Gujarat High Court
M/S Mekaster Engineering Limited vs M/S Hindustan Petroleum Corporation ... on 19 June, 2025
Author: Sangeeta K. Vishen
Bench: Sangeeta K. Vishen
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C/CA/1728/2025 ORDER DATED: 19/06/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CIVIL APPLICATION (FOR CONDONATION OF DELAY) NO. 1728 of
2025
In F/FIRST APPEAL NO. 6329 of 2025
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M/S MEKASTER ENGINEERING LIMITED
Versus
M/S HINDUSTAN PETROLEUM CORPORATION LTD. & ORS.
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Appearance:
MR RAHUL S. BHAVSAR(13704) for the Applicant(s) No. 1
MR.VISHAL J DAVE(6515) for the Applicant(s) No. 1
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CORAM:HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
and
HONOURABLE MR.JUSTICE MOOL CHAND TYAGI
Date : 19/06/2025
ORAL ORDER
(PER : HONOURABLE MS. JUSTICE SANGEETA K. VISHEN)
1. By this application, the applicant has prayed for
condoning the delay of 220 days caused in preferring the
appeal under section 42 of the Prevention of Money
Laundering Act, 2002 (hereinafter referred to as "the Act of
2002") against the order dated 20.05.2024 (hereinafter
referred to as "the impugned order") passed by the Appellate
Tribunal under SAFEMA at New Delhi (hereinafter referred to
as "the Appellate Tribunal") .
2. Mr.Vishal Dave, learned Advocate appearing for the
applicant submitted that the applicant was appointed as a
Liquidator of M/s. Mekaster Engineering Limited. It is next
submitted that order dated 19.09.2018 was passed by the
adjudicating authority in Original Application no.196 of 2018
permitting the respondent-Directorate of Enforcement to
retain the documents and freeze the assets and an amount of
Rs.4,04,98,451/- was frozen and hence being aggrieved M/s.
Hindustan Petroleum Corporation Limited (hereinafter
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referred to as "the HPCL") had preferred an appeal before
the Appellate Tribunal wherein, applicant was joined as
respondent no. 7. It is submitted that the applicant is
aggrieved by the impugned order considering the fact that the
amount, if is allowed to remain frozen with the enforcement
directorate, the applicant would not be able to utilize the
same and pay to the creditors, it being public money.
2.1 It is submitted that on 22.07.2024, in the 25 th
Stakeholders' Consultation Committee Meeting, the applicant
informed the creditors of the status of the impugned order
and the legality and validity was discussed and its effect as
HPCL was directed to pay an amount of Rs.3.59 crores to the
Enforcement Directorate. It is submitted that 26 th
Stakeholders' Consultation Committee Meeting was convened
on 22.11.2024 wherein, the issue of recovery of amount was
discussed and deliberated. It is submitted that the matter was
also discussed about the forum before which the order could
be challenged and ultimately, it was decided that the order
needs to be challenged before the High Court of Gujarat and
not the Delhi High Court. Thereafter, the certified copy of
judgment was applied on 05.12.2024 which was received on
09.01.2025. Subsequent thereto, in the 27 th Stakeholders'
Consultation Committee Meeting, the applicant had informed
the creditors that it is in the process of preparing, finalizing
and filing the appeal shortly. After taking necessary steps, the
appeal came to be filed on 24.02.2025. In the process there
occurred a delay of 220 days. It is submitted that the same
may kindly be condoned; however, it is fairly conceded that
considering the language contained in section 42 of the Act of
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2002, beyond the period of limitation of 120 days, the delay
cannot be condoned.
2.2 It is submitted that the judgment rendered in the case of
Union of India through Assistant Director vs. Mansukh Shah
HUF in R/Civil Application (for condonation of delay) No. 1423
of 2020, the Division Bench, has dismissed the application
and the delay was not condoned. The said order, is subject
matter of challenge before the Apex Court in Special Leave to
Appeal No. 20385-20392 of 2024 and the Apex Court, has
been kind enough to issue notice. It is therefore urged that
hearing of the captioned application, be deferred. In
alternative, it is submitted that the applicant be permitted to
file an application afresh after the decision by the Apex Court
in the said Special Leave to Appeal.
