Rudra Mercantile Pvt. Ltd Vs Swastik Metaforge Pvt. Ltd (Delhi NCLAT)
Summary: The National Company Law Appellate Tribunal (NCLAT), New Delhi, dismissed an appeal filed by Rudra Mercantile Pvt. Ltd. challenging the order dated 28 March 2023 of the National Company Law Tribunal (NCLT), New Delhi Bench-III, which rejected the company’s application for restoration of an insolvency petition dismissed for non-prosecution. The Adjudicating Authority had rejected Rest.A-47/2023 in IB-2559(ND)/2019 because the application was filed beyond the limitation period prescribed under Rule 48(2) of the NCLT Rules, 2016, without a separate application seeking condonation of delay.
The appellant submitted that its authorised representative, a 75-year-old woman suffering from severe illness and dependent on oxygen supplements and B-PAP support, could not ascertain the status of the proceedings and had relied upon her previous counsel. According to the appellant, its counsel failed to respond promptly and subsequently disclosed that he had not appeared before the Adjudicating Authority, resulting in dismissal of the petition for non-prosecution. By the time the appellant learned about the dismissal and engaged new counsel, the restoration application had been delayed. The respondent opposed the appeal, referring to the alleged delay of 150 days, absence of an application for condonation of delay, and repeated non-appearance of the appellant on earlier hearing dates.
The respondent relied upon the Supreme Court judgment in Esha Bhattacharjee Vs Managing Committee of Raghunathpur Nafar Academy & Ors., (2013) 12 SCC 649, to argue that condonation cannot be granted routinely without proper grounds. The NCLAT found that the reasons advanced by the appellant were insufficient and that no sufficient cause had been established for allowing the appeal. Without examining the merits of the underlying insolvency dispute, the Tribunal upheld dismissal for non-prosecution and dismissed the appeal without costs.
Cases Discussed
1. Esha Bhattacharjee Vs Managing Committee of Raghunathpur Nafar Academy & Ors. — (2013) 12 SCC 649; Civil Appeal Nos. 8183–8184 of 2013; Supreme Court of India; decided on 13 September 2013. Relied upon by the respondent to argue that condonation of delay cannot be granted as a matter of course without proper grounds. The NCLAT ultimately found the appellant’s explanation insufficient.
FULL TEXT OF THE NCLAT JUDGMENT/ORDER
1. This appeal is directed against the order dated 28th March, 2023 passed by the ‘National Company Law Tribunal, Bench-III, New Delhi (hereinafter referred as to ‘the Adjudicating Authority) by which an application bearing Rest.A-47/2023 in IB-2559(ND) 2019 filed by the M/s. Rudra Mercantile Pvt.Ltd (Appellant herein) for restoration of the petition, has been dismissed.
2. While passing the impugned order, the Adjudicating Authority has observed the followings:
“Rest.A-47/2023
“This application has been filed seeking restoration of IB-2559/ND/2019 which was dismissed for non-prosecution vide order dated 05.08.2023. The application has been filed on 21.02.2023 after the period of limitation provided under Rule 48(2) of NCLT Rules, 2016. This application has been accompanied with any terms of application seeking condonation of delay .
The present application is therefore dismissed.”
3. Ld. Counsel for the Appellant has submitted that the Authorized Representative of the Appellant Company is 75 years old woman and was suffering from severe illness, surviving on Oxygen Supplements, B-PAP in her day to day life. Therefore, the Authorized Representative of the Appellant company could not get the status of the petition filed before the Adjudicating Authority and was thus dependant on his counsel. Thereafter, the Appellant had inquired about the status of her petition from its erstwhile Counsel but his counsel did not respond in time and later on informed the Appellant that he could not able to appear before the Adjudicating Authority to which the Adjudicating Authority has dismissed the petition for non-prosecution By the time the Appellant came to know about the orders, there was already a delay. The Appellant with its new Counsel had approached the Adjudicating Authority by filing a restoration application bearing Rest.A-47/2023. The Adjudicating Authority vide its impugned order dated 28.03.2023 has dismissed the said application on the ground of delay in filing of the Application for restoration.
4. On notice, ld. Counsel for the Respondent has appeared and opposed the appeal on similar pleas which has been recorded by the Adjudicating Authority in the impugned order. Further, Ld. Counsel for the Respondent has submitted that the Appellant has neither given any cogent reasons in the application seeking restoration of the Application for 150 days’ delay in filing the Restoration Application nor filed any application for condonation of delay to condone those days. It is submitted that non-appearance of the Appellant has been recorded in the order dated 23.11.2021 passed by the Adjudicating Authority which read as under: “From the previous orders, it is also seen that the Petitioner in the matter has not been present on 18.03.2021, 10.08.2021 and on today’s hearing, no one present on behalf of the Operational Creditor. In view of the above, the finally listed for further consideration as a last chance for ensuring the appearance on behalf of the operational creditor on 11.01.2022 on the said date, the petition shall be dismissed in default of non-prosecution”
5. Ld. Counsel for the Respondent has referred the Judgment of Hon’ble Supreme Court in the case ofEsha Bhattacharjee Vs. Managing Committee of Raghunathpur Nafar Academy & Ors.(2013) 12 SCC 649, it is held that the “condonation of delay cannot be granted as a matter of course and such a liberal approach cannot be taken when there are no proper grounds given by the Appellant/Applicant”.
6. We have heard Counsels for the parties and are of the considered opinion that the reason given by the Appellant are not sufficient reason to allow the appeal.
7. In view of the aforesaid facts, we are satisfied that there is no sufficient cause assigned by the Appellant for the purpose of allowing the present appeal. Without going into the merit of the case, we observe that the Adjudicating Authority has rightly dismissed the petition for non-prosecution
8. Hence, the present appeal is dismissed. No order as to costs.
