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Judgment
ORDER
Oral Judgment: Justice Sharad Kumar Sharma Member (Judicial)
The Appellant to this Company Appeal, has preferred this Appeal by invoking the provisions contained under Section 32 to be read with Section 61(3) of the Insolvency and Bankruptcy Code, 2016, whereby the Appellant has given the challenge to the Impugned Order of 01.05.2023, as it has been passed by the Learned Adjudicating Authority on IA No.503/2023 as preferred in CP(IB) No.28/7/HDB/2022, which is said to be an order passed under Subsection (1) of Section 31 of the I & B Code, thereby consequently approving the Resolution Plan. This matter was heard at length and all the Counsels for the Parties have addressed their respective cases on merits and ultimately upon consideration of their arguments, the question which has emerged for consideration is as to whether the Company Appeal would be barred by limitation or not. Initially, when the Appeal was preferred, the Appellant did not file the Delay Condonation Application but owing to the objection made by the Respondent’s Counsel, we have passed an Order on 14.06.2024 which reads as under: -
“14.06.2024:
As against the impugned order of approval of Resolution Plan, under Section 31 the same is appealable under Section 32 of the Insolvency and Bankruptcy Code, 2016. It is argued by the Learned Counsel for the Appellant, that the Preliminary Objection taken by the Respondent that there is no Delay Condonation Application which has been filed in support of the appeal, the appeal deserves dismissal because that, despite of the fact, that it is reported by the Registry that there is a delay of 299 days.
It is contended that in the absence of there being any limitation prescribed under law, there is no delay, no delay consideration application is required to be filed.
But, in order to elaborate on the issue, the Learned counsel for the Appellant is directed to file a Delay Condonation Application, giving his all probable reasons in support of this contentions, as to whether there would be any delay or limitation for the purpose of an Appeal under Section 32 or not”.
In fact, by virtue of the said order, the Learned Counsel for the Appellant thought it appropriate to file the Delay Condonation Application for the purposes of explaining 229 days of delay, which has chanced in preferring the Appeal as against the Impugned Order which is much beyond the prescribed condonable period under Section 61(1) and 61(2) of the I & B Code.
The Registry has reported that since the Appeal has been preferred under the conjoint provisions of Section 32 to be read with Section 61(3) of the I & B Code, 2016, since the Impugned Order happens to be of 01.05.2023 and the period of limitation would be expiring on 31.05.2023, and since e-filing of the Company Appeal was done on 15.01.2024, the Appeal would be held to have been filed with a delay of 229 days.
The Learned Counsel for the Appellant in his Delay Condonation Application has submitted that, since the Appeal is being filed within the ambit of the provisions of Section 32 of the I & B Code read with Section 61(3) and since Section 32 itself does not prescribe for any period of limitation for preferring of an Appeal, as against the order of approval of the Resolution Plan, under Subsection (1) of Section 31 of the I & B Code, no independent Delay Condonation Application is required to be preferred, and that, without prejudice to the said contention he is providing sufficient cause to show that the present Appeal is filed within a reasonable time and delay, if any, ought to be condoned in view of the facts and circumstances of the case.
This argument was vehemently opposed by the Respondent’s Counsel on the ground that the provisions contained under Section 32 will have to be read not independently but rather in correlation with the provisions contained under Subsection (3) of Section 61, which prescribes for the ground for the purposes of preferring of an Appeal under Section 32 of the I & B Code and as a consequence, the provisions of Section 61 and particularly that of Section 61(2) dealing with the aspect of limitation will come into play. Based on the aforesaid rival contentions the prime question which emerges for determination before this Appellate Tribunal is as to whether, when the Appellant himself has preferred the Appeal by invoking the provisions of Section 32 to be read with Section 61(3) of the I & B Code, whether the Appeal would be barred by limitation as laid down in Section 61(2) of the I & B Code, 2016. Before we dwell with the respective arguments extended by the Learned Counsels for the parties, the facts of the case need to be laid out, hereunder to facilitate the determination to be made by us on the aspect of limitation in this case.
The brief facts which engage consideration in the Company Petition itself are the following:
On 25.03.2010, the Appellant and Respondent No.1 had entered into a concession agreement by way of Package No. NS-II/BOT/TN-08, for the purposes of implementing the two projects:
Six Laning from 102.035 Km to 144.680 Km on the Chengapalli to the Start of Coimbatore Bypass.
