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Judgment
NARESH SALECHA, MEMBER (TECHNICAL):
The Present `Appeals’ are filed against the common ‘impugned order’ dated 13.12.2019, passed in MA/ 554/ 2019, MA/ 877/ 2019, MA/ 630/ 2019, MA/ 879/ 2019, MA/ 874/ 2019, MA/ 626/ 2019 & MA/ 629/ 2019, MA/ 878/ 2019, MA/ 170/ 2019 and MA/ 625/ 2019 in CP/ 193/ IB/ 2018 by the ‘Adjudicating Authority’ (National Company Law Tribunal, Chennai Bench), whereby, the ‘Adjudicating Authority’ had dismissed the `Miscellaneous Applications’, filed under Insolvency & Bankruptcy Code, 2016 (in short ‘I & B Code, 2016’)
Brief Facts:
2.
| Vipras Adz | CA (AT) (Ins.) No. 442 of 2020 |
| B. Akhilandeswari | CA (AT) (Ins.) No. 443 of 2020 |
| Mrs. S. Ravi | CA (AT) (Ins.) No. 444 of 2020 |
| P. Krishnamoorthy | CA (AT) (Ins.) No. 445 of 2020 |
| Sai Trading and Interiors | CA (AT) (Ins.) No. 454 of 2020 |
| Themes Adz | CA (AT) (Ins.) No. 455 of 2020 |
| G. Balaji | CA (AT) (Ins.) No. 457 of 2020 |
| Sai Enterprises | CA (AT) (Ins.) No. 470 of 2020 |
The aforesaid ‘Appellants’ as indicated above with different CA (AT) (Ins.) Nos. are various ‘Operational Creditors’ of M/s P Dot G Constructions Pvt. Ltd. & Anr. who are aggrieved by the common ‘impugned order’ dated 13.12.2019 and have filed different eight appeals.
Innova Homebuyer Neyveli Association | CA (AT) (Ins.) No. 215 of 2020 |
The aforesaid ‘Appellant’ as indicated above with CA (AT) (Ins.) No. 215 of 2020 is an Association of the Homebuyers under caption ‘Innova Homebuyer Neyveli Association’ has also filed an appeal against the same common ‘impugned order’ dated 13.12.2019.
As such, there are total nine appeals before this ‘Appellate Tribunal’ against the same common ‘impugned order’ and hence all these nine appeals are being taken up together in the following discussions.
The ‘Corporate Insolvency Resolution Process’, was initiated against the ‘M/s P Dot G Constructions Pvt. Ltd. & Anr.’ on 13.07.2018 and based on the recommendations of ‘Committee of Creditors’ , the ‘Adjudicating Authority’ approved the ‘Resolution Plan’ of ‘Successful Resolution Applicant’ viz. M/s RCC e-Construction Pvt. Ltd.
Aggrieved by above ‘Resolution Plan’ which provides insufficient settlement of the claims of the ‘Appellants’, the `Appeals’, have been filed.
Several issues have been raised by the ‘Appellants’ in above `Appeals’, before this ‘Appellate Tribunal’ which, inter-alia, include issues regarding fairness of ‘Resolution Plan’ providing meagre settlement money to the ‘Appellants’ for examples- only 1.5% to the ‘Operational Creditors’ of their claims, non-initiation of the cases by the ‘Resolution Professional’ for the fraudulent, preferential, avoidance and extortionate transactions.
The `Appeals’ also challenge the under valued `Liquidation Value’, the ‘Resolution Plan’ amount, being lower than the `Liquidation Value’, `exorbitant interest charges’, by the ‘Financial Creditors’ in their claims, wrong dealing with the aspects of `Security Interest’, claimed by the ‘Financial Creditors’, etc.
The ‘Appellants’ have submitted that the ‘impugned order’ was pronounced on 13.12.2019, however certified copy was delivered to the ‘Appellants’ on 03.02.2020 and the appeal was filed on 02.03.2020 as such the appeals have been filed within the limitation period.
The Learned Counsel for the Respondent No. 1 however have taken the plea that the appeals cannot be entertained since these are `barred by the limitation’, as these fails to meet the requirements, as stipulated in Section 61(2) of the I & B Code, 2016.
