2020 (12) TMI 887 - HC - Insolvency and Bankruptcy

Maintainability of appeal - appeal is filed beyond limitation and even the period extendable by the National Company Law Appellate Tribunal - Validity of Appointment of Liquidator and liquidation of company - HELD THAT - The admitted case of the petitioner is that the limitation as prescribed under Section 61 Sub Section (2) read with proviso is a strict period of limitation which cannot be extended. Admittedly the period to file an appeal has already lapsed. High Court should resist from exercising jurisdiction under Article 227 of the Constitution of India specifically in a case where a remedy of appeal is provided and a strict period of limitation is made applicable and the aggrieved party permits the period of limitation to lapse, maybe for valid or reasons otherwise - Since order dated 15.10.2020 was admittedly an appealable order, though subject to the period of limitation and no appeal has been filed by the petitioner within the statutory period or the extendable period under proviso to Section 61(2) of the Insolvency and Bankruptcy Court, 2016, I am not inclined to exercise the discretionary powers under Article 227 of Constitution of India to permit a challenge to the said order. The contention of learned counsel for the respondent that Section 5 of the Limitation Act may apply does not arise for consideration in these proceedings. Though, it may arise in case petitioner were to file an appeal before the Appellate Tribunal, in which case it would be for the Appellate Tribunal to consider as to whether provisions of Section 5 of the Limitation Act would apply or not - Petition dismissed.

Summary

Issues Involved:
1. Jurisdictional challenge to the appointment of a liquidator beyond limitation.
2. Applicability of Section 61 of the Insolvency and Bankruptcy Code, 2016 regarding the timeline for filing an appeal.
3. Discretionary powers of the High Court under Article 227 of the Constitution of India in the context of a strict limitation period for appeals.
4. Interpretation of Section 5 of the Limitation Act in relation to extending the period for filing an appeal.

Analysis:
1. The petitioner challenged the appointment of a liquidator beyond the limitation period, contending that the order was without jurisdiction due to the delay in initiating proceedings. The petitioner argued that an application seeking recall of the order was filed before the appointment, but the Tribunal proceeded with liquidation without addressing this application.

2. The petitioner highlighted the limitation period for filing an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016, which mandates a strict timeline of 30 days for filing an appeal, extendable by a maximum of 15 days by the National Company Law Appellate Tribunal. The petitioner's inability to file an appeal within this timeframe was attributed to the counsel's illness and subsequent isolation due to Covid-19.

3. The judgment emphasized the discretionary nature of the High Court's powers under Article 227 of the Constitution of India, cautioning against using it as a substitute for an appeal. It was noted that the petitioner allowed the limitation period to lapse, which limited the court's inclination to entertain the challenge under Article 227.

4. The interpretation of Section 5 of the Limitation Act was discussed, with the petitioner arguing against its applicability in cases where the statute specifies a limited extension for filing appeals. The judgment clarified that the applicability of Section 5 would be a matter for the Appellate Tribunal to consider if the petitioner chose to file an appeal before them.

In conclusion, the High Court dismissed the petition, citing the failure to file an appeal within the statutory period or the extendable period provided under the law. The judgment underscored the importance of adhering to strict limitation periods for appeals and refrained from exercising discretionary powers under Article 227 in this context.