The Four Laning from 170.880 Km to 183.010 Km on the end of Coimbatore Bypass to TN/Kerala Border Section of NH-47 being the part of the projects of NH-47.
In accordance with the terms of the Package Contract of 25.03.2010, the work of the two projects was scheduled to be completed by 07.03.2013.
The Appellant issued a Provisional Completion Certificate to Respondent No.1 on 09.10.2015. Under the Concession Agreement, Respondent No.1 was to pay a premium on annual basis running into crores and escalating every year. Upon the request by Respondent No.1, the Appellant, by a letter dated 06.05.2016 deferred the payment of part of the premium payable on yearly basis to NHAI by Respondent No.1, for the period 2015-16 to 2025-26, the total amount of such deferred premium being Rs.303.01 crores and a Supplementary Agreement was executed on 15.12.2016. Subsequently on grounds of non-compliance of the terms and conditions under which the said deferment was granted, the Appellant withdrew the deferment of premium as granted by them on 06.05.2016 vide letter dated 25.03.2021 and pressed for payment of the full amount along with the interest, as per the Concession Agreement. Meanwhile NCLT, Hyderabad Bench, admitted a Company Petition under Section 7 of the I & B Code against the Respondent Company R1 and ordered commencement of CIRP by an Order dated 20.04.2022 and appointed Respondent No.2 as IRP. The Resolution Professional R2 invited claims as against R1 (Corporate Debtor) from all stakeholders including the Appellant and advised the Appellant to submit its claim in Form H. The Appellant submitted a claim of Rs.4,31,70,84,593/- before R2 on 13.08.2022 which was further revised to Rs.444,90,71,717/- on 14.10.2022. The Respondent No.2 admitted the claim restricting it to Rs.400,02,29,332/-. Several meetings between the Appellant and Respondent No.2 are said to be held during this process. The Respondent No.2 being the Resolution Professional, collected all such claims, prepared the Resolution Plan, took approval of Committee of Creditors of the said Resolution Plan and preferred an Application IA No.505/2023 being an Application preferred under Subsection (1) of Section 31 of the I & B Code to be read with Section 394 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016, in CP/28/7/HDB/2022 before NCLT Hyderabad, seeking approval of the Resolution Plan. The said Resolution Plan was approved by the National Company Law Tribunal, Hyderabad vide Order dated 01.05.2023. It is this order which has been subjected to the instant Appeal.
The Appellant’s Counsel contends that the instant Appeals falls within the ambit of Section 32 to be read with Section 61(3). He goes on to argue that in view of the simpliciter language used under Section 32 of the I & B Code, which reads as under: -
“32.Appeal – Any appeal from an order approving the resolution plan shall be in the manner and on the grounds laid down in subsection 3 of section 61”,
the Appeal against the order of approval of the Resolution Plan under Subsection (1) of Section 31, is to be made under Section 32 of I & B Code, on the basis of the grounds available under Sub Section (3) of Section 61 and since the legislature consciously had not prescribed any period of limitation under Section 32, there is no delay in filing of the instant Appeal and that no independent application for Condonation of Delay is required to be preferred.
The aforesaid stand taken by the Appellant is vehemently opposed by the Counsel for the Respondents on the ground that, the Appellant has misinterpreted the provisions contained under Section 32, that though Appeal has to be made against orders passed under Section 31 under Section 32, the same cannot be done independently and in exclusion of the provisions contained under Section 61 of the I & B Code, that Section 61(3) has no independent existence and that, once the provisions under Section 32 of I & B Code draws upon the provisions of Section 61(3), the provision contained under Section 61(1) and Section 61(2), will come into play and in that eventuality, the time taken to file an Appeal including delay if any has to be considered in the light of the provision contained under Section 61(2) for the purposes of admitting an Appeal before this Appellate Tribunal as against the order passed under Subsection (1) of Section 31 of the I & B Code. The basic fabric of the argument of the Learned Counsel for the Respondent is that if Section 61 itself taken in its entirety which is extracted hereunder: -
“61.Appeals and Appellate Authority – (1) Notwithstanding anything to the contrary contained under the Companies Act 2013 (18 of 2013), any person aggrieved by the order of the Adjudicating Authority under this part may prefer an appeal to the National Company Law Appellate Tribunal.
(2)Every appeal under sub-section (1) shall be filed within thirty days before the National Company Law Appellate Tribunal: Provided that the National Company Law Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days.
