The Recovery Officer, Employees’ Provident Fund Organization vs Mr. G. Gunasekaran, Liquidator of Sapphire Spinners India Pvt. Ltd.

The instant Company Appeal has been preferred by the Appellant being aggrieved as against the Impugned Order dated 07.07.2023, as made in IA(IBC)/752/(CHE)/2023, in CP/1087/IB/2018, whereby virtue of the Impugned Order, the appeal of the Appellant stood dismissed on the ground of limitation.

The precise facts which require consideration is that the Appellant is said to have raised a claim before the Liquidator, by filing of an application in the shape of Form-3, on 31.01.2020, the same was considered by the Liquidator and he has rejected the same by an order of 17.02.2020. As against the order of rejection of claim by the Liquidator, Appeal may be filed before Ld. NCLT under Section 42 of I & B Code, 2016, which prescribes for that such appeal may be filed within 14 days of receipt of such decision.

The Company Application appealing against the decision of the liquidator was filed on 27.03.2023 before Ld. NCLT, Chennai. The said application IA(IBC)/752/CHE/2023, as preferred by the Appellant was not accompanied with any Condone Delay Application. However, preferring of a Condone Delay Application may not be mandatory, owing to the provisions of Section 5 of the Limitation Act which states that if the factum of delay are explained in the body of the Appeal or any application, that itself would suffice the purpose for seeking the condonation of delay and a separate application may not be necessary.

The Appellant while preferring the appeal before Ld. NCLT has made an endeavour to bring the proceedings to be within an ambit of Section 60(5), so as to overcome the bar of limitation. However, Section 60(5) will not override the statutory provision of Section 42 of the I & B Code, 2016 where the Appeal is specifically contemplated.

In the Application, thus preferred by the Appellant before Ld. NCLT the Appellant herein had pleaded the following in relation to the delay as contained in Para – 2 of the said application. The said Paragraph is extracted hereunder: -

From the pleadings as above, it is seen that the Learned Counsel for the Appellant has submitted that the Appeal should have been filed within 30 days from the date of impugned order, which is contrary to the statute itself, which provides for that the appeal has to be preferred within 14 days of the date of receipt of the order. Even otherwise, the Appellant has admitted that the application has been filed with a delay of 830 days and even after excluding the period of 718 days covered under MA. 665/2021 and MA. 21/2022, as rendered in Suo Moto Writ Petition No. 03/2020, in which Hon’ble Apex Court directed to exclude the same from computation of limitation on account of Covid-19 situation, there was a delay of 112 days. The Learned Counsel for the Appellant submits that, in the light of the explanation given in Para-15 of the said Application, the delay which has chanced should have been reasonably construed for the purposes of condonation of delay, as it has chanced in preferring the Appeal/Application under Section 42 of I & B Code, 2016. After having considering the reason given in Para-2 to be read with Para-15 and after noting the endeavour made by the Learned Counsel for the Appellant to bring the case within an ambit of Section 60(5) of I &B Code, 2016, we are of the considered view that it would be exclusively a case falling under Section 42 of the I & B Code, owing to the observations made by the Tribunal, in the order itself, that it was an Appeal which was being considered by the Tribunal and that was being considered in the light of the explanation of delay as given in Para – 2 of the said application.

If the reason which has been given in the application itself is taken into consideration, that too does not justify the plea to condone the delay of 112 days even if the concessions granted on account of Covid-19 situation is granted to the Appellant. On the other hand, the number of days of delay since being much more than what has been prescribed under Section 42 of I & B Code, 2016, the Appeal/Application before Ld. NCLT itself was barred by limitation. Hence, the Impugned Order, dated 07.07.2023 rejecting the Appeal on the ground of the limitation does not suffer from any apparent legal error calling for an interference.

Hence, the Appeal lacks merit and the same is accordingly dismissed.