2022 (8) TMI 650 - Tri - Insolvency and Bankruptcy

Condonation of delay of 1150 days in filing petition - sufficient reasons to condone delay or not - HELD THAT - The above delay condonation petition was filed on 01.03.2021 and whereas the main Company Petition in which the Interlocutory Application was filed on 19.09.2019. Thus, admittedly the present I.A. is not filed along with the Main Company Petition and therefore the Petitioner has to explain the delay in not filing the above I.A. from 19.09.2019 till the filing date on i.e. 01.03.2021 since there is already a delay in filing the main Company Petition and therefore the delay is more than 1150 days. The only reason assigned in Para 18 of the Petition is that the Petitioner is exploring all the options available under law for recovery of its legitimate dues and on the other hand was also negotiating for settlement. The Petitioner except devoting more space in pleading various facts with regard to initiating various proceedings against the Corporate Debtor for recovery before the DRT etc. did not explain even a single day s delay. Condonation of delay is the discretionary jurisdiction conferred on the Courts and Tribunals and the Courts and Tribunals while dealing with the applications of condonation of delay have to liberally condone the delay in order to meet the ends of justice. At the same time, a duty is cast upon the Applicant to broadly and properly explain the overall delay. When once the Petitioner properly explains the delay, the number of days delay to be condoned is immaterial - Condonation of delay is the discretionary jurisdiction conferred on the Courts and Tribunals and the Courts and Tribunals while dealing with the applications of condonation of delay have to liberally condone the delay in order to meet the ends of justice. At the same time, a duty is cast upon the Applicant to broadly and properly explain the overall delay. When once the Petitioner properly explains the delay, the number of days delay to be condoned is immaterial It is the admitted case of the Petitioner that the default in this case was occurred way back in 2013 and the State Bank of Patiala initiated recovery measures by filing various proceedings in 2014 itself and the present Company Petition is filed in 2019. Since this Tribunal is conscious of the fact that the Courts and Tribunals while dealing with delay condonation application shall not look into the merits of the main case, this Bench is not making any comments as to whether the Main Company Petition is within limitation or not. There is an inordinate delay of more than 1150 days in this case and the Petitioner has miserably failed to calculate the exact number of days delay apart from broadly explaining the delay and such an inordinate delay cannot be condoned for mere asking simply because the petitioner is a premier public sector bank - Petition dismissed.

Summary

Issues Involved:
1. Condonation of delay in filing the Company Petition.
2. Justification for the delay by the Applicant.
3. Respondent's objections to the condonation of delay.
4. Tribunal's discretion in condoning delays.

Issue-wise Detailed Analysis:

1. Condonation of delay in filing the Company Petition:
The Applicant sought condonation of a delay of 1150 days in filing the Company Petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The delay was calculated from 13.03.2016 to 18.09.2019. The Applicant argued that the delay was due to exploring various legal avenues for recovery and negotiating settlements.

2. Justification for the delay by the Applicant:
The Applicant, State Bank of India (SBI), explained that the delay was due to multiple factors, including the amalgamation of State Bank of Patiala with SBI, ongoing recovery actions under the SARFAESI Act and the Recovery of Debts and Bankruptcy Act, and negotiations for settlement. The Applicant contended that the delay was not intentional and cited the Supreme Court's judgments in B.K. Educational Services Pvt. Ltd. v. Parag Gupta & Associates and Babulal Vardharji Gurjar v. Veer Gurjar Aluminium Industries Pvt. Ltd. & Anr. to support their case for condonation of delay.

3. Respondent's objections to the condonation of delay:
The Respondent opposed the condonation of delay, arguing that the application was misconceived, lacked details, and was not maintainable in law. They contended that the delay was a complete afterthought and that the Applicant approached the Tribunal with unclean hands. The Respondent also questioned the authority of the deponent to file the application and argued that the application was barred by the law of limitation.

4. Tribunal's discretion in condoning delays:
The Tribunal noted that condonation of delay is a discretionary jurisdiction and must be exercised liberally to meet the ends of justice. However, the Applicant must properly explain the overall delay. The Tribunal found that the Applicant failed to explain the delay adequately, especially the period from 22.02.2017 (the date of amalgamation) to the filing date of the Interlocutory Application (01.03.2021). The Tribunal criticized the Applicant's mechanical approach and lack of compelling reasons for the delay.

Findings:
The Tribunal observed that the Applicant did not file the Interlocutory Application for condonation of delay along with the main Company Petition, indicating a lack of diligence. The Tribunal emphasized that the Applicant, being a premier public sector bank with legal experts, should have managed the timeline better. The Tribunal concluded that the Applicant failed to explain the overall delay and that such an inordinate delay could not be condoned merely because the Applicant is a public sector bank.

Conclusion:
The Tribunal rejected the Interlocutory Application for condonation of delay due to the Applicant's failure to explain the inordinate delay of more than 1150 days. Consequently, the main Company Petition was also dismissed.