(3)An appeal against an order approving a resolution plan under section 31 may be filed on the following grounds, namely:-
(i)the approved resolution plan is in contravention of the provisions of any law for the time being in force;
(ii)there has been material irregularity in exercise of the powers by the resolution professional during the corporate insolvency resolution period;
(iii)the debts owed to operational creditors of the corporate debtor have not been provided for in the resolution plan in the manner specified by the Board;
(iv)the insolvency resolution process costs have not been provided for repayment in priority to all other debts; or
(v)the resolution plan does not comply with any other criteria specified by the Board.
(4)An appeal against a liquidation order passed under section 33 may be filed on grounds of material irregularity or fraud committed in relation to such a liquidation order”,
it can be observed that the provisions of Subsection (1) of Section 61 starts with a non-obstante clause and hence it has its independent existence providing thereof that, any person aggrieved by any order passed by the Learned Adjudicating Authority ‘under this part’ may prefer an Appeal to the NCLAT. The Counsel for the Respondent attempts to drive home the point that the use of the word, ‘under this part’ would obviously mean that since the provisions contained under Section 31(1) and the appellate provisions under Section 32 and Section 61, form to be part of the provisions contained under Chapter II, in that eventuality, the provision of Section 61 would be applicable in its entirety including those cases where the Appeal is preferred under Section 32, which has to be read in conjunction with Section 61 and that, the provisions of Section 61(1) and Section 61(2) cannot be read in exclusion of the provision of Subsection (3) of Section 61, as it has been provided under Section 32. Accordingly, an Appeal to be preferred under Section 32 on the grounds prescribed under Subsection (3) of Section 61 of the I & B Code will be governed by the provisions of Section 61 in its entirety, particularly when Section 32 forms to be the part of Part II of I & B Code of which Section 61 too is a part.
If Subsection (3) of Section 61 is taken into consideration, it only lays down the modalities and the grounds on which a Resolution Plan which approved by the Learned Adjudicating Authority under Section 31(1) of I & B Code could be subjected to an Appeal. Therefore Subsection (3) of Section 61 of I & B Code, even when attracted by virtue of Section 32, cannot be operated in exclusion to the provisions contained under Subsection (1) and Subsection (2) of Section 61 of I & B Code and as a consequence thereto the period of limitation as prescribed under the self-contained provision under Section 61(2) will start to operate. Since Section 61 commences with the non-obstante clause, it would be attracted for the purposes of determination of limitation in the case of an Appeal being filed under Section 32, and for that purpose, Section 32 has to be read in harmony with the provision contained under Section 61 of the I & B Code. The aforesaid aspect about the applicability of Section 61(1) and Section 61(2) for the purposes of an Appeal under Part II of the Code, was considered in the matters of Company Appeal (AT) (Ins) No.160/2017, Principal Director General of Income Tax Admin. And TPS Vs Spartak Ceramics India Ltd. & Anr. In the Judgment thus reported in 2018 SCC Online NCLAT 617, the three-Judges Bench has observed vide Para 49 & 50 of the said Judgment, that Section 32 of the I & B Code, lays down how an appeal against an Order of approval of the Resolution Plan passed by the Learned Adjudicating Authority under Section 31 is to be made and that such Appeal has to be made in the manner and grounds laid down in Subsection (3) of Section 61, and therefore for said purpose the provisions of Section 61 has to be read in its entirety. Para 49 of the said Judgment is extracted hereunder:-
“49.Section 32 of the ‘I & B Code’ relates to ‘grounds of appeal’ against an order passed by the Adjudicating Authority approving the ‘Resolution Plan’ in the manner and the grounds laid down in sub-section (3) of Section 61, and reads as follows:
32.Appeal – Any appeal from an order approving the resolution plan shall be in the manner and on the grounds laid down in subsection 3 of section 61”.
