State Bank Of India (SBI) vs Mr. Gonugunta Murali

[Oral Judgment: Justice Sharad Kumar Sharma, Member (Judicial)]

This instant company appeal has been preferred by the Appellant challenging the impugned order dated 12.08.2025, which was rendered in CP(IB)No. 1559/9/HDB/2021. The company appeal is accompanied with the Condone Delay Application, being IA No. 1459/2025, where the Appellant has sought a condonation of 8 days of delay. The reason for seeking condonation of delay has been pleaded in para 3 (a) of the application filed in support thereto contending thereof that, the attorney of the Appellant who was supposed to file the company appeal was suffering from viral fever and hence he was incapacitated to file the company appeal within the prescribed time period. Considering the grounds taken in the application, coupled with the fact that there is no serious objection taken by the Respondent to the Condone Delay Application, and that the number of days of delay that has been sought to be condoned is falling well within the ambit of proviso to Section 61 (2) of the I & B Code, 2016, the delay of 8 days would stand condoned and accordingly, IA No. 1459/2025 would stand allowed.

The parties are at consensus, that this company appeal itself may be considered and disposed of finally.

In short, the controversy, as it has been agitated by the Appellant in the instant company appeal qua the impugned order under challenge, was with regard to the order passed on IA (IBC) 849/2025 in IA (IBC) 1986/2024 that was preferred in CP(IB)No. 1559/9/HDB/2021, being the principal proceedings, being carried under Section 9 of the I & B Code, 2016.

The aforesaid application was preferred by the Liquidator of M/s. G.S. Oils Limited before the Ld. Tribunal, invoking the provisions contained under Rule 155 to be read with Rule 153, along with Rule 11 of the NCLT Rules, 2016, seeking for a modification/amendment of para 1 at page 1 of IA No.1986/2024 by making the amendments, and further, the prayer was sought to permit to modify or amend the relief of IA (IBC)/849/2025. The necessary relief as sought for in IA No.1986/2024, as preferred by the Liquidator, is given hereunder: -

The said application IA (IBC)/849/2025, came up for consideration before the Ld. Tribunal. Though the application for amendment was contested, the Ld. Tribunal by the impugned order had proceeded to allow the application and had permitted the Applicant/Respondent to amend the relief and para 1 of the IA No.1986/2024.

The factual backdrops are that the Respondent/Liquidator on 30.09.2024, had filed an IA before the Ld. NCLT Hyderabad Bench, being IA (IBC) 1986/2024 invoking the provisions contained under Section 35 (1) (n) to be read with Section 60 (5)(c) of the I & B Code, 2016, wherein he had prayed for passing of an appropriate direction to the Appellant to exclude the time period from the date of commencement of liquidation, that is, from 12.09.2022 till final order was passed by the NCLT Hyderabad Bench, on the removal of the ED attachment as against the company and its properties, that is, dated 10.06.2024, for the purposes of computing the fee of the Liquidator.

When the said applications was being considered, the Applicant to the said application, i.e., IA (IBC) 1986/2024, filed an IA (IBC)/849/2025 seeking a prayer by way of an amendment, invoking the provisions contained under Rule 155, to be read with Rule 153 and Rule 11 of the Ld. NCLT Rules, 2016, wherein the Respondent had sought for a permission for carrying out the amendments. In the application thus preferred, the Liquidator had sought a directions to the Respondent, State Bank of India to exclude the period 31.07.2023 (from the date of the interim order passed by the Ld. Tribunal on I.A No. 960 of 2023, that is, from 31.07.2023) till 10.07.2024 (the date of the final order by the Ld. NCLT Hyderabad Bench, on removal of the ED attachment as against the company and its property) for the purpose of computing the fee of the Liquidator. This application for amendment, being IA (IBC)/849/2025, which was preferred in IA (IBC) 1986/2024, has been allowed by the impugned Order.

The facts of the case are that is the 15^th SCC meeting held on 13.09.2024, the Liquidator had placed the subject as agenda Item No. 5, seeking for an exclusion of period commencing from 12.09.2022 (date of commencement of liquidations) to 10.07.2024 (date of order of Ld. Tribunal removing the ED attachment) for the limited purposes for computation of the fee. The said agenda was deliberated upon in the said SCC meeting and was rejected. The Appellant, State Bank of India, with a voting share of 52.42% had voted against the said agenda. Aggrieved by said decision, the Respondent/liquidator had filed the IA (IBC) 1986/2024, seeking a direction to the State Bank of India to exclude the time period from 12.09.2022 to 10.07.2024 while computing the fee of the liquidator. Subsequently, the liquidator had filed another application IA(IBC)/548/2025 seeking to amend the application IA(IBC)/1986/2024 already filed by him.

This application thus preferred by the Respondent seeking the amendment in IA (IBC) 1986/2024 as described above was contested by the Appellant to the hilt, who submitted that, the powers contained under Rule 155 of the NCLT Rules, 2016, which speaks about the general power of amendment, specifically contemplates that, the amendment is required to be prayed for within a specified period of 30 days from the date of completion of the pleadings and not beyond that except for exceptional circumstances, subject to satisfying conditions of Rule 155 of NCLT Rules, 2016. The Appellant further contended that the Ld. Tribunal vide its order of 18.12.2024, had already directed the parties to file written submissions and posted the case on 21.01.2025 for hearing consideration of IA (IBC) 1986/2024 on its merit, consequent to which, the Ld. Tribunal had reserved its orders on IA (IBC) 1986/2024 on 04.03.2025 and has posted the same for the decision to be rendered on 10.03.2025.

