Delhi) and vide order dated 01.08.2018 liquidation of the Corporate Debtor was ordered and the RP was directed to act as the Insolvency Liquidator. The Liquidator filed I.A. No. 3473 of 2022 & 4401 of 2022 2 an application bearing CA No. 16/ND/2019 under Section 43, 45, 50 & 66 of the Code for avoidance of transactions. The said application has been dismissed vide the order dated 24.07.2020. The present appeal has thus been filed against the said order by the Liquidator.
2. Mr. Jagdish Khattar (since deceased) and his two sons, namely, Kunal Khattar and Gautam Khattar have been arrayed as Respondents in this appeal besides the other Respondents. Ms. Varsha Banerjee, Adv. appearing on behalf of the Respondent No. 1 had informed the Tribunal on 12.07.2021 about the unfortunate demise of Respondent No. 1. The order was recorded on 12.07.2021 in the following manner:-
"Today the matter is listed for directions. Nobody gave appearance on behalf of the Appellant. It is informed that the Respondent No. 1 has been passed away. The Appellant is directed to file appropriate application in this regard. Ld. Counsel for the Respondent No. 8 submits that he has filed an application I.A. No. 2937 of 2020. Such Application will be considered on next date. Parties are directed to comply the office notice dated 27th May, 2021 and 06th July, 2021. Let the matter be fixed for hearing and for orders on I.A. No. 2937 of 2020 on 31st August, 2021."
3. On 01.09.2021, the following order was recorded:-
"Today the matter is listed to settle the date. Ld. Counsel for the Appellant submits that he will file appropriate application as the Respondent No. 1 had passed away. He is directed to do so within two weeks. Ld. Counsel appearing on behalf of Respondent is directed to file the death certificate of R-1 within a week and provide copy to the Appellant's Counsel.
Let the mater be listed for 'Hearing' on 15th November, 2021 on top of the list."
4. Thereafter on 15.11.2021, Counsel appearing on behalf of the Appellant made a request before this Tribunal that he intend to file an application for seeking details of the Legal Representatives (LRs) of Respondent No. 1 and as such an order was passed on 15.11.2021, which read as under:-
I.A. No. 3473 of 2022 & 4401 of 2022 3 "Mr. Kamal Mehta Learned Counsel for the Appellant to bring the Interlocutory Application filed for seeking details of the 1st Respondent/ LR. The 'Office of the Registry' is directed to list the matter on 03rd December, 2021."
5. The Appellant filed an application i.e. I.A. No. 2693 of 2021 for a direction to Respondent No. 2 and 3 to provide the details of the legal heirs of the deceased Respondent No. 1, which was disposed of on 24.08.2022 in the following manner:-
"I.A. No. 2693 of 2021 is filed by the Appellant for seeking a direction to the Respondent Nos. 2 and 3 to give the details of the legal heirs of the deceased Respondent No.1.
2. Counsel for the Applicant has submitted that Respondent No. 1 has unfortunately expired on 26.04.2021 and two of his sons, namely, Kunal Khattar and Gautam Khattar are already on record as the Respondent No. 2 and 3. He has submitted that until and unless legal heirs of the deceased Respondent No. 1 are brought on record, no effective order could be passed but the details are not being given by Respondent No. 2 and 3 though requested on many occasions by the Appellant. Hence, the present application is filed for seeking the aforesaid direction.
3. At this stage, Mr. Varsha Banerjee, has put in appearance on behalf of the Respondent No. 2 and 3.
4. We have heard counsel for the parties and perused the record.
5. As per Order 22 of CPC, legal heirs of deceased Respondent (s) has to be impleaded and for that matter, if the details of the legal heirs are not in possession of the Appellant then it is rather the bounden duty of the Counsel appearing on behalf of the Respondent No. 1 to file such an application but in this case it could be suffice to say that Respondent No. 1 (Ms. Varsha Banerjee) shall provide complete details of the legal heirs of the deceased Respondent No. 1 (Jagdish Khattar). Let the needful be done on or before 05th September, 2022. With these observations, the present application is disposed of."