The three-Judges Bench of the Principal Bench, NCLAT have further held vide Para 50 of the same Judgment that an Appeal under Section 32 of the I & B Code, as against the order passed by the Learned Adjudicating Authority approving the Resolution Plan, though it has been prescribed to be preferred in the manner and on the grounds laid down under Subsection (3) of Section 61 of I & B Code, would not be in exclusion to the provisions contained under Section 61(2). Para 50 of the said Judgment is extracted here under:-
“50.From the aforesaid provision, it is clear that the grounds to prefer appeal under Section 61 of the ‘I&B Code’ against an order of approval of plan passed by the Adjudicating Authority under Section 31, should be such as mentioned in sub-section (3) of Section 61. As per sub-section (2) of Section 61, the appeal is required to be filed within thirty days before the NCLAT. The Appellate Tribunal is empowered to condone the delay of ‘another fifteen days’ after the expiry of the period of thirty days in preferring this appeal that too for sufficient cause. It has no power to condone the delay if appeal under Section 61 is preferred beyond fifteen days from the date of the expiry of the period of thirty days. Meaning thereby, no appeal under sub-section (1) of section 61 can be entertained after forty-five days of knowledge of the order passed by the Adjudicating Authority”.
The Counsel for Appellant has further contended that even if the limitation under Section 61 of I & B Code, is attracted in the instant case, the same can be dealt with by this Tribunal by invoking the provisions contained under Rule 11 of NCLAT Rules, 2016, and that, in view of quantum of public money involved, this Tribunal can involve its inherent powers under the said Rule 11 to create an exception to the provisions of Section 61 with respect to limitation and admit the Appeal especially when no limitation has been expressly provided in Section 32. At this stage, it may be noted that the powers of framing of the Rules under this Code including Rule 11 have been derived under Section 469 of the Companies Act, 2013. If Rule 11 itself is taken into consideration it deals with the grant of inherent powers in these rules which will not limit the exercise of powers of the Appellate Tribunal under the said Rules. The relevant portion of Rule 11 is extracted hereunder: -
“11.Inherent Powers:- Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Appellate Tribunal to make such orders or give such directions as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal”.
However, the provision contained under Rule 11 cannot come to the rescue in the instant case for the reason being that the Rule in itself cannot override the provisions of the principal statute since being the subordinate legislation framed under Section 469 of the Companies Act, 2013. Once the implications of Rule 11, are taken into consideration from the viewpoint that given the Appellate Provisions of Section 61 starts with a non-obstante clause and it is part and parcel of the principal statute and Part II thereof, the exercise of inherent powers under Rule 11 cannot be done for the purposes of doing away with the period of limitation prescribed under Section 61(2) of the Code for the delay which has chanced in preferring the Appeal. The Counsel for the Appellant has tried to convince us that the exercise of the inherent powers under Rule 11 of the Rules of 1961, is similar to the provisions contained under Section 151 in the CPC and hence can be exercised to overcome limitation laid down in Section 61(2) of the I & B Code. However, we need to keep in mind that the Hon’ble Apex Court has already dealt with this aspect, that is, the scope of exercise of powers under the saving clause of Section 151 of the Civil code of the procedure in the Judgment reported in (2010) Volume 8 SCC Page 1, Vinod Sethi Vs Devinder Bajaj and Another. In the said judgement, Hon’ble Apex Court has laid down as to up to what extent the latitude could be provided to the savings clause of Section 151 of CPC. The relevant paragraphs 28, 29, 30, 31 & 32 are extracted hereunder: -
“28.As the provisions of the Code are not exhaustive, Section 151 is intended to apply where the Code does not cover any particular procedural aspect, and interests of justice require the exercise of power to cover a particular situation. Section 151 is not a provision of law conferring power to inherent power of the court to make such orders as may be necessary for the ends of justice and to prevent abuse of the process of the court. It cannot be invoked with reference to a matter which is covered by a specific provision in the Code, It cannot be used either to create or recognize rights, or to create liabilities and obligations not contemplated by any law.
29.Considering the scope of Section 151, in Padam Sen v. State of U.P. this Court observed: (AIR p. 219, paras 8-9)
“8.…The inherent powers of the court are in addition to the powers specifically conferred on the court by the Code. They are complementary to those powers and therefore it must be held that the court is free to exercise them for the purposes mentioned in Section 151 of the Code when the exercise of those powers is not in any way in conflict with what has been expressly provided in the Code or against the intentions of the legislature….
9.….The inherent powers saved by Section 151 of the Code are respect to the procedure to be followed by the Court in deciding the cause before it. These powers are not powers over the substantive rights which any litigant possesses. Specific powers have to be conferred on the courts for passing such orders which would affect such rights of a party”.
30.In Manohar Lal Chopra v. Seth Hiralal this Court held: (AIR p. 533, para 21)
“21.…that the inherent powers are not in any way controlled by the provisions of the Code as has been specifically stated in Section 151 itself. But those powers are not to be exercised when their exercise may be in conflict with what had been expressly provided in the Code or against the intentions of the legislature.”
