Ansio Industries Pvt Ltd vs CA Mahalingam Suresh Kumar & Ors.

Though the Company Appeal (AT) (CH) (INS) No. 93 / 2023, is listed for consideration of the Condone Delay Application being IA No. 327 / 2023, but, that cannot be considered until and unless, the appeal with delay condonation itself is restored to its number.

The appellant has preferred an Application being Restoration Application No. 16 / 2024, seeking recall of the order dated 04.09.2024, whereby in the absence of the appellant, the appeal was dismissed for want of prosecution. The reason for the absence has been explained by the appellant in Para 4 & 5 of the application contending, that he was on his leg before the learned NCLT, New Delhi. Hence, he could not join the proceedings before the learned NCLAT on 04.09.2024. Though, the reason given therein, does not seem to be reasonably acceptable, but, still taking a pragmatic view, the Restoration Application No. 16 / 2024, would stand allowed. The order of 04.09.2024, would hereby stand recalled. The Company Appeal (AT) (CH) (INS) No. 93 / 2023 is restored to its Original Number.

In the instant Company Appeal, the Appellant puts a challenge to an order of 24.01.2023 of NCLT, Chennai, as rendered in IA/756(CHE)/2022 in IBA/216/2019, being the proceedings held under Regulations 32(e) & (f) of IBBI Regulations, 2016. But, at this stage, before going into the merits of the controversy, which is subject of Company Appeal, we need to decide on the application for condonation of delay in filing of the Appeal.

The appellant has sought a condonation of delay in filing the appeal, which according to the Registry is that of 15 days. The reason for the delay has been explained in Para III of the application. However, the reasons given therein, do not constitute to be a valid reason for condonation of delay, except for the reason which has been given in Para III (a) & (b), which are quite vague where the Appellant contends that due to his personal exigency, he was unable to file the appeal within time.

Be that as it may, the Impugned Order which has been put to challenge was pronounced on 24.01.2023 and the Certified copy of the Impugned Judgment was issued on 08.02.2023, and the appellant has preferred the appeal on 18.03.2023. The delay which has chanced in preferring the appeal would be 15 days of delay, which is well within the Proviso to Sub Section 2 of Section 61 of I & B Code, 2016. Thus, the delay which has chanced in preferring the appeal, would stand condoned. IA No. 327 / 2023, would stand disposed of.

It is stated by the Appellant that, the Corporate Debtor was admitted into CIRP on 09.08.2019, on an application filed by the Financial Creditor i.e. State Bank of India under Section 7 of the I & B Code, 2016. Further, the learned Adjudicating Authority vide order of 17.02.2022 had approved the Resolution Plan in favour of the Appellant. But, the Appellant could only remit part of the amount, within the prescribed time, which was payable under the approved Resolution Plan. Since, he could not pay the balance in time, he filed an application IA / 756 (CHE) / 2022 in IBA No. 216 / 2019, requesting for extension of time, for remitting the balance amount due as per the Resolution Plan. This application was rejected and the Application filed by the Resolution Professional to liquidate the Corporate Debtor under Section 33(3) of I & B Code, 2016, was allowed by the learned Adjudicating Authority which, he seeks to challenge.

With the consent of the parties, the appeal itself was taken up on merits. It was argued by the learned counsel for the Respondent that, as a matter of fact, the Company Appeal has been rendered infructuous for the reason being that, in pursuance to the order of Liquidation, the Auction has taken place on 12.05.2023 and the process was completed and the sale proceeds, which was received on the sale of the Corporate Debtor, has been fully distributed.

It is submitted by the Respondent No. 1, that apart from this, the concern of the Appellant is, with regards to the forfeiture of the amount paid by him. However, the Forfeiture Clause has been contemplated under Clause 15 of the final Resolution Plan and the appellant would be bound by the same. The said clause reads as under:

Owing to the fact that the forfeiture was permissible under the terms of the Resolution Plan, that Auction has already been concluded on 12.05.2023, and that admittedly the sale proceeds have been distributed, even though, being vehemently opposed by the learned counsel for the respondent, and that, as of now, the factum of Auction being held on 12.05.2023 and the sale proceeds having been distributed is not disputed, therefore, for all practical purposes, the appeal has been rendered infructuous. Accordingly, the Company Appeal (AT) (CH) (INS) No. 93 / 2023 is dismissed as having rendered infructuous.

Company Appeal (AT) (CH) (INS) No. 47 / 2023 is listed for restoration on Restoration Application No. 17 / 2024. Be that as it may, the Impugned Order which has been put to challenge was pronounced on 24.01.2023 and the Certified copy of the Impugned Judgment was issued on 08.02.2023. Since the Appellant has preferred the Appeal on 18.03.2023, the delay which has chanced in preferring the appeal would be 15 days, which is well within the Proviso to Sub Section 2 of Section 61 of I & B Code, 2016. Thus, the delay which has chanced in preferring the appeal, would stand condoned and accordingly, IA No. 327 / 2023, would stand disposed of.

The Appellant has preferred an Application being Restoration Application No. 17 / 2024, seeking recall of the order dated 04.09.2024, whereby in the absence of the Appellant, the appeal was dismissed for want of prosecution. The reason for the absence has been explained by the Appellant in Para 4 & 5 of the application contending, that he was on his leg before the learned NCLT, New Delhi, and hence, he could not join the proceedings before the learned NCLAT on 04.09.2024. Though, the reasons given therein, do not seem to be very convincing, but, still taking a pragmatic view, the Restoration Application No. 17 / 2024, would stand allowed. The order of 04.09.2024, would hereby stand recalled and the Company Appeal (AT) (CH) (INS) No. 47 / 2023 is restored to its Original Number.

The learned counsels for the parties have agreed, that the appeal would be considered on its merits. The learned counsel for the Respondent has submitted that, by virtue of the Impugned Order under challenge, the prayer of the Appellant in IA No. 985 (CHE) / 2022, to grant time to pay the balance amount payable under the approved Resolution Plan was denied and the consequential order under Section 33 to liquidate the Corporate Debtor in a manner laid down in Chapter III Para II of the Code was passed. The rejection of the aforesaid IA has been done on grounds as assigned by the learned Tribunal in Para 12 onwards contending thereof that owing to Clause 15 of the Resolution Plan which mandates the timeline and the Forfeiture Clause, its invocation does not suffer from any apparent error. Since admittedly, the Appellant has not paid the amount as mandated to be paid under the Resolution Plan, extension of time to pay the same could not have been granted. Further, since the Forfeiture Clause was already built into the Resolution Plan itself, the forfeiture of the amount paid by the Appellant could not be said to be illegal.

Apart from it, the learned counsel for the Respondent has submitted that, as of now, no cause survives owing to the fact that, Auction has already been held on 12.05.2023, and the sale proceeds have been distributed. Hence, Company Appeal (AT) (CH) (INS) No. 47 / 2023, would be dismissed as having rendered infructuous, with an efflux of time.