6. Thereafter, the Appellant filed an application i.e. I.A. No.3437 of 2022 for bringing on record the legal representatives of deceased Respondent No. 1 in which notice was issued on 20.09.2022 and at that time Ms. Varsha Banerjee, Adv. accepted notice on behalf of the proposed LRs and requested for time to file reply as according to her wife of the deceased Respondent No. I.A. No. 3473 of 2022 & 4401 of 2022 4 1 was not required to be impleaded as a party. The order in I.A. No. 3437 of 2022 passed on 20.09.2022, read as under:-
"This application is filed by the Appellant to bring on record legal representatives of deceased Respondent No. 1 who are mentioned in Para 2(b) of the application. Notice in the application. At this stage, Mr. Varsha Banerjee, accepts notice on behalf of the proposed LRs i.e. Ms. Kiran Khattar wife of Jagdish Khattar, Mr. Gautam Khattar, (son) and Mr. Kunal Khattar (Son). She prays for an adjournment to file Reply to the application as according to her wife of the deceased Jagdish Khattar is not required to be impleaded as a party. Adjourned to 10th October, 2022."
7. Thereafter, an issue was raised by Respondent No. 1 that the application for impleadment has not been filed within the period of limitation as prescribed under Article 120 of the Limitation Act, 1963 and hence, an order was passed on 10.10.2022 as follows:-
"The issue involved in this case is about impleadment of Smt. Kiran Khattar as the legal representative of deceased Jagdish Khattar, (Respondent No. 1). Counsel for the Appellant has submitted that Mr. Jagdish Khattar expired on 26th April, 2021. He admits that as per Article 120 of the Limitation Act, 1963, the period of limitation for impleadment is 90 days. However, the application for seeking details of the legal representative of deceased Jagdish Khattar was moved in November, 2021, much after the expiry of 90 days which in fact had expired on 26th July, 2021. Counsel for the Applicant submits that Application was filed in November, 2021 within the period of limitation in view of two orders passed by the Hon'ble Company Appeal (AT) Ins. No. 743 of 2020 & I.A. No.2937 of 2020 & 258,3473 of 2022 2 of 2 Supreme Court during the Covid, 2019. He also submits that the Application is maintainable.
Be that as it may, Counsel for the Applicant prays for an adjournment for arguing the matter. On his request, the matter is adjourned to 17th October, 2022.
It is made clear that no further adjournment shall be granted."
8. On 17.10.2022, the case was adjourned to find out as to whether the limitation to file the application for impleadment has expired and the Appellant was required to file an application under Section 5 of the Limitation I.A. No. 3473 of 2022 & 4401 of 2022 5 Act, 1963 for condonation of delay. The order on that date i.e. 17.10.2022 was passed as under:-
"Counsel for the Appellant has submitted that Respondent No. 1 (Jagdish Khattar) died on 26.04.2021. His two sons are already party to the lis but he filed an application bearing I.A. No. 2693 of 2021 on 29.11.2021 for a direction to Respondent No. 1 to provide complete details of his Legal Representatives. The said application was decided on 24.08.2022 and after obtaining the details, another application bearing I.A. No. 3473 of 2022 is filed to implead the widow of Jagdish Khattar as well besides his two sons. Reply of this application has been filed by the Respondent who has raised the issue of limitation as according to her, the limitation to implead the LRs of the deceased Respondent is 90 days, in terms of Article 120 of the limitation Act, 1963. In this regard, Counsel for the Appellant has submitted that the issue of limitation came up before the Hon'ble Apex Court in MA No. 665 of 2021 in RE: Cognizance for extension of limitation, which was disposed of on 27.04.2021 and thereafter, another Miscellaneous Application No. 21 of 2022 was filed in the same matter which was decided on 10.01.2022. The relevant observations of the Hon'ble Apex Court are reproduced as under:
3. Thereafter, due to a second surge in COVID-19 cases, the Supreme Court Advocates on Record Association (SCAORA) intervened in the Suo Motu proceedings by filing Miscellaneous Application No. 665 of 2021 seeking restoration of the order dated 23.03.2020 relaxing limitation. The aforesaid Miscellaneous Application No.665 of 2021 was disposed of by this Court vide Order dated 23.09.2021, wherein this Court extended the period of limitation in all proceedings before the Courts/Tribunals including this Court w.e.f 15.03.2020 till 02.10.2021.
5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions:
I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi judicial proceedings.
II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.
I.A. No. 3473 of 2022 & 4401 of 2022 6 III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.
IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings."
Counsel for the Appellant has submitted that the application is within limitation but Counsel for the Respondent while referring to the aforesaid order of the Hon'ble Apex Court has submitted that the application is still beyond the period of limitation. Counsel for the Appellant has submitted that the Appellant filed the application for seeking the details of the LRs of R1 on 29.11.2021, which was eventually decided on 24.08.2022 and the application was filed on 12.09.2022.