31.In Ram Chand and Sons Sugar Mills (P) Ltd. v. Kanhayalal Bhargava this court reiterated that the inherent power of the court is in addition to and complementary to the powers expressly conferred under the Code but that power will not be exercised if its exercise is inconsistent with, or comes into conflict with any of the powers expressly or by necessary implication conferred by the other provisions of the Code. Section 151 however is not intended to create a new procedure or any new right or obligation.
32.In Nain singh v. Koonwarjee this Court observed: (SCC p. 735, para 4)”.
The provision of Rule 11 has to be interpreted in a manner similar to the meaning assigned to section 151 of CPC by the Hon’ble Apex Court. The aforesaid conclusion arrived at by the Hon’ble Apex Court has clearly laid down that the inherent powers of the Court / Tribunal are in addition and not in exception to the powers specifically conferred on the Court / Tribunal by the I & B Code, and that they are complimentary in nature and they do not have any independent existence, as such, therefore in the instant case, when field of law is covered by the Principle statute, in relation to the aspect of limitation which already stands covered under the provisions contained under Section 61, as per the ruling of the Judgment of the Vinod Sethi supra, the provisions contained under Rule 11 of NCLAT Rules, is not to be exercised to override the provision of Section 61(2) of the Code to condone the delay chanced in filing of the Appeal preferred under Section 32 of the I & B Code. Therefore, the provisions contained under Subsection (3) of Section 61, have to be read in harmony with the provisions of Section 61(1) and Section 61(2) and in view of the ratio laid down by the Principal Bench, the provisions of the Section 61 and Section 62, would not be excluded but rather would be attracted to be applied in relation to the Appeals including the instant case which are preferred under Section 32, of the I & B Code.
The Appellant in his Application seeking Condonation of Delay has contended that since the Appeal being an appeal preferred under Section 32 is to be read with Section 61(3) and since a challenge is being given to the order passed under Section 31 approving the Resolution Plan by the Learned Adjudicating Authority, the delay of 229 days, in filing the Appeal ought to be condoned by exercising powers under Rule 11, since Section 32 has not expressly set any time limit and the field being open, powers under Rule 11 can be exercised. The Appellant has further contended that the Respondent's contention that the delay of 299 days will create an embargo of limitation in the light of the provisions of Section 61(2) of the I & B Code, will not be applicable because, the Appeal has been preferred under Section 32 of I & B Code, which in itself does not contemplate a period of limitation. He has further contended that as the powers under Section 31 of I & B Code, are inherently different from the other powers for issuing the directions and the orders that are conferred under the IBC, that an order under Section 31 is final in nature, in as much as it brings the CIRP Process to a conclusion with approval of Resolution Plan, whereas the other orders and decisions passed under other sections of the IBC are merely orders, in the aid of the orders to be passed under Section 31 and as the period of limitation has not been specifically prescribed under the statute, therefore limitation would not be attracted. The specific pleading in that regard has been made in Para 6 of the Delay Condonation Application which is extracted hereunder: -
“6.The Legislature has deliberately created two distinct types of appeals within the Corporate Insolvency Resolution (CIR) process. While Section 61(1) specifies that appeals from all other orders, directions and decisions are subject to a limitation period outlined in Section 61(2), Section 61(3) distinctly allows for appeal against orders approving a resolution plan without a specified limitation period. This exception underscores the Legislature’s clear intention to distinguish these appeals due to their unique nature. Notably, Section 61(1) commences with a non-obstante clause only regarding the Companies Act 2013, indicating that the IBC may establish different or no limitation periods for such appeals, further emphasizing the legislative intent to treat these appeals differently”.
Thus he claims that since section 61(3) of the Code does not refer to any limitation period, therefore no limitation is applicable for appeal filed under Section 32 of the Code, that Section 61(3) is a complete code laying down entire procedure for appeals from plan approval orders and that specific provision will prevail over the general provisions of Section 61(2).