3. Heard Mr.Vishal Dave, learned Advocate appearing for
the applicant. Perused and considered the documents
available on record.
4. Initially, the applicant had preferred the captioned
application with a request to condone the delay of 220 days.
This Court, since was not satisfied with the averments made
in the application, allowed some time to the applicant to file
additional affidavit. The applicant therefore, has filed the
additional affidavit indicating the sequence of events.
Reference is made to the proceedings before the National
Company Law Tribunal, Ahmedabad initiated under the
provisions of the Insolvency and Bankruptcy Code, 2016. It is
averred that in view of the judgment of appellate tribunal,
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allowing the HPCL to return the amount, the liquidator can
now claim the same and disburse it to the creditors.
Alongwith the additional affidavit, the order dated 04.02.2025
passed by the Company Law Tribunal has been placed on
record. The application was filed by the applicant seeking
direction to the Enforcement Directorate to release the
freezed amount of Rs.4,04,98,451/- and enable HPCL to make
the payment of the said amount to the Corporate Debtor
under liquidation. The said application of the applicant, has
been rejected by the Company Law Tribunal observing thus:
"Findings: a) In order to apply relevant provisions, the RP has not
provided the relevant charge of financial creditor and the date of
finance before the stated investment of assets in order to
adjudicate if relevant provision of IBC prevails over other laws as
defined in terms of Sec 60(5) of IBC.
b) As regards freezing act undertaken during the period of
Moratorium under the provisions of IBC, 2016, freezing of the
amount due and payable by R2 even if a judicial order has only
restrained the use or sale of the machinery for a specific period of
time under PMLA Act. The Appellate Authority under PMLA has
apparently still not passed any order affecting the rights of the
applicant; hence, we d not observe any violation of provisions of
Sec 14 of the IBC, 2016."
5. Subsequent thereto, additional affidavit dated
06.05.2025, has been filed giving the sequence of events in
the tabulated form. It is averred that the appeal was filed on
24.02.2025 challenging the impugned order of the Appellate
Tribunal together with the application seeking condonation of
delay. It has been stated that the learned Advocate had
applied for certified copy on 05.12.2024 which was received
on 09.01.2025. Explanation is offered to the effect that after
passing of the order, the matter was discussed in the
Stakeholders' Consultation Committee and it was decided to
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prefer an appeal and some time got consumed.
6. From the details provided in the additional affidavit, the
following dates are undisputed;
(i) on 19.09.2018, Adjudicating Authority had passed
an order freezing the amount of Rs.4,04,98,451/- held
by HPCL due to the Corporate Debtor;
(ii) on 16.11.2018, appeal was preferred by the HPCL
before the Appellate Tribunal against the order dated
19.09.2018 passed by the Adjudicating Authority,
wherein the applicant was joined as respondent no. 7;
(iii) on 20.05.2024, the appellate tribunal passed
impugned order directing HPCL to tender an amount
of Rs.3,59,19,779/- after deducting Rs.45,78,672/-
from the total amount of Rs.4,04,98,451/- to the
Enforcement Directorate and the respondent
Enforcement Directorate, was directed to invest it in
the fixed deposit receipt for disposal of the same at
the appropriate stage.
(iv) on 22.07.2024, 25th Stakeholders' Consultation
Committee Meeting was convened where the
applicant informed creditors about the status of the
impugned order passed by the Appellate Tribunal. It
also informed that the Liquidator shall have to
recover the amount from the Enforcement Directorate
in view of the direction contained in impugned order.
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(v) on 22.11.2024, 26th Stakeholders' Consultation
Committee Meeting was convened and the matter was
discussed; further, issue was also discussed as to
which would be the correct jurisdictional forum for
preferring the appeal and it was decided that the
appeal is to be filed before the High Court of Gujarat
after obtaining the certified copy of the impugned
order from the appellate tribunal.
