Time to file Appeal in NCLAT against Order of Adjudicating Authority

This Article discusses Time Period for Filing of Appeal in National Company Law Appellate Tribunal (NCLAT) against the order of adjudicating authority in the light of Section 62(2) of Insolvency and Bankruptcy Code, 2016 and NCLAT Judgments in the case of Steam Amod Amladi V/s. Mrs. Sayali Rane & Anr and Nityanand Singh and Co. V/s Ferrous Infrastructure Pvt. Ltd. 

Factual Background:

I. Appellant claims to be investor of CD. Appellant alleging initiation of CIRP by Mumbai bench of NCLT u/s 9.

II. Appellant earlier made application in NCLT Mumbai Bench to recall the order dated 2^nd May, 2017.

III. NCLT: Adjudicating authority rejected the prayer by impugned order dated 3^rdOctober, 2017 on the ground that NCLT has no power to recall the order or dismiss the petition after admission.

In the present appeal the order dated “3^rd October, 2017” challenged by the Appellant.

IV. Appellant: submitted that the petition u/s 9 preferred by the OC was filed fraudulently in connivance with the directors. According to him OC is also liable to be punished u/s 65 of “I & B Code, 2016”.

FINDINGS OF THE NCLT BENCH:

Hon’ble NCLAT states that,

First: The Appellant is an Investor therefore, the Appellant cannot claim to be an ‘aggrieved person’ for preferring appeal against the order dated 2nd May, 2017 passed by Adjudicating Authority whereby the application under Section 9 of the ‘I&B Code’ was admitted. In fact, the Appellant being an investor is entitled to file its claim before the ‘Insolvency Resolution Professional Therefore, No relief can be granted to the Appellant.

Second: Further, as the order dated 2nd May, 2017 is not under challenge in this appeal this Appellate Tribunal cannot express any opinion with regard to the order of admission dated 2nd May, 2017. If the said order dated 2nd May, 2017 is allowed to be challenged, the appeal will be barred by limitation under sub-section (2) of Section 61 of the ‘I&B Code’.

For the reasons aforesaid, no relief can be granted.

Section 61(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.

Conclusion: in the above mentioned case 30 days has already been passed from the original order dated 2^nd May, 2017. Therefore, one can opine that Appellant petition restricted under Limitation provisions of Section 61(2)

ONE MORE CASE

B. Factual Background:

I. This appeal has been preferred by the appellant (OC) against order dated 28^thSeptember, 2017 whereby application u/s 9 of I&B Code, 2016 has been rejected.

II. NCLAT: Appellant applied for certified copy of the impugned order after more than 30 days on 30^th October, 2017, which was supplied to him on the same date i.e. 30^th October, 2017.

III. The delay in making such application has not been explained. The appeal, after removal of defects, was filed on 27^thNovember, 2017.

IV. Thus the appeal has been preferred after 60 days of the order i.e. 28^thSeptember, 2017.

FINDINGS OF THE NLCT BENCH:

Hon’ble NCLAT states that,

An appeal can be preferred by an aggrieved person under sub-section (1) and sub-section (2) of Section 61 of the I & B Code. As per sub-section (2) of Section 61 such appeal is to be filed within thirty days. As per proviso thereto, the Appellate Tribunal has power to condone the delay, if it is satisfied that there was sufficient cause for not filing the appeal but such period cannot exceed fifteen days from beyond the period of thirty days.

In this case as the appeal has been preferred after 60 days of the impugned order, we hold that Appellate Tribunal has no jurisdiction to condone the delay.

For the reasons aforesaid, we dismiss the application for condonation of delay. In the result the appeal is dismissed being barred of limitation.

Conclusion:

As per sub-section (2) of Section 61 such appeal is to be filed within thirty days. As per proviso thereto, the Appellate Tribunal has power to condone the delay, if it is satisfied that there was sufficient cause for not filing the appeal but such period cannot exceed fifteen days from beyond the period of thirty days.

(Author – CS Divesh Goyal, ACS is a Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com)