Time Spent In Obtaining Legal Opinion And Engaging Counsel Is Not ‘Sufficient Cause’ For Condonation Of Delay In Filing Of Appeal: NCLAT Chennai

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that the time spent in obtaining legal opinion and engagement of counsel is not a ‘sufficient cause’ to condone the delay in filing of appeal under proviso to Section 61(2) of IBC.

The Bench was adjudicating an application for condonation of delay in filing of appeal wherein the Appellant had filed the appeal on exactly on the 45^th day after obtaining certified copy of order. The delay of beyond 30 days in filing of appeal had occurred due to the time was consumed in obtaining legal opinion and engaging a counsel. The Bench dismissed the application.

BACKGROUND FACTS

An order was passed by the NCLT on 23.06.2023. On 26.06.2023, Mr. Anish Lawrence (“Appellant”) received the free certified copy of the order dated 23.06.2023.

The Section 61 of IBC provides the right to file an appeal against the order of the NCLT before the NCLAT. Section 61(2) of IBC prescribes the period of 30 days to file such an appeal. However, in case the period of 30 days expires and the appeal is not filed, proviso to Section 61(2) further opens a window of 15 days for such an appellant to file the appeal, but by seeking condonation of delay after assigning ‘sufficient cause’ for causing such a delay.

The Appellant filed the appeal against the NCLT Order on 11.08.2023, which was exactly the last day of limitation i.e. 15^th day.

The Appellant submitted that after obtaining the certified copy of the Order, the time was spent in obtaining legal opinion and approaching a counsel in Chennai for filing of appeal. For these reasons, the appeal was filed on the 45^th day after receiving the certified copy of order.

NCLAT VERDICT

The Bench opined that the reasoning given by the Appellant for the delay caused is not a sufficient cause for condonation of delay.

“The appeal has been filed exactly on 45^th day i.e. 30+15 days by calculating the period of limitation from 26.06.2023 otherwise if the period of limitation is counted from 23.06.2023, then it shall be deemed to have been filed on 48^th day. In the case of ‘National Spot Exchange vs. Mr. Anil Kohli RP for Dunar Foods Limited’ in SCC Online SC 716, 2021 in CIVIL APPEAL NO. 6187 OF 2019 the Hon’ble Supreme Court has held that delay beyond 15 days cannot be condoned in any manner as the Appellate Authority does not enjoy such jurisdiction.”

The Bench held that the time spent in obtaining legal opinion and engagement of counsel for filing of appeal is not a ‘sufficient cause’ to condone the delay under proviso to Section 61(2) of IBC. It was observed that the Appellant could have easily approached NCLAT within 30 days since the appeal has been filed through electronic mode.

“Be that as it may, after examining the reasons given in paragraph (e) of the application we are of the considered opinion that it is not a sufficient cause for the purposes of seeking condonation of delay because the appellant could have easily approached the Appellate Tribunal within the period of 30 days as the appeals are filed through e-filing. In such circumstances, the reasons assigned in the application for condonation of delay is not acceptable and therefore the application is hereby dismissed.”

The application of condonation of delay as well as the appeal have been dismissed.

Case title: Anish Lawrence & Anr. v Renahan Vamakesan

Case No.: Company Appeal (AT) (CH) (Ins) No. 377 of 2023

Counsel for Appellants: Mr. Krishna Dath M, Mr. MS Viswanathan, Advocates.

Counsel for Respondent: Mr. Chandramouli Prabhakar-Resp/Caveator

Click Here To Read/Download Order