NCLAT New Delhi: Time Taken For Restoration And Withdrawl Can’t Be Excluded, Delay Beyond Condonable Limit
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, New Delhi comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra Dash (Technical Member), dismissed an application filed in Harish Kumar vs. Solitaire Infomedia Pvt. Ltd. & Anr. by Harish Kumar (Applicant) seeking condonation of delay in filing the appeal under Section 61 of the...
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, New Delhi comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra Dash (Technical Member), dismissed an application filed in Harish Kumar vs. Solitaire Infomedia Pvt. Ltd. & Anr. by Harish Kumar (Applicant) seeking condonation of delay in filing the appeal under Section 61 of the Insolvency and Bankruptcy Code (“Code”) against the order by which the Section 7 application has been rendered non-maintainable.
The Tribunal held that the period of delay in filing an appeal under Section 61 of the Code, from the date of restoration application to the date on which it was disposed of as withdrawn cannot be excluded by giving the benefit of Section 14 of the Limitation Act.
Background Facts:
The appeal was filed on March 1, 2023, with a delay of 38 days. The Applicant argued that the period from January 18, 2023, to February 13, 2023, should be excluded as per Section 14 of the Limitation Act. This exclusion was based on the fact that after an order dated December 22, 2022, a restoration application was filed on January 18, 2023, and it was disposed of as withdrawn on February 13, 2023.
The Applicant relied upon the Supreme Court case of Sesh Nath Singh & Anr. vs. Baidyabati Sheoraphuli Co-operative Bank Ltd. & Anr. and NCLAT judgment of Laxmi Srinivasa R and P Boiled Rice Mill vs. State of Andhra Pradesh & Anr.
NCLAT Verdict:
The NCLAT dismissed the application and held that the period of delay in filing an appeal under Section 61 of the Code, from the date of the restoration application to the date on which it was disposed of as withdrawn cannot be excluded by giving the benefit of Section 14 of the Limitation Act.
The Tribunal observed that the Applicant cannot extend the benefits under Section 14 of the Limitation Act as the conditions set under the section are not applicable to the present case.
Further, the case of Sesh Nath Singh & Anr. vs. Baidyabati Sheoraphuli Co-operative Bank Ltd. & Anr. case is distinguishable from the present case since it was held that the benefit of these proceedings could be extended because the SARFAESI proceedings were stayed by the High Court, and the Cooperative Bank's actions were deemed jurisdictionally improper, hindering the Financial Creditor from proceeding under the SARFAESI Act.
The Supreme Court case of Laxmi Srinivasa R and P Boiled Rice Mill vs. State of Andhra Pradesh & Anr is also distinguishable since a writ petition was filed in the High Court, followed by proceedings and an appeal before the Appellate Tribunal to exclude a certain period. The Supreme Court directed the Appellate Authority to examine the appeal on its merits. Again, this case involved the allowance of benefits under Section 14 due to the proceedings of the writ petition, which was ultimately deemed not maintainable.
In conclusion, the Appellate Tribunal held that the Applicant is not eligible for the benefits of Section 14 of the Limitation Act. The NCLAT’s authority to condone the delay is limited to only 15 days, and it cannot approve the request to condone the delay of 38 days beyond the expiration of the limitation.
Case Title: Harish Kumar vs. Solitaire Infomedia Pvt. Ltd. & Anr.
Case No.: I.A. No. 1174 of 2023 in Company Appeal (AT) (Insolvency) No. 348 of 2023
Counsel for Applicant: Mr. Javed Khan, Advocate
Counsel for Respondent: Mr. Shikhil Suri, Ms. Wamika Chadha, Ms. Nidhi Kapoor, Advocates