Southern Power Distribution Company Of Telangana Limited (TSSPDCL) vs Mr. Krishna Mohan Gollamudi, Liquidator of Priyadarsini Ltd.

Oral: Justice Sharad Kumar Sharma, Member (Judicial):

The instant Company Appeal has been preferred by the Appellant, being aggrieved as against the impugned order dated 17.07.2023, that has been passed by the Learned Adjudicating Authority, Hyderabad Bench, in IA(IBC)/168/2022 in CP(IB)/369/10/HDB/2019. The consequential effect of the Impugned Order had been that, the proceedings under Section 42 of I&B Code, that was attempted to be drawn by the Appellant, after seeking of a condonation of delay has been rejected by the impugned order, on the ground of delay.

The facts that emerge for consideration by us, are that the Appellant Southern Power Distribution Company of Telangana Ltd. is a power distribution company, which is owned by the Government of Telangana. Further, it has come on record that the Respondent has applied for and was sanctioned the HT Electricity Service connection under HT Category-1vide HT Service No. SGR 270, that was released on 22.10.1982, that by virtue of terms and conditions as governed under an HT agreement, which was executed between them, on 09.03.2006, an enhancement of CMD from 1520 KVA to 5500 KVA was done in a phased manner and the said HT agreement was extended from time to time, till the starting point of the present controversy, when on the ground of the continuous default, the Appellant was said to be constrained to issue notices for termination of the agreement vide notice dated 27.06.2018.

The Appellant has submitted that as on the date of the termination of the HT agreement, certain amount still remained to be paid towards the CC arrears, which the Appellant was liable to pay for the aforesaid purpose under the agreement terms. When the proceedings were drawn, the Appellant raised a claim before the Liquidator, for remittance of the said amount, but it was not accepted and stood rejected by the Liquidator by an order that, was passed on 01.07.2021. The grievance of the Appellant was that, as against the total claim of Rs.32,00,22,794/- that, was raised by the Appellant only an amount of Rs.3,72,08,961/- was admitted and the balance amount of claim of Rs.28,28,14,013/- was rejected, which related to the wheeling charges. Aggrieved against the said order of the Liquidator dated 01.07.2021, the Appellant preferred an appeal under Section 42 of I&B code, before the Learned Adjudicating Authority.

The Appellant is said to have filed the proceedings, under Section 42 of I&B Code, before the Learned Adjudicating Authority on 22.02.2022, which was contested and the same has been rejected by the impugned order dated 17.07.2023 by the Learned Tribunal on the ground that, the same was barred by limitation on the ground that the time taken to file the appeal is beyond the time limit provided under Section 42 of I&B Code. If the application as preferred by the Appellant, before the Adjudicating Authority is taken into consideration, the said Appeal was preferred under Section 42 of I&B Code, as against the partial rejection of his claim by the liquidator and the the Appellant herein, he had explained the aspect of limitation in Para 4 of the said application, submitting that, the delay of 190 days has chanced owing to the Covid 19 situation and the said delay may be condoned. Para 4 is extracted here under:-

The Application, which was registered as IA(IBC)/168/2022 in CP(IB) No.369/10/HDB/2019, was taken up for consideration by the Tribunal on 17.07.2023 and it was rejected by the Impugned Order on the ground that it was barred by limitation, observing thereof that, the said Appeal preferred under Section 42 of I&B Code, was not accompanied by any supporting application for seeking condonation of delay and that, the delay could not have been condoned by invoking the provisions contained under Section 5 of the Limitation Act, because under the suo-motu powers, there has had to be a specific explanation of delay by filing of an independent application, seeking condonation of delay.

While rejecting the appeal and the consequential claim, the Learned Tribunal has taken a view that, there should have been at least a prayer by way of an application stating the reasons for not being able to file the Appeal within 14 days, and that the reason, which has been given therein, does not contain a whisper as to why there was a delay beyond 14 days, as it is contemplated under Section 42 of the I&B Code. In this context, it is to be noted that in Para 4 of the Appeal, that has been preferred by the Appellant, under Section 42 of I&B Code, the Appellant had sought condonation of delay in filing the appeal on account of Covid-19 situation, which is a good enough reason on account of the Suo-motu Judgement of Hon’ble Apex Court.

Besides that, if the provisions under Section 5 of Limitation Act is taken into consideration, it does not insist on filing of an independent application for condonation of delay. The said provision is extracted here under:

It can be seen that the aforesaid provision nowhere contemplates filing of an independent application for the purposes of seeking condonation of delay, for the purposes of suo-moto exercise of powers by the Ld. Tribunal for condonation of delay and that it will be enough if the appellant satisfies the court / Tribunal in the instant case that he had sufficient cause for not preferring the appeal within such period.

We are in respectful disagreement, with the reason assigned by the Tribunal, as far as this aspect is concerned for the reason being that, in the light of Section 5 of the Limitation Act, which has been referred to in the Impugned Order and extracted above, Section 5 in itself does not contemplate filing of a specific application for seeking condonation of delay and that the Tribunal has to satisfy itself from the pleadings that the Appellant was constrained by sufficient cause for not preferring the Appeal or making an application within the prescribed period.

In response to the said argument, the Learned Counsel for the Respondent has submitted that, the Appellant in Clause 4 of the Application preferred by him, before the Learned Tribunal, by way of IA No. 168/2022, he has stated that he had filed a separate application for seeking condonation of delay. Even if this assertion has been made in the application itself, of filing of an independent application for seeking condonation of delay, non-filing of the same would not deprive the Appellant herein, for seeking the condonation of delay of the light of the wider principles laid down by the Hon'ble Apex Court in its Judgement in Suo Motu Writ Petition (C) No. 3 of 2020, where the entire period from 15.03.2020 to 28.02.2022 has been ordered to be excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings on account of Covid-19 situation.

In that eventuality, the reason, which has been assigned by the Tribunal while rejecting the IA and the consequential proceedings under Section 42 of I&B Code, may not be sustained in the eyes of law. Furthermore while dealing with the argument that, has been extended by the Learned Counsel for the Respondent, as raised in Para 6 of their objection, about the implications of Section 53 of I&B Code, that no amount is now left to be distributed, we are not required to go into the said issue as at this stage we are specifically limiting our consideration to the aspect of limitation for the purposes of consideration of the Appeal under Section 42 of I&B Code and the challenge mounted by the Appellant under Section 42 of I&B Code would still be an aspect open to be considered by the Learned Adjudicating Authority, when Section 42 proceeding itself is taken up on merits.

Summarising the discussion as above, the reason assigned in the Impugned Order, for denying to condone the delay in filing of the appeal under Section 42 of I&B Code is not sustainable, on the grounds that (i) no supporting application was required to be filed for seeking condonation of delay, (ii) the suo-moto powers for condoning the delay could be exercised in the light of the provisions contained under Section 5 of Limitation Act and (iii) the period of Limitation for the appeal was expiring during the period of Covid-19 situation and the period of limitation should have been extended for the Appellant as per the prescription of Hon'ble Apex Court in the suo-motu WP (C) No. 3 of 2020 (supra) and therefore, the delay in filing of the Appeal preferred by the Appellant under Section 42 of I&B Code should have been condoned and it ought to have been heard and decided on merits.

In that eventuality, while condoning the delay, that has chanced in preferring the Appeal under Section 42 of I&B Code, the matter is remitted back to the Learned Adjudicating Authority to decide the Appeal under Section 42 of I&B Code, itself on its own merits. All contentions to be raised by the respective parties would be left open to be agitated before the Adjudicating Authority, without any finding recorded by us to be having any bearing on the proceedings to be decided on merits.