(vi) on 05.12.2024, the learned Advocate of the
applicant, applied for the certified copy of the
impugned order;
(vii) on 09.01.2025, the certified copy of the impugned
order was received;
(viii) on 04.02.2025, in the 27 th Stakeholders'
Consultation Committee Meeting, the applicant
informed that it is in the process of finalizing the draft
and taking steps for filing the appeal which would be
shortly done;
(ix) on 24.02.2025, after taking the necessary steps,
the appeal was filed before this Court clearly with a
delay of 220 days.
7. At this stage apt would be the provisions of section 42 of
the Act of 2002 which reads thus:
"42. Appeal to High Court.--Any person aggrieved by any
decision or order of the Appellate Tribunal may file an appeal to
the High Court within sixty days from the date of communication
of the decision or order of the Appellate Tribunal to him on any
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question of law or fact arising out of such order:
Provided that the High Court may, if it is satisfied that the
appellant was prevented by sufficient cause from filing the appeal
within the said period, allow it to be filed within a further period
not exceeding sixty days.
Explanation.--For the purposes of this section, "High Court"
means--
(i) the High Court within the jurisdiction of which the aggrieved
party ordinarily resides or carries on business or personally
works for gain; and
(ii) where the Central Government is the aggrieved party, the
High Court within the jurisdiction of which the respondent, or in
a case where there are more than one respondent, any of the
respondents, ordinarily resides or carries on business or
personally works for gain."
8. The provision clearly envisages that any person
aggrieved by any decision or order of the Appellate Tribunal
may file appeal to the High Court within sixty days from the
date of communication of the decision or order of the
Appellate Tribunal to him on any question of law or fact
arising out of such order. Proviso further states that the High
Court may if it is satisfied that the appellant was prevented
by sufficient cause from filing the appeal within the said
period, allow it to be filed within further period not exceeding
sixty days. Therefore, the powers to condone the delay in
aggregate is of 120 days. If the appeal is filed beyond the
period of 120 days, the delay cannot be condoned, in view of
the language employed in section 42 of the Act of 2002.
9. In the judgment passed by the Division Bench in the case
of Union of India through Assistant Director vs. Mansukh
Shah HUF (supra), it is held that where maximum period of
limitation is prescribed in a special statute, delay should not
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be liberally construed, if it is beyond the maximum period,
rather, cannot be condoned. Reference is made to the
judgment of the Apex Court in the case of Chhattisgarh State
Electricity Board vs. Central Electricity Regulatory
Commission and others reported in (2010) 5 SCC 23. The
Apex Court was dealing with the provision of section 125 of
the Electricity Act, 2003 which is in pari materia with the
language contained in section 42 of the Act of 2002. In
paragraph 25, the Apex Court has observed thus:
"25. Section 125 lays down that any person aggrieved by any
decision or order of the Tribunal can file an appeal to this Court
within 60 days from the date of communication of the decision or
order of the Tribunal. Proviso to Section 125 empowers this Court
to entertain an appeal filed within a further period of 60 days if it
is satisfied that there was sufficient cause for not filing appeal
within the initial period of 60 days. This shows that the period of
limitation prescribed for filing appeals under Sections 111(2) and
125 is substantially different from the period prescribed under the
Limitation Act for filing suits etc. The use of the expression `within
a further period of not exceeding 60 days' in Proviso to Section 125
makes it clear that the outer limit for filing an appeal is 120 days.
There is no provision in the Act under which this Court can
entertain an appeal filed against the decision or order of the
Tribunal after more than 120 days. "
10. Mr.Vishal Dave, learned Advocate has fairly conceded
and could not dispute the aforesaid proposition; however, only
request made is that since the proceedings are pending
before the Apex Court in connection with the challenge to the
judgment dated 18.12.2023, the hearing of the application be
deferred. In the opinion of this Court, the Hon'ble Supreme
Court has issued notice; however, there is no stay of the
judgment dated 18.12.2023 passed by the Division Bench in
connection with the self same provision.
