National Company Law Appellate Tribunal
Mayur Ratilal Suchak & Anr vs Mr. Birendra Kumar Agarwal on 29 February, 2024
Author: Ashok Bhushan
Bench: Ashok Bhushan
NATIONAL COMPANY LAW APPELLATE TRIBUNAL,
PRINCIPAL BENCH, NEW DELHI
I.A. No. 85 of 2024
in
Company Appeal (AT) (Insolvency) No. 25 of 2024
IN THE MATTER OF:
Mayur Ratilal Suchak & Anr. ...Appellant
Versus
Birendra Kumar Agarwal ...Respondent
For Appellant: Mr. Krishnendu Datta, Sr. Advocate with Mr.
Shivek Trehan and Ms. Rishika Goyal, Advocates.
For Respondents: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Kunal
Kanungo, Mr. Vishesh Kalra, Mr. Jaiveer Kant,
Ms. Tanushree Sogani, Advocates.
Mr. Anuj Aggarwala and Ms. Khushbu Chhajed,
Advocates for Intervenor.
JUDGMENT
ASHOK BHUSHAN, J.
1. This is an application (I.A. No. 85 of 2024) praying for condonation of delay in filing the Appeal.
2. The Appeal has been filed against Order dated 09th November, 2023 passed in I.A. No. 3445 of 2023 filed by the Appellant seeking a direction to register the Corporate Debtor as MSME.
3. The Application was dismissed by the Adjudicating Authority on 09th November, 2023 against which order this Appeal has been e-filed on 27th December, 2023.
Cont'd.../ -2-
4. In Section 5 Application, the ground taken by the Appellant is that impugned order was passed on 09th November, 2023 which was uploaded only on 22nd November, 2023 and after uploading of the Order, the Appellant started approaching the several advocates for filing the Appeal, the Appeal was prepared and completed on 24th December, 2023. It is submitted that 30 days period prescribed under Section 61(2) expired only on 22nd December, 2023 and there is delay of only 5 days in filing the Appeal.
5. Delay Condonation Application was heard on 08th February, 2024 on which date Learned Counsel appearing for the Respondent contended that order was delivered on 09.11.2023 itself and this tribunal on 08.02.2024 called for a report from Registrar of NCLT, Mumbai Bench. The Order dated 08th February, 2024 passed by this Tribunal is as follows:
"08.02.2024 This is a delay condonation of application filed by the Appellant to condone the delay. This appeal has been filed against order dated 09.11.2023 passed by National Company Law Tribunal, Court-V, Mumbai Bench in I.A. No.3445 of 2023. This appeal has been e- filed on 27.12.2023.
Learned Counsel for the Appellants submit that the order was uploaded only on 22nd November and prior to that order was not available to the Appellant, hence the delay is within condonable period.
I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -3- Learned Counsel for the Respondent on the other side says that order was delivered on the said date. In the facts of this case, ends of justice the serve in calling a report from Registrar of the NCLT, Mumbai Bench as to when the order was delivered and what is the date when it was uploaded. Let, the report be submitted within 10 days.
List this Appeal on 21st February, 2024."
6. In pursuance of the order, a report has been forwarded by Assistant Registrar along with report of Court Officer dated 16.02.2024 which report is as follows:
"To, The Dy Registrar NCLT, Mumbai Subject: Order dated 08.02.2024 passed by the Hon'ble NCLT in Company Appeal (AT) Ins. No. 25 of 2024 titled "Mayur Ratilal Suchak & Anr. Vs. Birendra Kumar Agarwal"
Sir,
1. It is intimated that as per the court records the order dated 09.11.2023 in IA/3445/2023 in CP(IB)/979(MB)/2022 by NCLT, Mumbai Bench Court-V was dictated on board in open court to the knowledge of the Ld. Counsel's and the order was uploaded on 22nd November, 2023.
2. This is four your information and necessary action.
Yours sincerely (Sandeep Kumar) Court Officer V"
I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -4-
7. We have heard Mr. Krishnendu Dutta, Learned Sr. Counsel for the Appellant and Mr. Abhijeet Sinha, Learned Sr. Counsel appearing for Respondent.
8. Learned Sr. Counsel for the Appellant submits that order having been uploaded on 22nd November, 2023, the limitation for filing the Appeal shall commence only from 22nd November, 2023. It is further submitted that Appellant was diligent in prosecuting his Appeal and application for certified copy was applied on 22nd November, 2023. It is submitted that on 09th November, 2023, the case was listed for "further consideration" and it was not listed for pronouncement and Appellant became aware of the Order only on 23rd November, 2023 when it was uploaded on 22nd November, 2023 hence the delay is only of 5 days in filing the Appeal since 30 period expired on 22nd December, 2023.