Another ground which has been taken by the Appellant is that the acts of fraud committed by the Resolution Professional prevented him from filing his appeal in time and therefore the delay ought to be condoned. He contends that, the RP deliberately concealed the fact of cancellation of deferment of Premium by NHAI from the resolution plan deliberations, misled him into filing his claim in Form F thus relegating him into the category of ‘Other Creditors’ and depriving him a seat in the Committee of Creditors (CoC), misled the Adjudicating Authority into approving a Resolution plan where the original concession agreement is sought to be materially amended without his knowledge and provided the approved Resolution Plan to him, the Appellant on 79th day from the date of order, thus playing a fraud on him. He contends that he could initiate the Appeal only upon the disclosure of the fact of the approval of the Resolution Plan, that act of keeping him in the dark is an act of fraud and therefore the delay is being sought to be reasonably condoned because of the fact that he could not diligently peruse the Judgment in time and take necessary ameliorative steps. As far as the commission of fraud or ignorance of the Impugned Judgment is concerned, the same cannot be taken as a recuse, to override the period of limitation prescribed under Subsection (2) of Section 61, for the reason being that, in the instant Appeal there happens to be an inordinate delay of about 229 days which is much beyond the period prescribed under Subsection (2) of Section 61 which has been made applicable in the view of the ratio propounded by the Principal Bench of the NCLAT. Even otherwise also, the time taken in filing the Appeal from the date of knowledge of the impugned Order is also substantial and beyond the time limit prescribed in the Code. if Section 32 is taken into consideration wherein, it attracts Subsection 3 of Section 61, these Sections have to be harmoniously construed and it will not to be made applicable in exclusion to Subsection (2) of Section 61, for the purposes of computation of limitation when the limitation is not provided under Section 32 of I & B Code. The provision of Subsection (2) of Section 61 cannot be excluded to be made applicable for the aforesaid purpose. Learned Counsel for the Appellant has submitted that in fact Article 142 has been applied for the purposes of seeking a Condonation of Delay of this nature and for the aforesaid purpose, he relies upon the two Judgments as reported in (2021) Volume 10 SCC 401, Kalpraj Dharamshi and Another Vs Kotak Investment Advisors Limited and Another, Para 38, 39, 51 & 52 and also Judgment as reported (2022) Volume 11 SCC 761, National Spot Exchange Limited Vs Anil Kohli, Resolution Professional for Dunar Foods Limited, Para 142, 155. These two Judgments deal with the exercise of powers of the Hon’ble Apex Court under Article 142 of the Constitution of India, for the purposes of Condonation of Delay. The Hon’ble Apex Court while dealing with the aforesaid impact of the Condonation of Delay had laid down in the matters of National Spot Exchange Limited Vs Anil Kohli, Resolution Professional for Dunar Foods Limited, Civil Appeal No.6187 of 2019, where it has been provided that, the period of limitation cannot even be condoned attracting the provisions contained under Article 142 of the Constitution of India. The relevant portion of Para 7 of the aforesaid Judgment as rendered in the Comp App (AT) (Ins) No.1127/2023 in the matters of Yogesh Bosmiya Vs Om Prakash Agarwal & Ors., is extracted hereunder: -
“7.No doubt that the Appellant has a right to file an Appeal for which a period of 30 days has been prescribed but it also true that beyond the period of 15 days, the limitation cannot be extended even by this Court as it does not have the jurisdiction. In this respect, regard may be had to the decision of the Hon’ble Supreme Court in National Spot Exchange Limited Vs. Mr. Anil Kohli, RP for Dunar Foods Limited, Civil Appeal No.6187 of 2019 in which it has been held that after the expiry of 15 days, the limitation cannot even be condoned even under Article 142 of the Constitution of India”.
As already observed above, if the argument as extended in the context of the reasons given in the Delay Condonation Application, is considered with regard to the fraud having been committed upon the Appellant and having no knowledge of the Impugned Order of approval of the Resolution Plan, the same aspect, that is, the delay caused on account of delayed knowledge of the Impugned Judgment, has been distinctly dealt with by the Principal Bench in the matters of CA (AT) (Ins) No.300/2024 in IA No.1009/2024, where the Principal Bench in the Judgment of 22.11.2023 has observed that no knowledge of the proceedings itself cannot be a reason for Condoning the Delay, which has chanced in preferring the Appeal. The relevant para 8, 9 & 10 are extracted hereunder: -
“8.From the plan reading of the above provision, it can be safely inferred that any person aggrieved by any order of the Adjudicating Authority is vested with the statutory right of filing of an appeal. However, the statutory right to file the appeal is required to be exercised within a period of 30 days of the impugned order before the Tribunal. If for certain reasons the right to file appeal is not exercised within the prescribed 30 days, the proviso to Section 61(2) can be invoked which proviso provides that the appeal can still be filled subject to such appeal being filed up to a further period of 15 days only. The statutory construct is absolutely clear and unambiguous that the limitation period provided under Section 61 (2) of IBC is 30 days which is extendable by a maximum of 15 days. Thus, no appeal can be filed after the expiry of the extended period of 15 days and that any appeal filed within the extended limitation period can be admitted only after satisfying the Appellate Tribunal that there was sufficient cause justifying the delay of 15 days.
