The NCLAT, Chennai dismissed an appeal that was filed one day late from the prescribed period of limitation because the Appellants did not adhere to the tone and tenor of the Judgement of the Hon’ble High Court.
It was opined that the High Court had granted 2 weeks to prefer an appeal before the Appellate Tribunal, however, the Appellants filed the appeal one day late, and therefore, the appeal was dismissed.
Brief Facts:
The Appellants have filed the application against the order of the Adjudicating Authority i.e., NCLT vide which the adding of personal properties of the Appellants into the Liquidation Estate of the Corporate Debtor was allowed.
The Appellants argued that as per Section 61 of IBC the Appeal against an order of NCLT should be filed within 30 days from the date of receipt of the order. The Appellants had filed a writ petition before the High Court as they were advised that the NCLT had no jurisdiction to pass the order. But the writ petition was dismissed. An appeal was also filed against the said decision but that also got dismissed.
Contentions of the Appellant:
The Appellants contended that the order was passed in the Writ Appeal stating that the period spent before the High Court would be taken note of by the NCLAT while considering the petition or condonation of delay.
The Appellants argued that the Appellate Tribunal can condone the delay if sufficient cause is shown for a period not exceeding 15 days. The Appellant contended that the period of 147 days should be excluded from the computation of the Period of Limitation. If such a period was condoned then the Appeal would be within the prescribed period.
Contentions of the Respondent No. 1:
It was contended that the Appellants intentionally filed an appeal before the High Court despite knowing that any appeal against the order passed by NCLT would lie as per Section 61 of the IBC.
It was argued that the Appellants did not take any effective steps and an appeal must have been filed within 2 weeks from the date of the order. Therefore, the present Application is bad in law.
It was further contended that the Appellants did not file the Certified Copy of the order along with the present application and this would be fatal to the case of the Appellants.
Contentions of the Respondent No. 3:
It was argued that instead of filing an appeal, the Appellants filed a writ petition before the High Court. The High Court had given 2 weeks to the Appellants to file the appeal before the Appellate Tribunal, but the Appellants have caused a further delay in filing the same.
Observations of the Tribunal:
The Tribunal remarked that the issue of ‘Limitation’ is an issue of Jurisdiction. Section 3 of the Limitation Act, 1963 bars the Court to entertain suit and application if it is barred by Limitation.
Further, it was noted that Section 410 of the Companies Act, 2013 provides for the constitution of the National Company Law Appellate Tribunal which is empowered to adjudicate on Appeals filed against the order of the National Company Law Tribunal.
In the present case, the Appellants were allowed to file an appeal after condonation of delay on grounds of Bonafide Litigious Activity, Good Faith, and Due Diligence.
However, the Tribunal noted that the High Court had permitted the Appellants to file an appeal within 2 weeks and the last date as per this was 05.07.2022. But, the Appellants have preferred an appeal on 06.07.2022. There is a delay of one day. The Appellate Tribunal opined that the Appellants have not adhered to the tenor and spirit of the judgment of the High Court as they filed an appeal one day late.
The decision of the Tribunal:
Therefore, since the appeal was filed beyond the prescribed time limit granted by the High Court, the NCLAT rejected the appeal.
Case Title: M.K. Resely & Ors. V. Union Bank of India & Ors.
Coram: Hon’ble Mr. Justice M. Venugopal (Judicial Member), Mr. Naresh Salecha (Technical Member)
Case No.: Company Appeal (AT)(CH)(Ins) No. 337/2022
Advocate for Appellants: Adv. Mr. S. Easwaran
Advocates for Respondents: Advs. Mr. Varun Srinivasan, Mr. Shinu J. Pillai, Mr. A.G. Sathyanarayana
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