2021 (9) TMI 1156 - SC - Insolvency and Bankruptcy

Condonation of delay of 44 days (beyond a total period of 45 days) in preferring the appeal - powers to the Appellate Tribunal to condone the delay, which is only 15 more days - Section 61(2) of the IB Code - HELD THAT - The appeal preferred before the NCLAT was under Section 61(2) of the IB Code. As per Section 61(2) of the IB Code, the appeal was required to be preferred within a period of thirty days. Therefore, the limitation period prescribed to prefer an appeal was 30 days. However, as per the proviso to Section 61(2) of the Code, the Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of 30 days if it is satisfied that there was sufficient cause for not filing the appeal, but such period shall not exceed 15 days. Therefore, the Appellate Tribunal has no jurisdiction at all to condone the delay exceeding 15 days from the period of 30 days, as contemplated under Section 61(2) of the IB Code. In the present case, even the appellant applied for the certified copy of the order passed by the adjudicating authority on 8.4.2019, i.e., after a delay of 34 days. Therefore, even the certified copy of the order passed by the adjudicating authority was applied beyond the prescribed period of limitation, i.e., beyond 30 days. The certified copy of the order was received by the appellant on 11.04.2019 and the appeal before the NCLAT was preferred on 24.06.2019, i.e., after a delay of 44 days. As the Appellate Tribunal can condone the delay up to a period of 15 days only, the Appellate Tribunal refused to condone the delay which was beyond 15 days from completion of 30 days - it cannot be said that the learned Appellate Tribunal committed any error in not condoning the delay of 44 days, which was beyond the delay of 15 days which cannot be condoned as per Section 61(2) of the IB Code. An identical question came to be considered by a Constitution Bench of this Court in the case of NEW INDIA ASSURANCE CO. LTD. VERSUS HILLI MULTIPURPOSE COLD STORAGE PVT. LTD. 2020 (3) TMI 1368 - SUPREME COURT , where the Constitution Bench has ultimately concluded that the District Forum has no jurisdiction and/or power to extend the time for filing of response to the complaint beyond the period of 15 days, in addition to 30 days, as envisaged under Section 13(2)(a) of the Consumer Protection Act. Considering the statutory provisions which provide that delay beyond 15 days in preferring the appeal is uncondonable, the same cannot be condoned even in exercise of powers under Article 142 of the Constitution. In view of the settled proposition of law and even considering the fact that even the certified copy of the order passed by the adjudicating authority was applied beyond the period of 30 days and as there was a delay of 44 days in preferring the appeal which was beyond the period of 15 days which maximum could have been condoned and in view of specific statutory provision contained in Section 61(2) of the IB Code, it cannot be said that the NCLAT has committed any error in dismissing the appeal on the ground of limitation by observing that it has no jurisdiction and/or power to condone the delay exceeding 15 days. Appeal dismissed.

Summary

Issues Involved:
1. Jurisdiction of NCLAT to condone delay beyond 15 days as per Section 61(2) of the Insolvency and Bankruptcy Code (IBC), 2016.
2. Application of Article 142 of the Constitution of India to condone delay.
3. Privity of contract and the appellant's claim against the corporate debtor.

Detailed Analysis:

1. Jurisdiction of NCLAT to Condone Delay Beyond 15 Days:
The appellant challenged the NCLAT's refusal to condone a delay of 44 days in filing an appeal against the NCLT's order. Section 61(2) of the IBC mandates that an appeal must be filed within 30 days, with a possible extension of 15 days if sufficient cause is shown. The NCLAT dismissed the appeal, stating it lacked jurisdiction to condone delays beyond 15 days. The Supreme Court upheld this decision, citing the clear legislative intent and statutory limitation, which restricts the NCLAT from condoning delays exceeding the prescribed period. The Court referenced similar interpretations in cases like *Popular Construction Co.* and *Hilli Multipurpose Cold Storage Private Limited*, emphasizing that statutory limits must be adhered to strictly.

2. Application of Article 142 of the Constitution of India:
The appellant sought relief under Article 142 of the Constitution, arguing that the peculiar circumstances and the significant amount involved warranted condonation of the delay. The Supreme Court, however, reiterated that statutory provisions cannot be overridden by invoking Article 142. The Court cited precedents, including *Oil & Natural Gas Corporation Limited v. Gujarat Energy Transmission Corporation Limited*, which held that statutory commands regarding limitation periods must be respected and cannot be circumvented through Article 142. The Court emphasized that allowing such an exception would undermine the legislative intent and statutory framework.

3. Privity of Contract and the Appellant's Claim:
The appellant argued that funds siphoned off by PD Agro to the corporate debtor should be recoverable from the corporate debtor, despite no direct contractual relationship. The IRP and NCLT rejected this claim, citing the absence of privity of contract and any guarantee or letter from the corporate debtor. The Supreme Court did not delve deeply into this issue, given the primary focus on the jurisdictional and statutory limitation aspects. However, it noted that the appellant's claim was primarily against PD Agro, and the corporate debtor's involvement was indirect, further complicating the appellant's position.

Conclusion:
The Supreme Court dismissed the appeal, affirming the NCLAT's decision. It highlighted the importance of adhering to statutory limitations and the restricted scope of judicial intervention under Article 142 in such contexts. The judgment underscores the judiciary's role in upholding legislative intent and statutory provisions, even in cases involving significant financial stakes and complex factual backgrounds.