9. The submissions of the Appellant have been refuted by the Learned Sr. Counsel appearing for the Respondent and it is submitted that order was pronounced on 09th November, 2023 itself by the Adjudicating Authority after hearing the parties in the Court in presence of learned counsel for the Appellant. The submission of the Appellant that order was not pronounced is not correct. I.A. filed by the Appellant was dismissed in the presence of learned counsel for the Appellant hence the period for limitation shall commence from the date when order was pronounced. It is submitted that Impugned Order records the presence of the counsel representing the appellant when order was being dictated in the open court and it is not open to Appellant to contend that limitation shall I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -5- commence only from the date of the uploading. It is submitted that Appeal has been filed beyond 15 days from expiry of the prescribed period of limitation of 30 days. The delay in filing the Appeal is beyond condonable period and the same is liable to be rejected.
10. We have considered the submissions of Learned Sr. Counsel for the parties and have perused the record.
11. Learned Counsel for the Appellant has placed reliance on Judgment of Hon'ble Supreme Court in Sanjay Pandurang Kalate Vs. Vistra ITCL (INDIA) Limited & Ors., Civil Appeals Nos 7467-7468 of 2023. Learned Counsel submits that in the above case, case was also not listed for pronouncement and order was uploaded only on 30th May, 2023 hence it was held that period of limitation shall begin on 30th May, 2023 hence it was held that appeal was filed within condonable period. In the above case, the case was listed not for pronouncement of judgment but was listed for admission. By the query of the court, both the counsel in the above case has stated before the Supreme Court that no substantive order was passed on 17th May, 2023. The said fact has been noticed in paragraph 19-20 of the Judgment. It is useful to quote paragraph 19 to 21 of the Judgment:
"19. In the present case, the cause list for 17 May 2023 placed on record by the appellant indicates that the case was listed for admission and not for pronouncement. Further, on a specific query of the Court, it is not in dispute between counsel for the appellant and the respondent, that no substantive order was passed on 17 May 2023 by the NCLT. In I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -6- these circumstances, limitation would not begin to run on 17 May 2023 which was the date on which hearings concluded. As no order was passed before 30 May 2023, there was no occasion for the appellant to lodge an application for a certified copy on 17 May 2023. Time for filing an appeal would commence only when the order appealed from was uploaded since prior to that date no order was pronounced.
20. In V Nagarajan (supra), there was an unequivocal pronouncement of the order before the upload of the order and thus, the decision is not applicable to the facts of the case. In the facts of the present case, the date of upload of the order is the same as the date of pronouncement. To avoid situations such as these, in cases where the matter has been heard on a particular day but the order is pronounced on a later date, the NCLT must refrain from affixing the date of hearing on the order. Such an approach would be a violation of the NCLT Rules, which create a distinction between hearing and pronouncement and do not allow the NCLT to dispense with the requirement of pronouncement.
21. In view of the above, the period of limitation began to run on 30 May 2023. The 30- day limitation period provided in Section 61(2) of the IBC concluded on 29 June 2023. Though the appeal was filed beyond the period of thirty days, it was within the condonable period of fifteen days. We are of the considered view that the appeal should be restored to the NCLAT for reconsidering whether the appellant has shown sufficient cause I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -7- for condoning the delay beyond thirty days. To facilitate this, the impugned order of the NCLAT declining to condone the delay is set aside and the proceedings are restored to the file of the NCLAT. We are not inclined to stay the CIRP at this stage. However, the NCLAT is directed to dispose of the appeal at the earliest."
12. The Hon'ble Supreme Court took the view that since no substantive order was available on 17th May, 2023, limitation will not start running from 17th May, 2023 rather it will start from 30th May, 2023 when the order was uploaded.
