2022 (9) TMI 219 - AT - Insolvency and Bankruptcy

Defect in the appeal - defect in appeal is cured and the Appeal is refiled before the Appellate Tribunal beyond seven days - date of re-presentation of the Appeal shall be treated as a fresh Appeal or not - limitation prescribed for filing an Appeal before this Appellate Tribunal under Section 61 of Insolvency and Bankruptcy Code, 2016 or Section 421 of the Companies Act, 2013 - period under which a defect in the Appeal is to be cured and this Appellate Tribunal shall have no jurisdiction to condone the delay in refiling/re-presentation if it is beyond the limitation prescribed in Section 61 of the IBC or Section 421 of the Companies Act, 2013. HELD THAT - The filing of appeal (presentation) and refiling (re-presentation) are two different concepts and have been separately dealt with in the Rules. Rule 22 deals with the presentation of the appeal whereas Rule 26 envisages the re-presentation of the appeal after removal of the defects notified to the Appellant. Section 61(2) of the Code provides that appeal under Section 61(1) shall be filed within 30 days before the NCLAT. The expression filing as occurring in Section 61(2) is for filing of the appeal/presentation of the appeal. Hon ble Supreme Court in INDIAN STATISTICAL INSTITUTE VERSUS M/S ASSOCIATED BUILDERS AND ORS. 1977 (12) TMI 142 - SUPREME COURT laid down that condonation of delay as prescribed in an appeal is different from petition for excusing the delay in re-presentation. It is well accepted principle of statutory interpretation that if the meaning of words is plain effect must be given to it. The statute at best declare intent of Legislature. If the Legislature or Rule making Authority intended provision of limitation for re-presentation/refiling the same could have been done in unambiguous words - the limitation prescribed for filing an appeal under Section 61 and Section 421 of Companies Act cannot be imported while considering condonation of delay in refiling/ representation. The law laid down by this Tribunal in MR. JITENDRA VIRMANI VERSUS MRO-TEK REALTY LTD. ORS. 2017 (5) TMI 1791 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, BANGLORE and three Member Bench Judgment in ARUL MUTHU KUMAARA SAMY VERSUS REGISTRAR OF COMPANIES, CHENNAI 2020 (9) TMI 1268 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI that when the defects in appeal are cured after seven days and the same is refiled, it shall be treated as a fresh Appeal, does not lay down a correct law. The re-presentation of appeal after expiry of a period of 7 days or after extended period shall not be a fresh filing and shall only be refiling/representation. The limitation prescribed in filing an appeal under Section 61 of the Code or Section 421 of the Companies Act, 2013 shall not govern the period taken in an appeal for removal of the defects in refiling/re-presentation. Even if, there is a delay in refiling/re-presentation which is more than the period of limitation prescribed for filing an appeal under Section 61 of the Code and Section 421 of Companies Act, 2013, the same can be condoned on sufficient justification. Let the Appeals be listed for consideration of condonation of delay in refiling/re-presentation in accordance with law. List the Appeals on 01 st September, 2022 - The reference is answered accordingly.

Summary

Issues Involved:
1. Whether the law laid down by the Tribunal in "Mr. Jitendra Virmani Vs. MRO-TEK Realty Ltd. & Ors" and "Arul Muthu Kumaara Samy Vs. Registrar of Companies" regarding the treatment of refiled appeals as fresh appeals is correct.
2. Whether the limitation period prescribed for filing an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 or Section 421 of the Companies Act, 2013 governs the period for curing defects in the appeal and if the Tribunal has jurisdiction to condone delays in refiling beyond this limitation.

Issue-wise Detailed Analysis:

Issue 1: Treatment of Refiled Appeals as Fresh Appeals

The Tribunal examined whether the refiled appeals after curing defects should be treated as fresh appeals, as previously held in "Mr. Jitendra Virmani Vs. MRO-TEK Realty Ltd. & Ors" and "Arul Muthu Kumaara Samy Vs. Registrar of Companies". The previous judgments suggested that if defects are not removed within seven days, the appeal should be treated as a fresh appeal.

The Tribunal referred to Rule 26 of the NCLAT Rules, 2016, which governs the endorsement and scrutiny of petitions or appeals. Rule 26(2) allows for defects to be cured within seven days, and Rule 26(3) empowers the Registrar to extend this period for sufficient cause. The Tribunal found that Rule 26 does not indicate that re-presentation beyond seven days should be treated as a fresh appeal.

The Tribunal also considered judgments from the Supreme Court and High Courts, including "Indian Statistical Institute vs. M/s Associated Builders & Ors" and "Northern Railway vs. Pioneer Publicity Corporation Pvt. Ltd.", which distinguished between initial filing and refiling, indicating that the limitation for filing does not apply to refiling.

Thus, the Tribunal concluded that the re-presentation of an appeal after the expiry of seven days or an extended period should not be treated as a fresh filing but only as a refiling/representation.

Issue 2: Limitation Period for Curing Defects in Appeals

The Tribunal addressed whether the limitation period for filing an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016, or Section 421 of the Companies Act, 2013, also governs the period for curing defects in the appeal and if the Tribunal has jurisdiction to condone delays in refiling beyond this limitation.

The Tribunal noted that Section 61(2) of the Code and Section 421 of the Companies Act prescribe the limitation for filing an appeal but do not specify any limitation for refiling. Rule 26 of the NCLAT Rules, 2016, which governs refiling, does not provide for any limitation.

The Tribunal referred to the judgment in "Delhi Development Authority v. Durga Construction", which distinguished between the delay in initial filing and refiling, indicating that the delay in refiling is not subject to the same rigorous tests as the initial filing. The Tribunal also cited the Supreme Court's judgment in "Surendra Trading Company v. Juggilal Kamlapat Jute Mills Company Ltd. & Ors.", which held that the seven-day period for removing defects is directory and not mandatory.

Therefore, the Tribunal concluded that the limitation prescribed for filing an appeal under Section 61 of the Code or Section 421 of the Companies Act does not govern the period for curing defects in refiling. Even if there is a delay in refiling beyond the limitation period for filing an appeal, it can be condoned on sufficient justification.

Conclusion:

(a) The law laid down by the Tribunal in "Mr. Jitendra Virmani Vs. MRO-TEK Realty Ltd. & Ors" and "Arul Muthu Kumaara Samy Vs. Registrar of Companies" that refiled appeals should be treated as fresh appeals does not lay down the correct law. Re-presentation after seven days or an extended period should not be treated as fresh filing but as refiling/representation.

(b) The limitation period for filing an appeal under Section 61 of the Code or Section 421 of the Companies Act does not govern the period for curing defects in refiling. Delays in refiling beyond this limitation can be condoned on sufficient justification.

The reference is answered accordingly, and the appeals are to be listed for consideration of condonation of delay in refiling on 01st September, 2022.