Sai Syntex Co. vs Atlantic Spinning And Weaving Mills Ltd

The Appellant in the instant Company Appeal, puts a challenge to the Impugned Order dated 04.09.2024, as it has been rendered in IA No. 1747/2024, in CP (IB) No. 497/7/HDB/2018, the consequential effect of the impugned order was that the Appeal preferred by the Appellant under Section 42 of I & B Code 2016, has been rejected, on the ground of limitation holding thereof that, since under the I & B Code 2016, itself the entire process of liquidation being a time bound process, the aspect of limitation has to be strictly construed to meet the object of the code, and thus holding that the Appeal to be barred by limitation provided by Section 42 of I & B Code 2016, code, thus the same has been dismissed on the ground of limitation. The Ld. Counsel for the Appellant argued that, in fact, there was no delay, at his behest for the reason being that he submit that he was diligently participating in the proceedings and had pursued his rights and for the aforesaid aspect he has submitted that, as against the order passed by the Liquidator rejecting his claim, earlier the Appellant has preferred a Company Appeal AT(CH)(INS) No. 23/2020 (TA No. 219/21) the same was considered by this Appellate Tribunal and by the judgment dated 16.07.2024, owing to the implications contained because of there being a statutory remedy available to the Appellant under Section 42 of I & B Code 2016, the Appellant was relegated back to avail his appellate remedy, available to the appellant as provided under the I& B code 2016, Since the Appellant, was apprehending that when he invokes the proceedings under Section 42 of I & B Code 2016, there could be a possibility of the proceedings being treated as to be barred by limitation, we took into consideration, the implications of provision contained under Section 238A, for the purpose of considering the aspect of limitation at the stage, when the appellant files the appeal under Section 42 of I & B Code 2016, But, if Section 42 of I & B code, itself is taken into consideration consequent to which the Appellant has approached the Ld. Adjudicating Authority and preferred an Interlocutory Application being IA No. 1747/2024, seeking condonation of delay, for the purposes of invoking the appellate jurisdiction under Section 42 of IBC Code, while, putting the challenge to the rejection of claim of the Appellant by the Liquidator.

Section 42 of I & B Code 2016, it specifically provides that an appeal against the rejection of claim by the liquidator could be preferred within a period of 14 days from the date of the receipt of such decision. The period of limitation as prescribed therein is having a self-contained provision by virtue of which the limitation could be governed to be extended and at the most the Appellant was granted liberty to have the re-course to the defence to be taken in the light of the provisions contained under section 238 A, of I & B Code 2016, for the grant of benefit of extension of limitation, the Appellant had filed the application, which had been rejected, the argument of the Ld. Counsel for the Appellant is that the application thus preferred under Section 238 A of I & B Code 2016, for grant of limitation has to be reasonably construed with the same relaxation, as the Appellant were able to establish that there was sufficient cause available to him for not being able to approach at invoke the appellate remedy under Section 42 of I & B Code 2016, within an appropriate time.

The interpretation which has been given by the Appellant to the directions given by this Tribunal in the earlier judgment when the Appellant was relegated back to resort to his remedies under Section 42 of I & B Code 2016, where the observation was made by this Tribunal that, he may have a recourse to the benefit of limitation under Section 238 A, that itself may not be construed that we have given any positive direction or any leverage or we have invoked the jurisdiction, which has been vested with the Adjudicating Authority for considering the aspect of limitation because, the entire issue pertaining to the limitation, which would be the first stepping stone for dealing with the appeal under Section 42 of I & B Code 2016, on merits, was to be considered exclusively within the judicial domain of the NCLT. The directions given by us as has been misconstrued, it has been sought to be interpreted as if a liberal interpretation has to be given to the aspect of application of limitation, which was subject matter of consideration at the stage, when the appeal of the Appellant was considered. The Ld. Adjudicating Authority while considering the application has considered the contention of the Appellant and while recording its reasoning, as it could be culled out from the concluding paragraph of the Judgement, it has observed that the proceedings of the Appeal under section 42 of I & B Code 2016, has had to be construed from the date when the claims of the Applicant stood rejection by the Liquidator because, at the initial stage when the claim was rejected way back on 19.02.2020, it was 14 days, from there which the limitation was construed for the appellant to enable him to invoke Section 42 of the I&B code 2016. Having not done so and having preferred the Company Appeal, which was adjudicated by us by the Judgment rendered on 16.07.2024, was not an extension of time because of the invocation of wrong forum, for the Appellant, as against the rejection of his claim by the Liquidator, because the aspect of limitation was independent to the Judgment rendered by us, and which has been appropriately decided by the Ld. Adjudicating Authority, and since the proceedings under I&B Code, 2016 happens to be time bound proceedings and since the limitation is an aspect of self-contained under Section 42, of the I&B Code, 2016 which provides for an Appeal against the rejection of the claim within the specified time the judgment rendered by the Ld. Adjudicating Authority rejecting the application for limitation in the Impugned Order does not suffer from any inherent illegaily which could call for any interference by this Appellate Tribunal.

Thus, the Appeal lacks merit and the same is accordingly ‘dismissed’