147 Days delay in filing Appeal was condoned on basis of equity

M.K. Resely Vs Union Bank of India (NCLAT Chennai)

Conclusion: Delay of 147 days in filing of appeal before NCLAT was condoned upon equity. The delay had occurred as the Appellant had challenged the Impugned Order before the High Court instead of NCLAT but on a bona fide basis and the time taken by the High Court in deciding the matter had been excluded by the NCLAT in computation of limitation.

Held: In the instant case, the Liquidator of M/s. Raihan Healthcare Private Limited (“Corporate Debtor”) had filed an application before the Adjudicating Authority seeking to add the personal properties of Mr. M.K. Resely and others (“Appellants”), into the Liquidation Estate of the Corporate Debtor. The Adjudicating Authority vide an order dated 21.01.2022 allowed the prayer of the Liquidator. Thereafter, the Appellants challenged the Impugned Order before High Court of Kerala on 26.01.2022, which was dismissed vide an order dated 22.04.2022. On 25.04.2022, the Appellants filed a writ appeal before the High Court of Kerala against the Order of dismissal dated 22.04.2022. The Writ Appeal was dismissed on 22.06.2022. Thereafter, the Appellants filed an appeal against the Impugned Order before the NCLAT on 06.07.2022. The time taken to file the appeal before NCLAT was 14 days i.e. from 22.06.2022 to 06.07.2022. Along with the appeal, the Appellants filed an Interim Application before the NCLAT seeking exclusion of the period from 25.01.2022 till 22.06.2022 (147 Days) in computing the period of Limitation of the Appeal. It was held that ‘on hand’, the ‘Appellants’, pray before this ‘Tribunal’, that the period from `25.01.2022 to 22.06.2022’, was liable to be excluded and that the ‘Hon’ble High Court of Kerala’ in ‘W.A. No.537/2022’, had permitted the ‘Appellants’, to file an ‘Appeal’ within ‘Two Weeks’, and that the `copy of the said Judgment’, in ‘Writ Appeal’, was received on 29.06.2022 and that the present Comp. App. (AT) (CH) (Ins) No.337/2022, was filed before this ‘Tribunal’, on 14.07.2022. In fact, a mere ‘running of the eye’, ‘contents’ of the ‘E-Portal’ received by this ‘Tribunal’ exhibited that ‘E-filing’ of the ‘instant Comp. App. (AT) (CH) (Ins) No.337/2022’, was made on 06-07­2022 22:07:946.  The High Court of Kerala had extended the interim order for a period of two weeks from 22.06.2022, enabling the Appellants to prefer an Appeal before the Appellate Tribunal. In view of the fact, that the Appellants had indulged in Bonafide Litigious Activity  before the Hon’ble High Court of Kerala, this Tribunal, by construing the ingredients of Section 14 of the Limitation Act 1963, in a liberal manner and by applying Equity, permitted the exclusion of period from `25.01.2022 till 22.06.2022 (147 days), in computing the Period of Limitation, and consequently disposed of the IA/990/2022, without Costs. The Bench excluded the period from 25.01.2022 till 22.06.2022 in computation of limitation period in view of equity. In view of the fact, that the ‘Petitioners’ / ‘Appellants’ had indulged in ‘Bonafide Litigious Activity’, in preferring the W.P. No.2832/2022 and W.A. No.537/2022, before the Hon’ble High Court of Kerala, this ‘Tribunal’, by construing the ingredients of Section 14 of the ‘Limitation Act’ 1963, in a liberal manner and by applying ‘Equity’, permitted the exclusion of period from `25.01.2022 till 22.06.2022’ (‘147 days’), in computing the ‘Period of Limitation’, and consequently `disposed of’ the IA/990/2022, without Costs.

FULL TEXT OF THE NCLAT JUDGMENT/ORDER

Background:

The ‘Petitioners’ / ‘Appellants’ have preferred the instant IA No.990/2022 in Comp. App. (AT)(CH)(Ins) No.337/2022, before this ‘Appellate Tribunal’, seeking to exclude the period from 25.01.2022 till 22.06.2022 (‘147 Days’) in computing the ‘Period of Limitation’.