He, however, prays for an adjournment in order to examine the issue as to whether the Appellant is still required to file an application under Section 5 of the Limitation Act, 1963 for condonation of delay, if any, in filing of the application for impleadment of the LRs of R1.
Counsel for the Respondent has also raised the issue that wife of deceased R1 cannot be impleaded as a party because she has nothing to do with the affairs of the company of which R1 was the director.
Adjourned to 16th November, 2022."
9. The Appellant then filed an application i.e. I.A. No. 4401 of 2022 for condonation of delay in which the following order was passed on 01.12.2022:
"This Application is filed under Section 5 of the Limitation Act, 1963 for seeking condonation of delay of 427 days in impleading the legal representatives of Respondent No.1 in terms of Order 22 Rule 4 of the Code of Civil Procedure, 1908.
Issued notice in the Application. At this stage Ms. Varsha Banerjee, Counsel for Non-applicant accepts notice and prays for a short accommodation to file Reply of the Application. On her request, adjourned to 15th December, 2022."
I.A. No. 3473 of 2022 & 4401 of 2022 7
10. After the reply was filed by the Respondent to the application i.e. I.A. No. 4401 of 2022 the arguments have been heard on both the applications i.e. I.A. No. 4401 of 2022 and 3473 of 2022.
11. The application i.e. I.A. No. 4401 of 2022 is filed for seeking condonation of delay of 427 days in filing of the application seeking impleadment of LRs of deceased Respondent No. 1. It is submitted that there is no delay in filing of the Application but in order to avoid any kind of technicalities and as an abundant precaution, the present application has been moved.
12. Counsel for the Appellant has submitted that Respondent No.1 Jagdish Khattar had expired on 26.04.2021. The Appellant was not aware of his demise. It was first brought to his notice in the proceedings held on 12.07.2021 when his Counsel apprised about his death to the Tribunal. The Appellant could not get the details of the LRs of Respondent No. 1 as it was not reflected in the records of the Corporate Debtor which is maintained by the Appellant in his capacity as liquidator and had thus filed an application i.e. I.A. No. 2693 of 2021 on 29.11.2021 for seeking a direction to Respondents No. 2 and 3 (sons of Jagdish Khattar) who are already on record in their personal capacity to provide the details of other LRs so that necessary steps could be taken to implead them as well. The said application was disposed of on 24.08.2022 and Counsel for Respondent No. 1 was directed to provide the details of the LRs of deceased Respondent No. 1. It is further alleged that Counsel for Respondent No. 1, vide order dated 08.09.2022, provided the details and after receiving the details, immediately an application i.e. I.A. No. 3473 of 2022 on 12.09.2022 was filed for seeking to implead Mrs. I.A. No. 3473 of 2022 & 4401 of 2022 8 Kiran Khattar wife of deceased Respondent No. 1. It is submitted that the period of limitation stopped running in all the matters in terms of the order of the Hon'ble Supreme Court dated 23.03.2020 passed in Suo Motu Writ Petition (C) No. 3 of 2020. The said order is reproduced as under:-
"This Court has taken Suo Motu cognizance of the situation arising out of the challenge faced by the country on account of Covid-19 Virus and resultant difficulties that may be faced by litigants across the country in filing their petitions/applications/suits/ appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws (both Central and/or State).
To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such 2 proceedings in respective Courts/Tribunals across the country including this Court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings.
We are exercising this power under Article 142 read with Article 141 of the Constitution of India and declare that this order is a binding order within the meaning of Article 141 on all Courts/Tribunals and authorities.
This order may be brought to the notice of all High Courts for being communicated to all subordinate Courts/Tribunals within their respective jurisdiction.
Issue notice to all the Registrars General of the High Courts, returnable in four weeks."
13. Thereafter, an order was passed on 08.03.2021, containing the following directions: -
"1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till
14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021.
2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.
I.A. No. 3473 of 2022 & 4401 of 2022 9
3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.
4. The Government of India shall amend the guidelines for containment zones, to state.
"Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements."
14. Thereafter, M.A. No. 665 of 2021 was filed by Supreme Court Advocates on Record Association in which the following order was passed:-
"The Court is convened through Video Conferencing. This Court took suo motu cognizance of the situation arising out of the challenge faced by the country on account of COVID-19 Virus and resultant difficulties that could be faced by the litigants across the country. Consequently, it was directed vide order dated 23rd March, 2020 that the period of limitation in filing petitions/ applications/ suits/ appeals/ all other proceedings, irrespective of the period of limitation prescribed under the general or special laws, shall stand extended with effect from 15th March, 2020 till further orders.