13. Now coming to the facts of the present case, the impugned order clearly notices that learned counsel for the applicant in I.A. No. 3445 of 2023 was present and the order was passed in presence of the learned counsel for the Appellant and by the impugned order I.A. was dismissed. In the report which has been called by this Tribunal by order dated 08.02.2024, report has stated that order was dictated in the open court. When an order is being dictated in the open court in the presence of the Learned Counsel for the Appellant, Appellant cannot be heard in saying that no substantive order was passed. Order which is being dictated in the open Court is pronouncement of the order to the knowledge of parties. In the present case when the order was passed in the presence of the learned counsel for the appellant and I.A. filed by the Appellant was rejected, it was open for the Appellant to apply for certified copy of the order diligently. Learned Counsel for the Appellant has submitted that NCLT was closed for Deepawali Vacation hence appellant could have I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -8- applied for certified copy at best on 10th November, 2023 or thereafter on 20th November, 2023 there being vacation from 11th November, 2023 to 19th November, 2023. When the order is dictated in the open court in the presence of learned counsel for the Appellant, limitation shall start running after the day of the passing of the order. In the present case, 10th November, 2023 which was a working day, mere fact that certified copy was not applied and according to the Appellant he applied for certified copy on 22nd November, 2023 in no manner help the Appellant in exclusion of the period of limitation. As per Section 12 of the Limitation Act, the period which was taken for preparation of certified copy can be excluded in the computation of the limitation. In the present case, certified copy of the order has not been annexed however according to the Appellant certified copy was applied on 22nd November, 2023 and received on 23rd November, 2023 thus at best extension of further two days could have been claimed, had the Appellant filed the certified copy of the order along with the Appeal.
14. Learned Sr. Counsel for the Appellant has also relied on Judgment of Hon'ble Supreme Court in N. Balakrishnan Vs. M. Krishnamurthy, (1998) 7 SCC 123. Learned Counsel for the Appellant relied on paragraph 11 to 13. The principles laid down by the Hon'ble Supreme Court in the above case were on the sufficient cause as contained in section 5 of the limitation act and the above were laid down for exercise of jurisdiction under Section 5 of the limitation act. There can not be any dispute to the preposition laid down by the Hon'ble Supreme Court in the above case I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -9- however present is a case where jurisdiction to condone the delay is limited by virtue of Section 61(2) proviso. This Tribunal has jurisdiction to condone the delay of 15 days after expiry of the limitation.
15. Learned Counsel for the Respondent placed reliance on Judgment of this Tribunal in Raiyan Hotels and Resorts Pvt. Ltd. Vs. Unrivalled projects Pvt. Ltd., C.A.(AT) Ins. No. 1071 of 2023, decided on 11th October, 2023. This tribunal after noticing the Judgments of the Hon'ble Supreme Court in Raja Harish Chandra Raj Singh Vs. The Deputy Land Acquisition Officer-(1962) 1 SCR 676 and Judgment of Hon'ble Supreme Court in State of Punjab Vs. Quisar Jehan Begum and Anr. - (1964) 1 SCR 971, laid down that when the orders were pronounced by the Adjudicating Authority in the presence of Learned Counsel for the Appellant the knowledge of the order has to be constructively construed on the Appellant and it is not open for the Appellant that they were not aware of the contents of the Order. In paragraph 22, following was laid down:
"22. The present is a case where order is pronounced by the Adjudicating Authority in accordance with the statutory Rules namely-- National Company Law Tribunal Rules, 2016. In the facts of both the above Appeals, we have noticed that the orders were pronounced by the Adjudicating Authority in presence of Counsel for the Appellant, thus, the knowledge of the order has to be constructively communicated on the Appellant and it is not open for the Appellant that they were not aware of the contents of the I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -10- order. Limitation for filing of the Appeal does not commence on the date when Appellant became aware of contents but it shall commence when order was pronounced."
16. Learned Counsel for the parties have also referred to the Judgment of the Hon'ble Supreme Court in the matter of V. Nagarajan Vs. SKS Ispat and Power Limited & Ors, (2022) 2 SCC 244.
17. Learned Counsel for the Appellant submits that in the above case the order was pronounced in the presence of the both the parties and Hon'ble Supreme Court held that the limitation does not commence from uploading of the order. It is submitted that Hon'ble Supreme Court observed that certified copy of the order has to be diligently applied. Learned Counsel for the Appellant submits that in the present case the Appellant did not immediately apply for certified copy of the order and after the Court opened after vacation there was only delay of one or two days in applying the certified copy of the Order on basis of which it cannot be held that Appellant was not diligent.
