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Judgment
ORDER
Oral Judgment: Justice Sharad Kumar Sharma Member (Judicial)
The instant Company Appeal, as preferred by the Appellant is by invoking the provisions contained under Section 61 of the I & B Code, 2016, to put a challenge to the Impugned Order 04.03.2023, as passed by the National Company Law Tribunal, Kochi Bench in IA(IB)/33/KOB/2023 in IA(IBC)/106/KOB/2021 in IBA/52/KOB/2019. Besides this, by virtue of the Impugned Order in Appeal which, was preferred under Section 42 of the I & B Code, it accompanied with it a Delay Condonation Application thereby seeking condonation of 22 days of delay, which has chanced in preferring the Appeal under Section 42 of the I & B Code. The Learned Adjudicating Authority while considering the reasons assigned in the Delay Condonation Application had condoned the same, and had remanded the matter back to the Liquidator to decide the claim of the Respondent after considering the material which were placed on record by the Appellant before the NCLT in the proceedings under Section 42, to be considered on merits. It is this order which is under challenge. The relevant direction of remand as contained in Para 28 of the Impugned Judgment is extracted hereunder: -
“28.In these circumstances and noting the fact that the delay of twenty-two days in filing the appeal under section 42 against the decision of the liquidator rejecting the claim of the appellant has been condoned by the Tribunal, the is hereby respondent directed to reconsider the claim of the appellant afresh, taking all materials and particulars submitted by the appellant into consideration. The respondent is to pass appropriate orders taking into consideration the observations in this order and in accordance with the law. Thus, this is ordered and application disposed of”.
Under the I & B Code, Section 42 contemplates a provision of appeal as against the decision of the liquidator of rejecting the claim or accepting and the limitation prescribed therein is 14 days from the date of the receipt of such decision of the Liquidator.
The Appellate Provision under Section 42, where it prescribes a limitation of 15 days, against the order of liquidator, it does not prescribe it as to be the upper limit, as can be seen from the description of the provision vis-à-vis the description of such provision in Section 61(2), where the phrase ‘shall not exceed 15 days’ is used. This implies that this period can be extended by the Tribunal, by invoking the provisions contained under Section 238A of the I & B Code, by virtue of which the provision of the Limitation Act has been made applicable. Once the provision of the Limitation Act has been made applicable, the aspect of delay has to be pragmatically considered so as to enable the lis to be decided on merits and a rigid formula-based principles should not be adopted for rejecting the proceedings and that too at the Appellate stage consequently closing the door of an adjudication of the claim raised by the Respondent, by the closure of an Appeal under Section 42 on the ground of limitation.
When the aspect of limitation under Section 238A, is called for to be considered there has had to be a rational and pragmatic approach which is to be adopted by the Tribunal, which is adjudicating a material right of a party, who is likely to be affected by any order, which could have been otherwise passed on merit.
In fact, the Impugned Order as it would be apparent from Para 28, which has been extracted above, it is not at all prejudicial to the rights of the Appellant for the reason being that it only results in the revival of the proceedings against the rejection of the claim by the liquidator, which is to be decided on its own merit. The opportunity for the Appellant to contest the claim of the Respondent, at the stage of liquidator is not closed; rather it is still open to be enforced by the Appellant herein on its own merit. Apart from this, since the Impugned Order which is under challenge, is more or less in the shape of the order of remand, and since it is not deciding a lis on merits against on its own merit, which is still left open to be decided by the liquidator, no material right of the Appellant is being prejudiced by the Impugned Order, where 22 days of delay in preferring the Appeal under Section 42 has been condoned and the matter has been remitted back to be decided on its merits. For the reasons aforesaid, we don’t find any merit in the Appeal, the Appeal would stand dismissed.