9.Before we proceed further, firstly, we need to keep in mind the thumb-rule that any appeal is a creature of statute. Following therefrom, the right to file appeal in IBC proceedings is circumscribed by the provisions contained in Section 61 of the IBC. Secondly, it is settled law that IBC is a complete code in itself with Sections 238 and 238-A of IBC providing for overriding effect on the provisions contained in the Limitation Act
10.IBC by virtue of being a special statute, this Tribunal is not empowered to condone any delay beyond the statutory prescriptions in the IBC containing a provision for limitation. This legal precept has been squarely laid down by the Hon’ble Supreme Court and for this purpose we may refer to the judgment of the Hon’ble Supreme Court in “Kalpraj Dharamshi vs Kotak Investment Advisors Ltd (2021) 10 SCC 401” wherein it has been noticed that IBC being a special statute, for the purposes of calculating the period of limitation to file an appeal, the governing section shall be Section 61 of the IBC. The relevant excerpts of this order is as extracted below:
“53.Since there is a period different from the one which is prescribed by the Schedule to the Limitation Act, the limitation for an appeal would be governed by Section 43 61 of the I & B Code, which is a special statute. As such, an appeal will have to be preferred within the period of thirty days from the date on which the order was passed by NCLT. However, if NCLAT is satisfied, that there was sufficient cause for not fitting the appeal within a period of thirty days, it may allow an appeal to be filed within a further period of fifteen days. As such, the normal period of limitation prescribed under the I & B Code is thirty days, with a provision for allowing the filing of an appeal within a further period of fifteen days, if NCLAT is satisfied, that there was a sufficient cause for not filing the appeal within thirty days””.
In fact, if the Judgment of the Kalpraj (supra) which has been referred to, is taken into consideration, particularly in view of the observations made under Para 53, it provides that, since the period of limitation from which the period would start running as provided by the special statute which constituted it, hence in the absence of attraction of any of the provision contained under the Limitation Act as such, the Appeal would have to be preferred within a period of 30 days from the date of which the orders was passed or at the most, a period of 45 days by adding 15 days as provided under the proviso to Subsection (2) of Section 61. The Hon’ble Apex Court has consistently laid down that the Tribunals will have to bear in mind that the provisions of the I & B Code have to be trenchantly followed within the specific time frame with a clear objective to avoid any delay in decision-making so that Insolvency Proceedings may be brought to its logical end. The aforesaid principle was particularly dealt by the Hon’ble Apex Court in V. Nagarajan case (Supra) as reported in 2022 Volume 2 SCC Page 244, wherein Para 15 & 16 of the said Judgment the law of limitation with respect to IBC Proceedings is settled and condonation of delay beyond the period prescribed under Subsection (2) of Section 61 is declared to be not permissible. The reason attributed to it is that, the IBC since being a watershed legislation, has sought to overhaul the previous bankruptcy regime which often witnessed prolonged delays in the legal proceedings and has accordingly streamlined the entire process, keeping in mind that, there should be a logical end to the Insolvency Process within the specified time frame. Para 15 & 16 of the Nagarajan Judgment is extracted under: -
“15.An appeal is a creature of statute, hence there is a fundamental distinction between the right to file a suit and the right to file an appeal. In terms of Section 9 of the Civil Procedure Code, 1908, there is an inherent right to bring a suit of a civil nature, unless the suit is barred by statute. On the other hand, an appeal is a creature of statute and must have the clear authority of law. 13IBC envisages a comprehensive dispute resolution process in Chapter VI. NCLT is the empowered “adjudicating authority” under Section 6o IBC with the jurisdiction to entertain any proceeding in relation to insolvency resolution of liquidation proceedings under IBC. An appeal lies against an order of the adjudicating authority to the appellate authority, NCLAT, under Section 61(1) IBC. An order of NCLAT is subject to an appeal on a question of law to the Supreme Court under Section 62. The jurisdiction of civil courts has been explicitly ousted by Section 63 IBC.