11. In this context, apt would also be the judgment of the
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Apex Court in the case of Oil And Natural Gas Corporation
Limited vs. Gujarat Energy Transmission Corporation Ltd. and
Others reported in (2017) 5 SCC 42. The Apex Court was
dealing with an appeal preferred under section 125 of the
Electricity Act, 2003. Initially, the appeal preferred was
admitted and the delay was condoned; however, during the
subsequent hearing preliminary objection was raised that the
Court could not have condoned the delay of 71 days in view of
the language employed under section 125 of the Act of 2003.
Recall was prayed for and as a sequitur, the appeal was
requested to be dismissed. The Apex Court, considered the
provisions of section 125 and it is held and observed that on
plain reading of the provisions it is clear that if Court is
satisfied that the appellant was prevented by sufficient cause
from filing appeal within a period of 60 days from the date of
communication of its decision or order of the Appellate
Tribunal, it may allow the further period not exceeding sixty
days. It has been further held that it is quite clear that the
Court has jurisdiction to condone the delay but a limit has
been fixed by legislature i.e. 60 days. After considering the
provisions of the Limitation Act, 1963 and the judgments, the
Apex Court in paragraph 15 has observed thus:
"15. From the aforesaid decisions, it is clear as crystal that the
Constitution Bench in Supreme Court Bar Association v. Union of
India (1998) 4 SCC 409 has ruled that there is no conflict of
opinion in AR Antulay vs. RS Nayak (1988) 2 SCC 602 case or in
Union Carbide Corporation v. Union of India (1991) 4 SCC 584
case with the principle set down in Prem Chand Garg v. Excise
Commissioner AIR (1963 SC 996). Be it noted, when there is a
statutory command by the legislation as regards limitation and
there is the postulate that delay can be condoned for a further
period not exceeding sixty days, needless to say, it is based on
certain underlined, fundamental, general issues of public policy as
has been held in Union Carbide Corporation (supra) case. As the
pronouncement in Chhattisgarh SEBS v. Central Electricity
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Regulatory Commission (2010) 5 SCC 23 lays down quite clearly
that the policy behind the Act emphasising on the constitution of a
special adjudicatory forum, is meant to expeditiously decide the
grievances of a person who may be aggrieved by an order of the
adjudicatory officer or by an appropriate Commission. The Act is a
special legislation within the meaning of Section 29(2) of the
Limitation Act and, therefore, the prescription with regard to the
limitation has to be the binding effect and the same has to be
followed regard being had to its mandatory nature. To put it in a
different way, the prescription of limitation in a case of present
nature, when the statute commands that this Court may condone
the further delay not beyond 60 days, it would come within the
ambit and sweep of the provisions and policy of legislation. It is
equivalent to Section 3 of the Limitation Act. Therefore, it is
uncondonable and it cannot be condoned taking recourse to Article
142 of the Constitution."
12. It has been held and observed that when the statute
commands that the Court may condone the further delay not
beyond 60 days, it would come within the ambit and sweep of
the provisions and policy of legislation. It is equivalent to
section 3 of the Limitation Act,1963 and therefore, it is
uncondonable and it cannot be condoned taking the recourse
to Article 142 of the Constitution. Therefore, considering the
language employed under section 42 of the Act of 2002, the
High Court would not be empowered to condone the delay
beyond the period of sixty days.
13. In the present case, it is not in dispute that the
impugned order was within the knowledge of the applicant
and the aspect of challenge to the validity was discussed and
deliberated by the applicant in its 25 th Stakeholders'
Consultation Committee Meeting which was held on
22.07.2024. Subsequent thereto, in the 26 th Stakeholders'
Consultation Committee Meeting, the forum was decided and
in the 27th Stakeholders' Consultation Committee Meeting,
steps taken in furtherance of the filing of the appeal were
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discussed and ultimately, the appeal came to be filed on
24.02.2025. Pertinently, the appeal is filed beyond the period
of limitation of 120 days and hence, in view of the settled
principle so also the provisions of section 42 of the Act of
2002, this Court is of the considered opinion that the delay
cannot be condoned and hence, the captioned application
lacks merits and is hereby dismissed. No order as to costs.
(SANGEETA K. VISHEN,J)
(MOOL CHAND TYAGI, J)
SINDHU NAIR
