2024 (8) TMI 101 - AT - Insolvency and Bankruptcy

Direction to the Respondents to pay the wages due as per the orders passed by the learned Labour Court - seeking Condonation of Delay of 466 days in filing appeal - reasaonable ground for delay exists or not - Section 42 of the I B Code, 2016 - HELD THAT - When the instant Appeal was being argued today, the learned Counsel for the Respondent/Liquidator, had contended that much confidence cannot be reposed to the reason, which has been taken by the Appellant for seeking condonation of delay in an Appellate proceedings under Section 42, for the reason being that for the purposes of gratuity and other past service dues, he has already been awarded an amount, under Section 36(4)(a)(iii) to the tune of Rs.3,23,758/- and paid the same to the Appellant in 2022 itself and that would be sufficient enough for the Appellant to meet out the expenditures of preferring the Appeal, before NCLT, Chennai. Hence, the financial crunch which is the ground taken in the Condone Delay Application, cannot to be taken as to be a satisfactory ground for overcoming the embargo of limitation of 14 days, as prescribed under Section 42 of the I B Code, 2016, and for the purposes of seeking condonation of an inordinate delay of 466 days, which is too in-ordinant and unexplained. On account of the reasons which have been assigned by the learned Adjudicating Authority for not accepting the plea taken by the Appellant and that no reasonable ground has been taken by the Appellant for seeking condonation of delay, the Appeal has been correctly dismissed on the ground of Limitation, which does not call for any interference, by this Tribunal , in the exercise of its Appellate Jurisdiction. Appeal dismissed.

Summary

Issues:
1. Delay in filing Company Appeals under Section 42 of the I & B Code, 2016.
2. Condonation of delay in filing the Appeals.
3. Financial crunch as a ground for seeking condonation of delay.
4. Rejection of Appeals due to delay beyond the prescribed period of limitation.

Issue 1: Delay in filing Company Appeals under Section 42 of the I & B Code, 2016

The judgment involves two Company Appeals, both concerning similar questions of facts and law, thus decided together. One Appeal challenges an impugned judgment related to wages due as per orders from the Labour Court, while the other challenges a dismissal by NCLT regarding a claim before the Liquidator. Both Appeals were rejected due to delay in filing beyond the prescribed period of limitation under Section 42 of the I & B Code, 2016.

Issue 2: Condonation of delay in filing the Appeals

The Appellant filed an application seeking Condonation of Delay of 466 days for filing the Appeal under Section 42 of the Code. The reasons cited for the delay were financial constraints preventing timely approach to the Tribunal after the decision of the Liquidator. The Adjudicating Authority considered the plea but ultimately rejected it based on guidelines set by the Hon'ble Apex Court, concluding that the reasons for delay were not satisfactory and appeared artificially created.

Issue 3: Financial crunch as a ground for seeking condonation of delay

The Appellant claimed financial difficulties as the primary reason for the delay in filing the Appeal. However, the Adjudicating Authority found this ground insufficient, especially considering that the Appellant had already received a significant sum for gratuity and past service dues in 2022, which could have covered the expenses of filing the Appeal. The Authority deemed the financial crunch as an unsatisfactory ground for seeking condonation of the substantial delay.

Issue 4: Rejection of Appeals due to delay beyond the prescribed period of limitation

The Adjudicating Authority dismissed the Appeals under Section 42 of the I & B Code, 2016, on the grounds of being time-barred due to the significant delay of 466 days. The rejection was based on the inordinate and unexplained nature of the delay, coupled with the lack of reasonable grounds presented by the Appellant for seeking condonation. The decision was upheld, citing the Hon'ble Apex Court's guidelines and the absence of interference required in the Appellate Jurisdiction.

In conclusion, the Company Appeals (AT) (CH) (INS) Nos. 230 & 231 / 2024 were dismissed due to the delay in filing beyond the prescribed period of limitation under Section 42 of the I & B Code, 2016, and the unsatisfactory grounds presented for seeking condonation of the substantial delay.