Since, the initial hurdle of the limitation is required to be looked into, this ‘Appellate Tribunal’, in this `Judgment’, examines the same, as it goes to the `root of the matter of `maintainability’ of these `Appeals’.
Before proceeding further, it is therefore warranted, to look into the specific provisions regarding the limitations as provided in I & B Code, 2016’, along with the Rule 22(2) of ‘National Company Appellate Tribunal Rules 2016’, further relevant and comparable rules on the subject including the ‘Companies Act, 2013’.
“22.Presentation of appeal.- (1) Every appeal shall be presented in Form NCLAT-1 in triplicate by the appellant or petitioner or applicant or respondent, as the case may be, in person or by his duly authorised representative duly appointed in this behalf in the prescribed form with stipulated fee at the filing counter and non-compliance of this may constitute a valid ground to refuse to entertain the same.
(2)Every appeal shall be accompanied by a certified copy of the impugned order.
(3)All documents filed in the Appellate Tribunal shall be accompanied by an index in triplicate containing their details and the amount of fee paid thereon. (4) Sufficient number of copies of the appeal or petition or application shall also be filed for service on the opposite party as prescribed.
(5)In the pending matters, all other applications shall be presented after serving copies thereof in advance on the opposite side or his advocate or authorised representative.
(6)The processing fee prescribed by the rules, with required number of envelopes of sufficient size and notice forms as prescribed shall be filled along with memorandum of appeal.”
[emphasis supplied]
“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.”
[emphasis supplied]
From above Section 61(2) of the I & B Code, 2016, that an `Appeal’, is required to be filed, within 30 days, before this ‘Appellate Tribunal’. However, as per proviso to Sub – Section (2) of Section 61 of the I & B Code, 2016 this ‘Appellate Tribunal’ may allow further period not exceeding 15 days, based on the `Appeal’, filed before it provided sufficient cause for non filing the `Appeal’ have been submitted. This, however, does not clarify as to 30 days period shall be counted w.r.t. which date in contrast to similar provision made under Section 421 of the ‘Companies Act, 2013’ which reads as under :
“421.Appeal from orders of Tribunal - (1) Any person aggrieved by an order of the Tribunal may prefer an appeal to the Appellate Tribunal.
(2)No appeal shall lie to the Appellate Tribunal from an order made by the Tribunal with the consent of parties.
(3)Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order of the Tribunal is made available to the person aggrieved and shall be in such form, and accompanied by such fees, as may be prescribed: Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days from the date aforesaid, but within a further period not exceeding forty-five days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within that period.
(4)On the receipt of an appeal under sub-section (1), the Appellate Tribunal shall, after giving the parties to the appeal a reasonable opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.
(5)The Appellate Tribunal shall send a copy of every order made by it to the Tribunal” and the parties to appeal.”
[emphasis supplied]
The ‘Companies Act, 2013’ is therefore very clear where it has been specified that 45 days period will be counted from the date on which a copy of the order of the ‘Tribunal’ is made available to the `Person Aggrieved’.
This `Tribunal’, again refers to Section 61(1) of the I & B Code, 2016 which stipulates ‘notwithstanding anything to the contrary contained under the Companies Act, 2013….’ which implies that the provision of the ‘Companies Act, 2013’ as contained in Section 421 is not applicable to Section 61(1) r/w Section 61(2) of the I & B Code, 2016.
It is well settled `principle of interpretation’, that the ingredients of a particular section will have to be read on the basis of plain and simple language therein, ofcourse, based on harmonious construction, without causing any volatile harm / injury to the language found therein. Further, when the language of the section is quite `explicit’, `unequivocal’ and `unambiguous’, the same admits of no exception, in the considered opinion of this ‘Appellate Tribunal’.
