2024 (7) TMI 1522 - AT - IBC

Rejection of appeal on grounds of being filed beyond the prescribed time limit - Respondent No. 3 / Liquidator was allowed to include certain lands owned by the Appellants and given on Lease to the Corporate Debtor under Liquidation in the Liquidation Estate - Aggrieved Person under Section 61 of the I B Code, 2016 - HELD THAT - The Aggrieved Person in the context of the terminology used under Section 61 (1), would be a person who has not been conscious of an Impugned Order that prejudices his material right and such person could still invoke an Appellate Jurisdiction by seeking the leave of the Court. However, the interpretation of the word Aggrieved Person , could not be stretched to an extent, to accommodate a person who was conscious of his rights and has intervened in the proceedings, but whose intervention was ultimately rejected, because, for all practical purposes, such a person cannot be treated as to be a party to the proceedings based on which, he could have preferred an Appeal, Merely based on the fact that he was heard, his Appeal would not be sustainable, as long as he has not been included as a party to the proceedings. Appellants have not put a challenge to the Orders, passed on the Applications preferred by them to permit them to intervene. However, merely because of the fact that they were heard or they were described as Additional Respondents, before the NCLT, they will not get the status of being a party to the proceedings which will enable them to file an Appeal. Further, they would not be entitled to be treated as to be an Aggrieved Person , because, they were conscious of the proceedings, being held, before the NCLT. Since the Appellants have invoked Appellate Jurisdiction under Section 61 of the I B Code, 2016, as against the Impugned Order rendered by the NCLT without giving a challenge to the Orders passed on the IAs, rejecting their intervention, the Appeal at their behest would not be maintainable. The appeal need not be interfered and the same is dismissed.

Summary

Issues:
1. Timeliness of filing the Company Appeal.
2. Interpretation of the term "Aggrieved Person" under Section 61 of the I & B Code, 2016.
3. Disclosure of facts and clean hands doctrine in legal proceedings.

Detailed Analysis:

1. The Company Appeal (AT) (CH) (INS) No. 337/2022 was filed challenging the Impugned Judgment of the NCLT, Kochi Bench on 21.01.2022. The Tribunal rejected the appeal on 24.11.2022, citing it was filed beyond the prescribed time limit. However, the Hon'ble Apex Court allowed the appeal on 07.08.2023, directing that the delay of 1 day should have been condoned, and the appeal should be heard on merits by NCLAT.

2. The main argument raised by the Appellant was based on the interpretation of the term "Aggrieved Person" under Section 61 of the I & B Code, 2016. The Appellant contended that being heard by the Tribunal, even if not a party to the proceedings, should confer the right to prefer an appeal as an Aggrieved Person. However, the Tribunal held that merely being heard does not entitle a person to file an appeal unless they are included as a party to the proceedings.

3. The Tribunal emphasized the importance of disclosing all relevant facts and maintaining clean hands in legal proceedings. The Appellants failed to disclose that they had simultaneously filed a Writ Petition seeking an interim order while pursuing the Company Appeal. The Tribunal noted that approaching the Tribunal with clean hands is essential, and concealment or distortion of facts can be grounds for rejecting an appeal. The Tribunal also highlighted the Appellants' history of filing multiple Writ Petitions, indicating a lack of transparency in their approach to legal remedies.

In conclusion, the Tribunal dismissed the Company Appeal due to the Appellants' failure to challenge the rejection of their Intervention Petitions, lack of disclosure of simultaneous legal actions, and the principle of clean hands in legal proceedings. The Tribunal emphasized the importance of transparency and adherence to procedural requirements in seeking legal remedies.