2022 (12) TMI 917 - AT - Insolvency and Bankruptcy

Delay in refiling of 321 days - adequate and sufficient reasons have been shown to justify that the delay in refiling of 321 days is reasonable for the application - HELD THAT - There is no quarrel over the proposition that in the absence of any time-limit prescription in considering the question of delay in re-filing either in the Code or the NCLAT Rules, this Tribunal is to that extent not powerless to entertain an application even if there has been delay in re-filing. As a matter of general practice, it is commonplace that the yardstick applicable while considering a prayer for condonation of delay for re-filing purposes is usually less rigid than the standards applied for condoning delay in filing. Pretty much on the same lines it has been urged before this Tribunal by the Appellant, that for reasons proffered, it may take a more liberal approach in allowing the condonation of refiling delay in the present case - There being no hard and fast rule in this regard makes it all the more incumbent on this Tribunal to examine refiling delays with greater degree of caution. Any question of delay condonation must go through deep and sufficient scrutiny in the context of the Code. The circumstances cited for condonation of delay in re-filing has to be in consonance with the aims and objects of the Code and not frustrate the scheme of the Code. The natural corollary that follows is that condonation of delay in re-filing is not available just for the asking. This Tribunal needs to be fully satisfied that the delay was unavoidable and the applicant was consistently diligent in pursuing the matter. The question of condoning any delay in re-filing would have to be considered in the context of the plausible explanation given to show that the delay was on account of reasons beyond the control of the applicant and could not be avoided despite all possible efforts by the applicant. Addition of new facts in the course of refiling which could not have been a part of the original version of the Appeals when it was filed in November 2021 thereby changing the frame of the Appeals as a clever manoeuvre has also been alleged by the Respondents. Though the allegation made is serious, however, since it has been admitted to be a mistake, we are not taking cognisance of it and refrain from making any comments thereon. The grounds cited to explain the 321 days refiling delay when viewed against the parameters of timely, effective and efficient resolution as envisaged in the Insolvency and Bankruptcy Code, 2016 fall hopelessly short of meeting the desirable standards of being adequate and sufficient. There are no merit in the applications filed for seeking condonation of 321 days delay in refiling the appeals, the same are dismissed.

Summary

Issues Involved:
1. Delay in refiling the appeal.
2. Adequacy and sufficiency of reasons for the delay in refiling.

Detailed Analysis:

1. Delay in refiling the appeal:

The primary issue revolves around whether the delay of 321 days in refiling the appeal is reasonable and permissible under the Insolvency and Bankruptcy Code (IBC) and the rules framed thereunder. The Appellant contended that the delay was due to bona-fide reasons such as the Covid-19 pandemic, the ill-health of the authorized representative, and the misplacement of files. They argued that NCLAT Rule 14 empowers the Tribunal to exempt parties from compliance with rule requirements to render substantial justice. The Appellant also cited several judgments to support their claim that public authorities should not use technical pleas to defeat legitimate claims.

In contrast, the Respondent argued that the reasons provided by the Appellant were perfunctory and lacked bona-fide. They emphasized that the Appellant did not provide sufficient details or documentary support for their claims and pointed out that the Appellant was actively litigating in other matters during the delay period. The Respondent also highlighted that the Appellant added new facts in the refiling, which amounted to a fresh filing.

2. Adequacy and sufficiency of reasons for the delay in refiling:

The Tribunal examined the reasons provided by the Appellant for the delay. The first reason, the ill-health of the authorized representative, was not supported by any proof and was deemed insufficient since the company could have authorized another representative. The second reason, the Covid-19 pandemic, was also rejected as the Appellant could have rectified the defects in a timely manner despite the pandemic. The third reason, the misplacement of files, lacked specific details and was not convincing.

The Tribunal emphasized the importance of adhering to the time-bound nature of the IBC, as reiterated in several Supreme Court judgments. They noted that undue benevolence in condoning delays would undermine the objectives of the IBC. The Tribunal concluded that the grounds cited by the Appellant fell short of meeting the desirable standards of adequacy and sufficiency required for condonation of delay.

Conclusion:

The Tribunal found no merit in the applications for condonation of the 321 days delay in refiling the appeals. Consequently, both the memo of appeals were rejected. The judgment underscores the importance of timely, effective, and efficient resolution as envisaged in the IBC and highlights the stringent standards for condoning delays in refiling appeals.