This ‘Appellate Tribunal’ will advert to the Citations / Judgments relevant on the `issue of limitation’, being discussed, before arriving at a final conclusion. The decision of the Hon’ble Supreme Court of India in V. Nagarajan vs. SKS Ispat and Power Limited and Ors. (2022) 2 SCC, reads as under:
21.`` The answer to the two issues set out in Section C of the judgement- (i) when will the clock for calculating the limitation period run for proceedings under the IBC; and (ii) is the annexation of a certified copy mandatory for an appeal to the NCLAT against an order passed under the IBC – must be based on a harmonious interpretation of the applicable legal regime, given that the IBC is a Code in itself and has overriding effect. Sections 61(1) and (2) of the IBC consciously omit the requirement of limitation being computed from when the “order is made available to the aggrieved party”, in contradistinction to Section 421(3) of the Companies Act. Owing to the special nature of the IBC, the aggrieved party is expected to exercise due diligence and apply for a certified copy upon pronouncement of the order it seeks to assail, in consonance with the requirements of Rule 22(2) of the NCLAT Rules. Section 12(2) of the Limitation Act allows for an exclusion of the time requisite for obtaining a copy of the decree or order appealed against. It is not open to a person aggrieved by an order under the IBC to await the receipt of a free certified copy under Section 420(3) of the Companies Act 2013 read with Rule 50 of the NCLT and prevent limitation from running. Accepting such a construction will upset the timely framework of the IBC. The litigant has to file its appeal within thirty days, which can be extended up to a period of fifteen days, and no more, upon showing sufficient cause. A sleight of interpretation of procedural rules cannot be used to defeat the substantive objective of a legislation that has an impact on the economic health of a nation.
22.On the second question, Rule 22(2) of the NCLAT Rules mandates the certified copy being annexed to an appeal, which continues to bind litigants under the IBC. While it is true that the tribunals, and even this Court, may choose to exempt parties from compliance with this procedural requirement in the interest of substantial justice, as re-iterated in Rule 14 of the NCLAT Rules, the discretionary waiver does not act as an automatic exception where litigants make no efforts to pursue a timely resolution of their grievance. The appellant having failed to apply for a certified copy, rendered the appeal filed before the NCLAT as clearly barred by limitation.
23.The appellant was present before the NCLT on 31 December 2019 when interim relief was denied and the miscellaneous application was dismissed. The appellant has demonstrated no effort on his part to secure a certified copy of the said order and has relied on the date of the uploading of the order (12 March 2020) on the website. The period of limitation for filing an appeal under Section 61(1) against the order of the NCLT dated 31 December 2019, expired on 30 January 2020 in view of the thirty-day period prescribed under Section 61(2). Any scope for a condonation of delay expired on 14 February 2020, in view of the outer limit of fifteen days prescribed under the proviso to Section 61(2). The lockdown from 23 March 2020 on account of the COVID-19 pandemic and the suo motu order of this Court has had no impact on the rights of the appellant to institute an appeal in this proceeding and the NCLAT has correctly dismissed the appeal on limitation. Accordingly, the present appeal under Section 62 of the IBC stands dismissed.’’
[emphasis supplied]
From the ratio laid down, in the afore cited decision of the Hon’ble Supreme Court of India in V. Nagarajan (Supra) makes it clear that the I & B Code, 2016, has an over riding effect and section 61(1) and 61(2) of the I & B Code, 2016, explicitly, conspicuously silent on the requirement of limitation, being computed `from the date when the order’, is made available to the `Aggrieved Parties’ in contradiction to Section 423 of the ‘Companies Act, 2013’. This Judgment, further makes it clear that the `onus’ of making attempts, to obtain the certified copy squarely lies with the ‘Applicant’. This ‘Appellate Tribunal’ is also conscious to the fact that the proceedings under I & B Code, 2016 are intended to be as summary proceedings, in contrast to other Civil Courts proceedings, which are `adversarial in nature’.
This ‘Tribunal’, refers to the Judgment of this ‘Appellate Tribunal’ in the matter of Exide Industries Ltd. Vs. Jitender Kumar Jain, Resolution Professional of Morakhia Copper & Alloys Pvt. Ltd., (vide Company Appeal (AT) (Insolvency) No. 1169 of 2022), wherein this ‘Appellate Tribunal’ had also quoted para- 21 of the judgment pronounced by the Hon’ble Supreme Court of India in V. Nagarajan vs. SKS Ispat and Power Limited and Ors. (2022) 2 SCC (Supra) and in para-6 of the Judgment passed by this ‘Appellate Tribunal’ which is being discussed herein is also relevant and reproduced as under: -
“Para-6. In view of the law laid down by the Hon’ble Supreme Court, the limitation for filing the Appeal begins when order was pronounced. The mere fact that Appellant received free certified copy of the Impugned Order on 27th July, 2022, the period of limitation shall not stop running after passing of the order/ judgment. Our jurisdiction to condone the delay is only limited to 15 days under Section 61(2) proviso. There being delay of more than 15 days, the Delay Condonation Application cannot be allowed. Application is dismissed. Consequently, the Memo of Appeal is rejected.”