Thereafter on 8th March, 2021 it was noticed that the country is returning to normalcy and since all the Courts and Tribunals have started functioning either physically or by virtual mode, extension of limitation was regulated and brought to an end. The suo motu proceedings were, thus, disposed of issuing the following directions: 3 "1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from
15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021.
2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.
I.A. No. 3473 of 2022 & 4401 of 2022 10
3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.
4. The Government of India shall amend the guidelines for containment zones, to state.
"Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements."
Supreme Court Advocate on Record Association (SCAORA) has now through this Interlocutory Application highlighted the daily surge in COVID cases in Delhi and how difficult it has become for the Advocates-on-Record and the litigants to institute cases in Supreme Court and other courts in Delhi. Consequently, restoration of the order dated 23rd March, 2020 has been prayed for.
We have heard Mr. Shivaji M. Jadhav, President SCAORA in support of the prayer made in this application. Learned Attorney General and Learned Solicitor General have also given their valuable suggestions.
We also take judicial notice of the fact that the steep rise in COVID- 19 Virus cases is not limited to Delhi alone but it has engulfed the entire nation. The extraordinary situation caused by the sudden and second outburst of COVID-19 Virus, thus, requires extraordinary measures to minimize the hardship of litigant-public in all the states. We, therefore, restore the order dated 23rd March, 2020 and in continuation of the order dated 8th March, 2021 direct that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders. It is further clarified that the period from 14th March, 2021 till further orders shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.
We have passed this order in exercise of our powers under Article 142 read with Article 141 of the Constitution of India. Hence it shall I.A. No. 3473 of 2022 & 4401 of 2022 11 be a binding order within the meaning of Article 141 on all Courts/Tribunals and Authorities.
This order may be brought to the notice of all High Courts for being communicated to all subordinate courts/Tribunals within their respective jurisdiction. Issue notice to all the Registrars General of the High Courts, returnable in 6 weeks.
List the Miscellaneous Application on 19th July, 2021."
15. Thereafter, the Supreme Court Advocate on record filed M.A. No. 21 of 2022 in MA No. 665 of 2021 in which the following order was passed: -
"1. In March, 2020, this Court took Suo Motu cognizance of the difficulties that might be faced by the litigants in filing petitions/ applications/suits/ appeals/ all other quasi proceedings within the period of limitation prescribed under the general law of limitation or under any special laws (both Central and/or State) due to the outbreak of the COVID-19 pandemic.
2. On 23.03.2020, this Court directed extension of the period of limitation in all proceedings before Courts/Tribunals including this Court w.e.f. 15.03.2020 till further orders. On 08.03.2021, the order dated 23.03.2020 was brought to an end, permitting the relaxation of period of limitation between 15.03.2020 and 14.03.2021. While doing so, it was made clear that the period of limitation would start from 15.03.2021.
3. Thereafter, due to a second surge in COVID-19 cases, the Supreme Court Advocates on Record Association (SCAORA) intervened in the Suo Motu proceedings by filing Miscellaneous Application No. 665 of 2021 seeking restoration of the order dated 23.03.2020 relaxing limitation. The aforesaid Miscellaneous Application No.665 of 2021 was disposed of by this Court vide Order dated 23.09.2021, wherein this Court extended the period of limitation in all proceedings before the Courts/Tribunals including this Court w.e.f 15.03.2020 till 02.10.2021.
4. The present Miscellaneous Application has been filed by the Supreme Court Advocates-on-Record Association in the context of the spread of the new variant of the COVID-19 and the drastic surge in the number of COVID cases across the country. Considering the prevailing conditions, the applicants are seeking the following:
i. allow the present application by restoring the order dated 23.03.2020 passed by this Hon'ble Court in Suo Motu Writ Petition (C) NO. 3 of 2020; and ii. allow the present application by restoring the order dated 27.04.2021 passed by this Hon'ble Court in M.A. no. 665 of 2021 in Suo Motu Writ Petition (C) NO. 3 of 2020; and iii. pass such other order or orders as this Hon'ble Court may deem fit and proper.
I.A. No. 3473 of 2022 & 4401 of 2022 12
5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions:
I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi- judicial proceedings.
II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.
III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.
IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.
