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2021 (3) TMI 631 - AT - Insolvency and BankruptcyCondonation of delay of 193 days in filing appeal - sufficient cause for delay present or not - application for Review before NCLT - Jurisdiction of NCLT to decide on the issue - Doctrine of Merger - Balance of Convenience - HELD THAT - Section 61 of the Insolvency Bankruptcy Code enjoins that an Appeal shall be filed within 30 days before the National Company Law Appellate Tribunal and a further period of 15 days is provided only if sufficient cause is made out for preferring the Appeal within the extended period. Furthermore, the aspect of Consolidated Appeal does not arise in any event, the application for condonation of delay , is liable to be dismissed, of course with costs. One cannot ignore a prime fact that the term sufficient cause implies no negligence, nor inaction nor want of bonafides on the part of the litigant. In fact, in excluding the time, the period starting from the institution of former proceeding till the end of the said proceeding, would be calculated. If a litigant was bonafide prosecuting his rights in a Court / Tribunal due to wrong advise, the limitation shall remain in limbo , which is the underlying Principle of Section 14 of the Limitation Act, 1963 - The essence of sufficient cause is whether it was an act of prudence or reasonable man on the part of person filing an Appeal . It is to be taken note of that whether the Appellant had acted with reasonable diligence in prosecuting his Appeal . Although an Appeal is filed after the expiry of 30 days, if the Tribunal is satisfied that there was sufficient cause in not filing an Appeal , but such period had not exceeded 15 days, this Tribunal bearing in mind that an axiomatic principle in law that if a party/litigant was involved in a Bonafide Litigious Activity , then, the said time spent in such litigation can be excluded, because of the fact that the said party had acted with reasonable diligence in prosecuting his Appeal - in the present case, the action of the Petitioner/Appellant in moving the Hon ble Supreme Court of India in Civil Appeal No.3169 of 2019 after the Impugned Order dated 25.6.2019 passed by the Adjudicating Authority , instead of preferring an Appeal before this Tribunal and later filing of the Review Proceeding before the Adjudicating Authority , pursuant to the liberty granted by the Hon ble Supreme Court as per order dated 29.7.2019 are bonafide, of course based on act of prudence or reasonable person in prosecuting the concerned proceeding with reasonable due diligence. The time spent in prosecuting the legal remedy by the Petitioner/Appellant/Bank is required to be excluded while computing the period of limitation as envisaged under section 61(2) of the Insolvency Bankruptcy Code, 2016 - this Tribunal by adopting a practical, purposeful, meaningful, a rational approach and by taking a pragmatic view of the matter in a lenient and liberal manner condones the delay of 193 days in furtherance of substantial cause of justice. Application allowed.
Issues Involved:
1. Delay in filing the appeal. 2. Applicability of Section 14 of the Limitation Act, 1963. 3. Jurisdiction and maintainability of the Review Application. 4. Doctrine of Merger. Detailed Analysis: Delay in Filing the Appeal: The primary issue revolves around the delay of 193 days in filing the appeal. The appellant argued that the delay should be condoned due to the time spent in pursuing legal remedies, including filing a Review Application and approaching the Supreme Court. The appellant contended that the delay was not due to negligence or inaction but was a result of diligently pursuing legal remedies. Applicability of Section 14 of the Limitation Act, 1963: The appellant cited several judgments to argue that the time spent in bona fide legal proceedings should be excluded under Section 14 of the Limitation Act. The appellant emphasized that the Review Application was pursued in good faith and with due diligence, and that the time spent in these proceedings should be excluded from the limitation period. The appellant cited the following cases to support their argument: - P. Sarathy v. State Bank of India: The court held that any tribunal or authority deciding the rights of parties would be treated as a "court" under Section 14 of the Limitation Act. - M.P. Steel Corporation v. Commissioner of Central Excise: The court observed that the time spent in bona fide legal proceedings should be excluded. - Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department: The court emphasized that Section 14 should be construed liberally and that due diligence and good faith are essential prerequisites. - J. Kumaradasan Nair v. IRIC Sohan: The court held that the principles of Section 14 should be applied broadly to grant relief where a person has committed a mistake. - Suryachakra Power Corporation v. Electricity Department: The court held that the principles of Section 14 could be applied even when Section 5 is not applicable. - Baleshwar Dayal Jaiswal v. Bank of India: The court held that the absence of an express provision for condonation does not exclude the power of condonation. - Shakti Tubes v. State of Bihar: The court held that Section 14 applies to proceedings pursued bona fide and in good faith. - State of Goa v. Western Builders: The court held that Section 14 applies to the Arbitration and Conciliation Act, 1996. Jurisdiction and Maintainability of the Review Application: The Review Application filed by the appellant was dismissed by the Adjudicating Authority on the ground of lack of jurisdiction. The appellant argued that the Review Application was filed within 30 days of the Supreme Court's order and that the delay should be condoned. The respondent argued that the delay was beyond the initial period of 30 days and the further period specified under the statute. The respondent cited several judgments to argue that the delay should not be condoned: - Kalabharathi Advertising v. Hemant Vimalnath Narichania: The court held that no litigant can derive any benefit from the pendency of a case in a court of law. - Patel Chunnibhai Dajibha v. Narayanrao Khanderao Jambekar: The court held that an application filed after the prescribed period is not maintainable. - Union of India v. Popular Construction Company: The court held that the phrase "but not thereafter" in Section 34 of the Arbitration Act amounts to an express exclusion of Section 5 of the Limitation Act. - Chhattisgarh State Electricity Board v. Central Electricity Regulatory Commission: The court held that the outer limit for filing an appeal is 120 days. - Bengal Chemists and Druggists Association v. Kalyan Chowdhury: The court held that the period of limitation under Section 421(3) of the Companies Act is peremptory and cannot be extended beyond 45 days. - Municipal Corporation of Delhi v. Yashwant Singh Neghi: The court held that the principle of merger does not apply when a review petition is dismissed. Doctrine of Merger: The respondent argued that the doctrine of merger does not apply to the dismissal of the Review Application. The appellant contended that the time spent in pursuing the Review Application should be excluded while computing the limitation period. Conclusion: The Tribunal, after considering the arguments and the cited judgments, concluded that the appellant had acted in good faith and with due diligence in pursuing legal remedies. The Tribunal held that the time spent in bona fide legal proceedings should be excluded under Section 14 of the Limitation Act. The Tribunal condoned the delay of 193 days in filing the appeal, emphasizing that the term "sufficient cause" should be construed liberally to further the cause of justice. Final Order: The delay of 193 days in filing the appeal is condoned, and the application for condonation of delay is allowed without costs.
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