16.In the present case, the appellant was aggrieved by an order3of NCLT passed under IBC. His right to file an appeal arose from Section 61 IBC which is in the following terms:
“61.Appeals and appellate authority.—(1) Notwithstanding anything to the contrary contained under the Companies Act, 2013, any person aggrieved by the order of the adjudicating authority under this part may prefer an appeal to the National Company Law Appellate Tribunal.
(2)Every appeal under sub-section (1) shall be filed within thirty days before the National Company Law Appellate Tribunal:
Provided that the National Company Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days.”
Section 61(2) specifically provides for a limitation period of thirty days, which can be extended by a maximum of fifteen days on the demonstration of sufficient cause for the delay. The determination of the present appeal would hinge on two issues:
16.1.(i) when will the clock for calculation the limitation period run for appeals filed under IBC; and
16.2.(ii) is the annexing of a certified copy mandatory for an appeal to NCLAT against an order passed under IBC”.
Thus, in view of what has been argued, the entire controversy could be
summarized in the following manner: -
That when Section 32 contemplates an Appeal as against the order of the approval of the Resolution Plan under Subsection (1) of Section 31 of the I & B Code by NCLT, Appeal is contemplated under Section 32, which has to be in the manner and grounds as provided under the provisions contained under Subsection (3) of Section 61. The provisions of Subsection (2) of Section 61, for the purpose of determination of limitation would also be attracted, for preferring of an Appeal under Section 32 read with Section 61(3) by the Appellant, as against the order of approval of the Resolution Plan. Since the Appeal in question has been preferred after a period much beyond then, what has been prescribed under Subsection (2) of Section 61 i.e, with a delay of 229 days and since the same happens to be an inordinate delay, it cannot be condoned, merely on the grounds which has been taken by the Appellant in the Delay Condonation Application, that is, the ignorance and the delayed knowledge of the passing of the order and the commission of alleged fraud by the RP, because these grounds cannot be taken as to be as attributes for the purposes of condoning the delay, owing to the principles that has been laid down in V. Nagarajan case, where stringent thumb rules have to be followed for the purposes of determining the period of limitation prescribed, for preferring of an Appeal under Section 31 of I & B Code.
The Appellant himself has preferred an Appeal titling it to under Section 32 to be read with Section 61(3), meaning thereby, the Appeal thus preferred by the Appellant is not independent to the provisions contained under Section 32 when the appeal has been jointly preferred under Section 61. Given the nature of Section 61 which starts with a non-obstante clause, the provisions of Section 61 would have to be applicable in its entirety, not in piece meal. One has to keep in mind that when the I & B Code was formulated, necessity was felt to create an effective legal framework for timely resolution of the Insolvency and Bankruptcy proceedings which could support reduction of Corporate Sector Litigation and encourage entrepreneurship. The basic SOR of the I & B Code was, to consolidate and amend the laws relating to the Insolvency Resolution in respect of corporate entities, partnership firms and individuals so as maximize the value of assets of such persons and to promote entrepreneurship. In particular, emphasis has been given to ensure that such resolution has to be done in time-bound manner to achieve the said objectives. The excerpt of the SOR is extracted hereunder: -
“An Act to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto.”
In view of the SOR of the I & B Code, it goes without saying in consonance with the Subsection (2) of Section 61 that, the litigation pertaining to the Insolvency process has to be logically brought to an end within a stipulated time frame through an effective legal framework and that is why the provisions contained under Section 61, has been preceded by the non-obstante clause. In that eventuality, while giving a logical construction of the intent of law, and the literal construction had to be in general, prima facie conclusion was to arrive at the concept and aim and object of the Code which is to meet the purpose of the legislature for bringing an Insolvency Proceedings to a logical end within a specified time frame and in which, ignorance of the Judgment or lack of the knowledge, as it has been pleaded and has been taken as exclusively a ground in the Delay Condonation Application, has not been granted an exemption for the purposes of Section 61(2) by the Code and the Judicial precedents as already referred to herein above.
Accordingly, the question of limitation is answered against the Appellant, since there happens to be an inordinate delay of 229 days, which is much beyond the period prescribed under the proviso to Subsection (2) of Section 61 of the I & B Code. The Delay Condonation Application No.626/2024 would stand rejected and in the consequence there to, the Comp App (AT) (CH) (Ins) No.62/2024 would too stand dismissed.