18. Learned Counsel for the Respondent has relied on Paragraph 32 of the Judgment and submits that mandate of the law is to impose an obligation on the appellant to apply for a certified copy of the Order. In paragraph 32 and 33, Hon'ble Supreme Court laid down following:
"32. The appellant had argued that the order of Nclat notes that 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 12-3-2020. I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -11- The appellant submitted that the suo motu order of this Court dated 23-3-2020 [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10 :
(2021) 3 SCC (Cri) 801 ("suo motu order")] , taking retrospective effect from 15-3-2020, made under Article 142 of the Constitution, extended the limitation until further orders, which renders the appeal filed on 8-6-2020 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 15-3- 2020. In this case, owing to the specific language of Sections 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 Section 12(2) of the Limitation Act, if the appellant had applied for a certified copy within the prescribed period of limitation under Section 61(2) IBC. The construction of the law does not import the absurdity the appellant alleges of an impossible act of filing an appeal against an order which was uploaded on 12-3-2020. However, the mandate of the law is to impose an obligation on the appellant to apply for a certified copy once the order was pronounced by NCLT on 31-12-
2019 [Cethar Ltd. (Resolution Professional) v. SKS Ispat & Power Ltd., MA No. 906/IB/2019 in CA No. 38/IB/2018, order dated 31-12-2019 (NCLT)] , by virtue of Section I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -12- 61(2) IBC read with Rule 22(2) of the Nclat Rules. In the event the appellant was correct in his assertion that a correct copy of the order was not available until 20-3-2020, the appellant would not have received a certified copy in spite of the application till such date and accordingly received the benefit of the suo motu order [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10 : (2021) 3 SCC (Cri) 801 ("suo motu order")] of this Court which came into effect on 15-3-2020. However, in the absence of an application for a certified copy, the appeal was barred by limitation much prior to the suo motu direction of this Court, even after factoring in a permissible fifteen days of condonation under Section 61(2). The Court is not empowered to condone delays beyond statutory prescriptions in special statutes containing a provision for limitation [Union of India v. Popular Construction Co., (2001) 8 SCC 470; Singh Enterprises v. CCE, (2008) 3 SCC 70; Chhattisgarh SEB v. CERC, (2010) 5 SCC 23; Bengal Chemists & Druggists Assn. v. Kalyan Chowdhury, (2018) 3 SCC 41 :
(2018) 2 SCC (Civ) 30] .
33. The answer to the two issues set out in Section C of the judgment--(i) when will the clock for calculating the limitation period run for proceedings under IBC; and (ii) is the annexation of a certified copy mandatory for an appeal to Nclat against an order passed under IBC -- must be based on a harmonious interpretation of I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -13- the applicable legal regime, given that IBC is a Code in itself and has overriding effect. Sections 61(1) and (2) IBC consciously omit the requirement of limitation being computed from when the "order is made available to the aggrieved party", in contradistinction to Section 421(3) of the Companies Act. Owing to the special nature of IBC, the aggrieved party is expected to exercise due diligence and apply for a certified copy upon pronouncement of the order it seeks to assail, in consonance with the requirements of Rule 22(2) of the Nclat Rules. Section 12(2) of the Limitation Act allows for an exclusion of the time requisite for obtaining a copy of the decree or order appealed against. It is not open to a person aggrieved by an order under IBC to await the receipt of a free certified copy under Section 420(3) of the Companies Act, 2013 read with Rule 50 of the NCLT Rules and prevent limitation from running. Accepting such a construction will upset the timely framework of 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."
19. As observed above, Appellant is entitled only for exclusion of period taken for preparation of certified copy as per Section 12 of the Limitation Act. Present is not a case where Appellant is claiming benefit of exclusion I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -14- of period during which certified copy was under preparation and Appellant is pressing its case on the basis of uploading of the Order on 22nd November, 2023. We thus are of the view that Judgment of the Hon'ble Supreme Court in V Nagarajan does not render any help to the Appellant nor the Judgment of the Hon'ble Supreme Court in Sanjay Pandurang Kalate comes to aid of the Appellant. As noticed above in Sanjay Pandurang Kalate both the counsels were present and there was no dispute between the counsel that no substantive order was passed on 17th May, 2023 by the Adjudicating Authority whereas in the present case order was dictated on 09th November, 2023 which is clear from the report submitted by the Registrar of NCLT. When the order was dictated in the presence of the Learned Counsel for the appellant he cannot be heard in saying that Appellant is not aware of the order and limitation shall not commence from the date of the order and the limitation shall commence only from the date when order is uploaded. We thus reject the submission of the Appellant that limitation shall commence from the date when order is uploaded. In the present case, the order having been dictated on 09th November, 2023, limitation shall commence from 10th November, 2023 and 30 days period shall come to an end on 09th December, 2023 and 15 days condonable period shall also come to an end on 24th December, 2023 whereas the Appeal was e-filed on 27th December, 2023 i.e. beyond 15 days condonable period.
20. In view of the above discussion and conclusion, the Appeal having been field beyond 15 days after expiry of the limitation, the delay I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024 -15- condonation application cannot be allowed and the same is dismissed. In result, memo of appeal is rejected.
[Justice Ashok Bhushan] Chairperson [Barun Mitra] Member (Technical) [Arun Baroka] Member (Technical) NEW DELHI 29th February, 2024 Basant I.A. No. 85 of 2024 in Company Appeal (AT) (Insolvency) No. 25 of 2024