6. As prayed for by learned Senior Counsel, M.A. No. 29 of 2022 is dismissed as withdrawn."
16. Counsel for the Appellant has submitted that in view of the order passed in M.A. No. 21 of 2022 by the Hon'ble Apex Court, the period from 15.03.2020 till 28.02.2022 was excluded for the purpose of limitation as may be prescribed under any special law or general law in respect of all judicial or quasi-judicial proceedings. It has also been held that in cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation I.A. No. 3473 of 2022 & 4401 of 2022 13 remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining w.e.f 01.03.2022 is greater than 90 days, that longer period shall apply. It is thus submitted that the limitation was extended up to 28.05.2022. It is further submitted that during this period the application filed by the Appellant was pending which was decided on 24.08.2022 and direction was issued to Respondent No. 1 to provide details of LRs of the Respondent No. 1 which was provided on 08.09.2022 and then within a period of four days the application i.e. I.A. No. 3471 of 2022 was filed on 12.09.2022 and thus, there is no delay.
17. Counsel for Respondent has argued that in order to make out a case for condonation of delay, the Applicant has to show sufficient cause and according to her, in the application filed by the Applicant no sufficient cause has been assigned except that the application could not be filed earlier because the Appellant was not aware firstly about the death of Respondent No. 1 and then the application was filed for seeking details of the LRs on 29.11.2021 which was decided on 24.08.2022. It is submitted that these reasons are not sufficient for the purpose of seeking condonation of delay and has rather submitted that the period of limitation had started to run from the date of death of Respondent No. 1 on 26.04.2021. As according to her, Article 120 of the Limitation Act, 1963 provides a period of 90 days for filing of an application to implead the LRs and the time from which the period to run is from the date of death of the plaintiff or defendant as the case may be. According to her, the period of limitation had expired on 25.07.2021. It is further submitted that she had brought to the notice of the Appellant much I.A. No. 3473 of 2022 & 4401 of 2022 14 less this Tribunal about the demise of Respondent No. 1 on 12.07.2021 and at that time still 13 days were available with the Appellant to file the application within the period of 90 days. It is further submitted that even the period of limitation had started, for the sake of argument from 12.07.2021 when the Appellant came to know about the death of the Respondent No. 1, the application should have been filed up to 12.10.2021 but no effort was made by the Appellant rather the application for seeking details of LRs was filed on 29.11.2021, after about four and half months. It is further submitted that there is delay on the part of the Appellant at every stage and as such the application filed by the Appellant is much beyond the period of limitation without assigning any sufficient cause is liable to be dismissed.
18. We have heard Counsel for the parties in regard to the application for condonation of delay.
19. There is no dispute to the facts that Respondent No. 1 had expired on 26.04.2021. Counsel for Respondent No. 1 brought it to the notice to this Tribunal as well as the Appellant on 12.07.2021. The Application i.e. I.A. No. 2693 of 2021 was filed on 29.11.2021. The said application was decided on 24.08.2022 and in compliance of the order passed in the said application particulars of the LRs of Respondent No. 1 were provided by Counsel for Respondent No. 1 vide email dated 08.09.2022 and the application was filed for impleadment by the Appellant on 12.09.2022. Article 120 of the Limitation Act, 1963 provides the period of limitation for the purpose of bringing the LRs of the deceased plaintiff or defendant on record in terms of the provision of Code of Civil Procedure 1908. Article 120 is reproduced as under:-
120. Under the Code of Civil Ninety days The date of death of Procedure, 1908, to have the the plaintiff, I.A. No. 3473 of 2022 & 4401 of 2022 15 legal representative of a appellant, defendant deceased plaintiff or or respondent, as the appellant or of a deceased case may be defendant or respondent, made a party
20. The present application has been filed under Section 5 of the Limitation Act, 1963 which deals with the extension of prescribed period in certain cases in respect of delay caused in filing of the appeal or application within the prescribed period. Section 5 is reproduced as under:-
"Extension of prescribed period in certain cases.--Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period"
21. In normal circumstances, as per the provision of Article 120 of the Limitation Act, 1963, after the death of Respondent No. 1 on 26.04.2021 the application for impleadment for LRs could have been filed up to 26.07.2021 but in the present case the death of Respondent was not within the knowledge of the Appellant (Liquidator) and it cannot also be presumed that he knew about his death until and unless some cogent evidence is produced rather the factum of the death was brought before the Tribunal as well to the notice of the Applicant for the first time on 12.07.2021 without disclosing the details of LRs of the Respondent No. 1. It has been urged by the Appellant that it tried to find out from the available record of the Corporate Debtor about the LRs of the deceased of R1 but when he could not find the same, filed the application i.e. I.A. No. 2693 of 2021 on 29.11.2021. The said application was ultimately decided on 24.08.2022 by this Tribunal and the information was given by Counsel for Respondent No. 1 to the Appellant on 08.09.2022 and I.A. No. 3473 of 2022 & 4401 of 2022 16 thereafter, the application was filed on 12.09.2022. In the integrum, because of order of the Hon'ble Apex Court, reproduced hereinabove, in Suo Motu Writ Petition No. 3 of 2020 the period from 15.03.2020 to 28.02.2022 was excluded with further grace period of 90 days. In that manner, the limitation provided under Article 120 of the Limitation Act, 1963 became non-operative and can be stated to have again started from 28.05.2022 but during this period application i.e. I.A. No. 2693 of 2021 filed by the Appellant on 29.11.2021 for seeking the details of the LRs of Respondent No. 1 was pending which ultimately decided on 24.08.2022 without there being any fault on the part of the Appellant and as soon as when the particulars were provided by Counsel for Respondent No. 1 to the Appellant on 08.09.2022 through email the necessary application i.e. I.A. No. 3473 of 2022 was filed within four days.