[emphasis supplied]
It is the case of the ‘Appellants’ that on 03.02.2020 ‘Certified Copy’ was delivered and as such the period of limitation is specified in Sub-Section 2 of Section 61 of the I & B Code, 2016 is complied with.
However, from the record made available as well as from the averments made, it is noted that the ‘impugned order’ was pronounced on 13.12.2019, and the period of 30 days as per Section 61 of the I & B Code, 2016 expired, on 12.01.2020. Even, if 15 days which could have been extended by this ‘Appellate Tribunal’, the limitation period would have expired on 27.01.2020. Taking into account, the `Judgments pronounced by the Apex Court’, as well as this ‘Appellate Tribunal’, this `Tribunal’, without any haziness comes to a firm conclusion that, it was for the `Aggrieved Parties’, to make earnest efforts, for obtaining the `Certified’ copy and take further necessary action, as stipulated in Section 61 of the I & B Code, 2016.
This ‘Appellate Tribunal’, quite in the fitness of things, observes that, the `Time is the Essence of the Code’, for the purpose of maximisation of the `Value’ of the `Assets’, and further that the I & B, Code, 2016, is an `inbuilt and self-contained Code’, over riding other `Laws’, as per Section 238 of the Code. As a matter of fact, mere procedure formalities cannot be allowed to cause `undue delays’ and in this perspective, the `onus’ lies on the ’Appellants’ for being `vigilant’, and take necessary action, to protect and exercise their `legal rights’, in a timely fashion.
It cannot be the case of the ‘Appellants’ that, despite being `Parties’ and in knowledge of pronouncement of the `Order’, by the ‘Adjudicating Authority’, they have chosen not to be pro-active in obtaining the required documents including, ‘Certified Copy of the Order’, to file the `Appeal’, before this ‘Appellate Tribunal’.
This ‘Appellate Tribunal’, therefore, comes to an irrefutable and purposive conclusion that the ‘Appellants’, fail to meet the requirements of limitations, as stipulated in I & B Code, 2016. Hence, these `Appeals’, Viz. TA (AT) No. 30 of 2021 (Comp. App (AT) (CH) (INS) No. 442 of 2020) , TA (AT) No. 31 of 2021 (Comp. App (AT) (CH) (INS) No. 443 of 2020), TA (AT) No. 32 of 2021 (Comp. App (AT) (CH) (INS) No. 444 of 2020), TA (AT) No. 33 of 2021 (Comp. App (AT) (CH) (INS) No. 445 of 2020), TA (AT) No. 34 of 2021 (Comp. App (AT) (CH) (INS) No. 454 of 2020), TA (AT) No. 35 of 2021 (Comp. App (AT) (CH) (INS) No. 455 of 2020), TA (AT) No. 36 of 2021 (Comp. App (AT) (CH) (INS) No. 457 of 2020) and TA (AT) No. 37 of 2021 (Comp. App (AT) (CH) (INS) No. 470 of 2020) are dismissed on the `point of Limitation’. No costs. The connected pending `Interlocutory Applications’, if any, are Closed. At this juncture, this `Tribunal’, makes it quite clear that, it has not traversed into the merits of the matter in these eight `Appeals’.
TA (AT) No. 50 of 2021 (Company Appeal (AT) (INS) No. 215 of 2020):
In so far as the TA (AT) No. 50 of 2021 (Comp. App (AT) (INS) No. 215 of 2020 is concerned, the IA 576 of 2020 (Condone Delay Application), filed by the `Applicant / Appellant’, was allowed by this `Tribunal’, as early as on 12.08.2021. Hence, the main `Company Appeal (AT) (INS) No. 215 of 2020, will be dealt with separately for `deliverance of Judgment’, in due course.