Petitioners’ / Appellants’ Submissions :-

2. The ‘Petitioners’ / ‘Appellants’ have filed the Comp. App. (AT)(CH)(Ins) No.337/2022, on being dissatisfied with the ‘impugned order’ dated 21.01.2022, passed by the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench, Kerala) in ‘Allowing’ MA/76/KOB/2020 in IBA/240/KOB/2019, filed by the 3^rd Respondent / Liquidator, seeking direction from the ‘Adjudicating Authority’, (National Company Law Tribunal, Kochi Bench, Kerala), to ‘add’ the ‘personal properties’ of the ‘Petitioners’ / ‘Appellants’, into the ‘Liquidation Estate’ of the ‘Corporate Debtor’.

3. It is represented on behalf of the ‘Petitioners’ / ‘Appellants’ that as per the ingredients of Section 61 of the Insolvency & Bankruptcy Code, 2016, an ‘Appeal’, as against the ‘Order’ of the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench, Kerala) should have been filed within ‘30 Days’ from the date of ‘Receipt’ of the ‘Order’ of the ‘Authority’. In the instant case, the ‘impugned order’, was passed on 21.01.2022 in MA/76/KOB/2020 in IBA/240/KOB/2019 and uploaded on the website of the ‘National Company Law Tribunal, Kochi Bench’ on 25.01.2022.

4. The Learned Counsel for the Petitioners contends that they were advised that the ‘Order’ passed by the ‘Adjudicating Authority’ (National Company Law Tribunal, Kochi Bench, Kerala) was without ‘Jurisdiction’ and hence, they filed the ‘Writ Petition No.2832/2022’, before the ‘Hon’ble High Court of Kerala’ on 26.01.2022 and on 22.04.2022, the said Writ Petition came to be ‘dismissed’. Further, Writ Appeal No.537 of 2022 was filed before the Hon’ble High Court of Kerala (as against the ‘Order’ of ‘dismissal’ made in ‘Writ Petition No.2832/2022’) and an ‘interim order’, was passed. Later, the said ‘Appeal’ came to be ‘dismissed’.

5. The Learned Counsel for the ‘Petitioner’ adverts to the fact that in Writ Appeal No.537 of 2022, it was ordered that the ‘period spent’, before the ‘Hon’ble High Court of Kerala’, in prosecuting the case would be taken ‘note’ of, by the ‘Appellant Tribunal’, while considering the ‘Petition’ / ‘Condonation of Delay’. In this connection, the ‘Learned Counsel for the Petitioner’ points out that in the ‘Decision’ of the Hon’ble Supreme Court of India’ in Kalparaj Dharamshi and another v Kotak Investment Advisors Limited and another reported in (2021) 10 SCC at Page No.401, wherein it was observed and held that the Provisions of Section 14 of the Limitation Act, 1963, will apply to the ‘Proceedings’ before the ‘Tribunal’.

6. The clear cut stand of the ‘Petitioners’ is that, the instant Comp. App. AT (Ins) No.337/2022, should have been filed on or before 25.02.2022 and that the ‘Appellant Tribunal’, can ‘Condone the Delay’, if ‘sufficient cause’, is shown for a period not exceeding to ‘15 Days’. In this regard, it is the ‘fervent plea’ of the Petitioners that the period from 25.01.2022 (the date on which the ‘impugned order’ MA/76/KOB/2020 in IBA/240/KOB/2019 of the ‘Adjudicating Authority’ was uploaded on the website) to 22.06.2022 is liable to be excluded and that the ‘Hon’ble Division Bench of the High Court of Kerala’, had permitted the ‘Appellant’, to prefer an ‘Appeal’, within ‘Two Weeks’ from the date of the ‘Judgment’ in Writ Appeal dated 22.06.2022. As a matter of fact, the copy of the ‘Judgment in Writ Appeal No.537/2022 was received on 29.06.2022 and the ‘Appeal’ came to be filed on 14.07.2022, within the time granted by the Hon’ble High Court of Kerala.

7. The forceful contention advanced on behalf of the ‘Petitioners’ is that the ‘Tribunal’, may be pleased to exclude the period from 25.01.2022 till 22.06.2022 (‘147 days’), spent by the ‘Petitioners’ / ‘Appellants’, in prosecuting the ‘Writ Petition’ and ‘Writ Appeal’, before the Hon’ble High Court of Kerala, for the purpose of computing the ‘Period of Limitation’, in preferring the instant Comp. App. (AT)(CH)(Ins) No.337/2022 , as per Section 14 of the ‘Limitation Act 1963’. The Learned Counsel for the ‘Petitioners’ / ‘Appellants’ adverts to the following ‘dates’ for consideration of this ‘Tribunal’, which are as under: –