Mr. Sutanu Sinha vs Life Insurance Corporation Of India

Justice Sharad Kumar Sharma, Member (Judicial):

The Appellant (Liquidator) in the instant Company Appeal (AT) (CH) (INS) No.90 / 2022, puts a challenge to an order dated 02.02.2022 passed on IA No. 1154 / 2020 in CP (IB) No. 294 / 7 / HDB / 2017, whereby the learned Adjudicating Authority i.e. National Company Law Tribunal, Hyderabad Bench, by virtue of the impugned order had proceeded to condone the delay and had permitted the Applicant / Respondent in this Appeal to lodge their claim, before the Liquidator.

Extensive arguments on the facts and on the aspects of law have been made by the learned Counsels for the parties, particularly, in the light of the implications of the insertions made to the provisions contained under Regulation 21A, as it stood inserted with effect from 25.07.2019 i.e. the date prior to the Order of Liquidation i.e. 26.07.2019.

The consequential effect of the amendment by way of insertion has been that claims need to be submitted in different format of Form D, for the purposes of relinquishment of waiver of security interest in the Corporate Debtor and for that purpose, the amended Form D contains an amended Clause 8A, which needs to be filled up accordingly.

The Appellant submits that, since the Respondent had failed to submit the requisite information in the amended Form D, within the time period prescribed, he will not be entitled to retain his security interest and realise the same outside the Liquidation Estate in view of the limitations prescribed in the proviso to 21(A)(1).

The learned Counsel for the Respondent argues to the contrary that the delay is condonable on the basis of various communications made by the Liquidator himself which supports his case and it has been condoned by the learned Adjudicating Authority. The same has been vehemently opposed by the Applicant’s Counsel, in the lines of the objection filed by him to the IA No. 1154 / 2020 filed by the Respondent before NCLT and he contends that all his contentions raised in his pleadings pertaining to the effect of the insertion to the provisions contained under the Regulation 21A and its implications qua the date of Liquidation and the various communications referred to by him in the objection has not been considered by the learned Adjudicating Authority, while condoning the 42 days of delay chanced in preferring the claim the Respondent herein / LIC in submission of amended Form D contemplated under Regulation 21A.

We are of the view that a lis between the parties and particularly, that which entails an appreciation considerable amount of facts and evidence, should be appropriately considered by the Principal Court itself, because it can best appreciate the evidence, after applying its mind and give its verdict by appreciation of the rival contentions and evidence put forth, as to whether at all under the given set of circumstances and particularly the one as argued by the learned Counsel for the Respondent, where the insertion of Regulation 21A being recent in time, they didn’t have the knowledge about the amended Form D and hence, the Form D in its correct version could be submitted with a delay, the particular prayer can be permitted.

However, in this case, after hearing the learned Counsels for the parties at length and after giving a thoughtful consideration to the implications of Regulation 21A qua the amended Form D on the Liquidation process and to the arguments extended by the learned Counsel for Respondent in respect of the objections placed on record in his counter to the Company Appeal, we are of the view that an Application seeking for a condonation of delay itself is to be considered by the learned Adjudicating Authority on its own merits, that there has to be a judicial propriety to the impugned order passed on IA No. 1154 / 2020 and that as the issue of limitation was vehemently contested by the Appellant herein, before the learned Adjudicating Authority, though, denied by the Respondent’s Counsel, the learned Adjudicating Authority, in all its fairness should have considered the rival contentions, with regard the condonation of delay as pleaded by the Appellant in his objection and should have recorded its finding, for either accepting or rejecting the reasons given by the Respondent in seeking condonation of delay for the purposes of invocation of benefit of Regulation 21A in the light of the amended Form D.

We make it clear that we are refraining to record any finding on the merits of the matter particularly the facts and documents which has been brought on record by the parties to the Appeal, exclusively because of the fact, since, the Impugned Order, which will affect the very genesis of the proceedings, is a non-speaking order, without explicitly considering the relevant documents which has been placed on record, it cannot be sustained in the eyes of law and a fresh decision needs to be taken in the form of a speaking order. However, even though the point of determination may be limited to the aspect of Limitation as involved herein, the Appropriate Forum available to the parties would be to place their respective cases before the Tribunal itself, either in support or in opposition to the Condone Delay Application, along with their respective documents and pleadings in support of their cases and it will be the learned Adjudicating Authority who has to take a call upon it, by considering the respective cases and pleadings and then passing an appropriate order on IA No. 1154 / 2020.

Since, IA No. 1154 / 2020, stood adjudicated by the Impugned Order of 02.02.2022 by the learned Adjudicating Authority, along with the other Interlocutory Applications, only that part of the order relating to IA No. 1154 / 2020 would hereby stand quashed and accordingly, the IA No. 1154 / 2020 is hereby remitted back to be decided afresh, with a request to the learned Adjudicating Authority, to decide the Condone Delay Application within a period of 6 weeks, from the date of presentation of the Certified Copy of this Judgment. It goes without saying that whatsoever observation we have made in this Judgment may not be construed to have addressed any opinion on merits of the matter and the Condone Delay Application is to be considered exclusively based on the merits.

Subject to the aforesaid, the Company Appeal (AT) (CH) (INS) No. 90 / 2022, would stand allowed. The connected pending Interlocutory Applications, would stand disposed of.