2019 (8) TMI 1492 - AT - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Time Limitation - jurisdiction to condone delay of 360 days - HELD THAT - Keeping in view Section 238A of I B Code, in case of any inconsistency, the provision of Section 61(2) will prevail over the Section 14 of the Limitation Act, 1963 and, therefore, this Appellate Tribunal has no jurisdiction to condone the delay beyond 15 days after the expiry of the period of 30 days in preferring the Appeal, even if, there is sufficient cause shown by the Appellant. The delay of 360 days cannot be condoned - However, this order will not come in the way of the Appellant or any other Shareholder/Director to move before the Adjudicating Authority (National Company Law Tribunal), Bengaluru Bench for exercising its inherent power conferred under Section 11 of the NCLT Rules, 2016, on the ground that the Appellant intends to settle the matter and has deposited the claimed amount with the Hon'ble High Court of Karnataka and passing an appropriate order under Rule 11, taking into consideration that the 'Committee of Creditors' has not yet been constituted. Appeal dismissed being barred by limitation.

Summary

Issues:
Admission of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor.
Condonation of delay of 360 days in filing an appeal.
Applicability of Section 238A of the I&B Code and the Limitation Act, 1963.
Jurisdiction of the Appellate Tribunal to condone delay in filing an appeal.
Possibility of settling the claim with the Operational Creditor under Section 12A of the I&B Code.

The judgment pertains to an appeal filed by the Managing Director of the Corporate Debtor against the order admitting an application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Appellant sought condonation of a 360-day delay in filing the appeal, citing the pendency of a Writ Petition where the Corporate Debtor deposited the claimed amount with the High Court of Karnataka. The Appellant requested the exclusion of this period for limitation purposes under Section 14 of the Limitation Act, 1963.

The issue of contention revolved around Section 238A of the I&B Code, which mandates the application of the Limitation Act, 1963 to proceedings before the Adjudicating Authority. However, the proviso to sub-Section (2) of Section 61 of the I&B Code limits the Appellate Tribunal's power to condone delay beyond 15 days after the 30-day filing period, even if sufficient cause is shown. The Tribunal clarified that Section 61(2) would prevail over Section 14 of the Limitation Act, 1963, emphasizing its lack of jurisdiction to extend the filing period beyond the statutory limit.

Despite the Appellant's intention to settle the claim with the Operational Creditor and the amount being deposited with the High Court, the Tribunal held that the delay of 360 days could not be condoned. However, the Tribunal granted liberty for the Appellant or other stakeholders to approach the Adjudicating Authority to settle the matter under Section 12A of the I&B Code. This option was available either before the Committee of Creditors, if constituted, or directly before the Adjudicating Authority.

Ultimately, the Appeal was dismissed as time-barred, and the Interlocutory Application was disposed of accordingly. The judgment underscored the strict adherence to statutory timelines in insolvency proceedings, limiting the Appellate Tribunal's discretion to condone delays beyond the specified period. The decision highlighted the importance of timely compliance with procedural requirements under the I&B Code to maintain the integrity and efficiency of the insolvency resolution process.