22. Thus, in view of the aforesaid facts and circumstances, we do not find any delay in filing of the application and as Counsel for the Appellant has submitted that the Application for condonation of delay has been filed with abundant caution, in case there is any delay, the Appellant has been successful in providing the sufficient cause for condonation of delay. Ultimately result is that the application is allowed.
23. Now, we will deal with the application i.e. I.A. No. 3473 of 2022 which has been filed by the Appellant for bringing on record LRs of Respondent No.
1. It is urged in the application that Respondent No. 1, died on 26.04.2021, has left behind three legal heirs which are as under;-
"i. Ms. Kiran Khattar (Wife) R/o E-16, Sector 40, Noida, U.P. - 201301 ii. Mr. Gautam Khattar (Son) R/o E-16, Sector 40, Noida, U.P.- 201310 iii. Mr. Kunal Khattar (Son) R/o 3/16, 2nd Floor, Shanti Niketan, New Delhi - 110021"
I.A. No. 3473 of 2022 & 4401 of 2022 17
24. It is further urged that all the three aforesaid persons are the successor- in-interest of Respondent No. 1. Out of the aforesaid three, Gautam Khattar and Kunal Khattar are already impleaded in the appeal in their personal capacity, who may be also taken to have been impleaded as LRs of the Respondent No. 1 and his widow Ms. Kiran Khattar is also impleaded as such. Amended memo of parties is also filed alongwith the application as Annexure A-2.
25. Counsel for the Respondent has vehemently argued that Ms. Kiran Khattar, widow of Respondent No. 1 should not be impleaded as LRs as she has no interest in this case. She has also submitted that the Appellant has sought relief pertaining to Section 66 and 67, which is a personal to the deceased Respondent No. 1.
26. In this regard, Counsel for the Appellant has referred to definition of LRs as provided in Section 2(11) of the Code of Civil Procedure, 1908 to contend that LRs is the one who intermeddles with the estate of the deceased or represent the estate of a deceased. It is further submitted that the receipts of the alleged fraudulent act of the deceased Respondent No. 1 has gone to the share of his widow as she in class I heir in terms of Section 8 of the Hindu Succession Act, 1956 as the deceased Respondent No. 1 was a Hindu.
27. We have heard Counsel for the parties and perused the record.
28. Legal Representatives is not defined in the Code. Therefore, reference could be had to the definition provided to it in the Civil Procedure Code Section 2(11):-
"2(11) legal representative" means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party I.A. No. 3473 of 2022 & 4401 of 2022 18 sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or suied;"
29. According to the aforesaid provision, a person who in law represents the estate of a deceased person and the person who intermeddles with the estate of the deceased are the LRs. The widow Ms. Kiran Khattar definitely represent the estate of the deceased in view of the fact that she is in class I heir as per schedule-I of Section 8 of the Hindu Succession Act, 1956 and insofar as Section 66 and 67 of the Code are concerned, the impact of the said provision about the transfer of the estate arising out of the fraudulent transaction is to be seen only after impleadment.
30. Thus, in our considered opinion, there is merit in the present application, accordingly the same is hereby allowed and the aforesaid three LRs of deceased Respondent No. 1 are hereby impleaded as LRs of Respondent No. 1. The amended memo of parties is taken on record.
[Justice Rakesh Kumar Jain] Member (Judicial) [Mr. Kanthi Narahari] Member (Technical) New Delhi 20th January, 2023 Sheetal I.A. No. 3473 of 2022 & 4401 of 2022