The Appellant contends that, if at all any amendment was required to be made in IA (IBC) 1986/2024 , it ought to have been made within the time period as it has been prescribed under Rule 155 of the NCLT Rules, 2016 that the Applicant had filed the amendment application much beyond the prescribed period under law, that is, 30 days from 04.11.2024, that the said amendment application was not maintainable, and that no such application could have been at all entertained by the Ld. Tribunal, in the absence of there being a prior order of Ld. Tribunal to entertain such amendment application.

The Appellant has further contended that that in the absence of there being any plausible explanation given by the Respondent/liquidator for the delay of about five months in filing of the amendment application from 04.11.2024, that is the date of filing of IA (IBC) 1986/2024, the same would not be tenable, since being in violation to the provisions contained under Rule 155 of the NCLT Rules, 2016 and that, any such application filed more as an afterthought, seeking an amendment to the prayer clause, which changes the complexion or the very foundation of the proceedings of IA (IBC) 1986/2024, cannot be permitted to be entertained at such a belated stage.

The Appellant has submitted details of dates and events as to in what manner the proceedings of IA (IBC) 1986/2024 had been carried before the Ld. Tribunal till 04.03.2025, when the order on the same was reserved.

The Appellant had taken a specific case in his objection, to the IA (IBC)/849/2025 contending thereof that since the proposal for exclusion of certain time period as it was discussed in the 15^th SCC meeting held on 13.09.2024 has already been rejected, and no challenge has been given to the said rejection, the same cannot be permitted to be indirectly incorporated by virtue of the said amendment sought to be made in IA (IBC) 1986/2024, thereby indirectly overcoming the inferences flowing from SCC decision dated 13.09.2024.

Besides that, he has contended that the Ld. Tribunal vide its earlier order of 26.09.2023 had already excluded 322 days from the liquidation period, and that the relief sought in the amendment application would not be tenable because it changes the very complexion of the entire controversy, as it was agitated in IA (IBC) 1986/2024, besides being barred by limitation.

The Ld. Tribunal has proceeded to allow the IA (IBC)/849/2025, by passing the impugned order, on the ground that period sought to be excluded from 12.09.2022 to 10.07.2024 was a factual error on part of the liquidator and that the correct period intended was from 31.07.2023 to 10.07.2024, that the amendment sought was not a new cause of action, but a variation in the dates only, that an amendment sought will not be barred under Rule 155 just because of delay in filing the same unless it causes prejudice or alters the nature of adjudication and in any case, no material prejudice will be caused to SBI. We are of the view that the Rule 155 has been wrongfully interpreted by the Ld. Tribunal, particularly when the rule specifies the period during which the amendment could be permitted to be carried and that, if it is required to be carried beyond the period prescribed under Rule 155 of the NCLT Rules, 2016, then there ought to have been a prior exemption of the same to be granted by the Ld. Tribunal by a specific order being passed by the Ld. Tribunal in that regard.

In addition, the impugned order doesn't indicate that the Ld. Tribunal, has at all ever considered the legal implications of Rule 155 of the NCLT Rules, 2016, in its context to the legislative intention of Rule 155 of the NCLT Rules, 2016, itself, for granting a permission to carry out the amendment beyond the period then what has been prescribed under Rule 155 of the NCLT Rules, 2016, which requires the determination by the Ld. Tribunal of existence of such exceptional circumstances, which could permit the extension of leverage for carrying out the amendment beyond the period prescribed under Rule 155 of the NCLT Rules, 2016. In the absence of any such finding recorded therein, it will render the order itself to be bad in the eyes of law.

Apart from the aspect of limitation which was one of the factors, required to be considered, the Ld. Tribunal has not applied its mind from the perspective that, whether the nature of the amendment, which has been sought by IA (IBC)/849/2025, will affect the nature of the application IA (IBC) 1986/2024, particularly in the context of the relief, which was sought therein and as to, what bearing will it have to the complexion of proceedings.

The finding recorded by the Ld. Tribunal with regards to the aspect of the delay, which has chanced in filing of the application for seeking an amendment, is seen to have been based on the logic that no material prejudice will be caused to the Respondent due to the said delay. This may not be correct because these will be other collateral factors and implications which govern the aspect of amendment, which was necessarily required to be considered by the Ld. Tribunal. Further Ld. Tribunal has not gone into the question of what bearing the amendment will have on the merits of the decision to be taken on IA (IBC) 1986/2024, while passing the impugned order dated 12.08.2025.

Owing to the aforesaid reason, the company appeal would stand allowed and the impugned order dated 12.08.2025, would hereby stand quashed. Consequently, the IA (IBC)/849/2025 as preferred by the Respondent in IA (IBC) 1986/2024, would hereby stand rejected. It will be open for the Ld. Tribunal to proceed to decide the company petition, as well as, IA (IBC) 1986/2024 exclusively on its own merit if not already decided. Subject to above, the ‘company appeal’ stands ‘allowed’. All ‘introductory applications’ will stand ‘closed’.