2023 (4) TMI 776 - AT - Insolvency and Bankruptcy

Condonation of delay of 14 days in filing appeal - Direction for reversal of the transaction in favour of the Corporate Debtor - Section 43 of I B Code - proceeding before the Adjudicating Authority against the Respondent No.2 proceeded ex-parte since despite serving notice, Respondent No.2 (Appellant herein) did not appear - HELD THAT - The judgment of V. Nagarajan vs. SKS Ispat and Power Limited Ors. 2021 (10) TMI 941 - SUPREME COURT has considered provisions of Section 61 of the I B Code providing for period of limitation for filing the appeal. The Hon ble Supreme Court while noticing the Section 61 has also noted the provisions of Section 421 of Companies Act, 2013 which provides for limitation for filing appeal. Hon ble Supreme Court has noticed the legislative change under Section 61 and has held that change in the scheme of Section 61 is a notable difference and the absence of the words from the date on which a copy of the order of the Tribunal is made available to the person aggrieved has significance - The Hon ble Supreme Court, thus, has clearly held that running of the limitation shall start from the date of pronouncement of the order and it is not dependent on the communication of the order to aggrieved person. The Appellant did not appear before the Adjudicating Authority despite service of notice, hence, it will be treated that it was served and the Appellant could not be heard in saying that the order dated 22.12.2022 is exparte and limitation to file appeal shall only begin when he has knowledge of the order. This submission of the Appellant cannot be accepted. It is further observed that even the ground taken in the delay condonation application that Appellant came to know about the order when he received letter of the Liquidator on 08.01.2023 is unfounded and not supported by any material. Whereas the Liquidator in his reply has brought material on record which indicate that order was sent by Liquidator on 04.01.2023 by email to the Appellant. Thus, even if, for argument sake only, if limitation is calculated from date of receipt of email, then also the Appeal filed was beyond 15 days after expiry of limitation. There are no ground to allow the delay condonation application. The delay condonation application is dismissed.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Commencement of limitation period for filing the appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016.
3. Ex-parte proceedings and their impact on the limitation period.

Summary:

Condonation of Delay:
The appellant sought condonation of a 14-day delay in filing the appeal against the order dated 22.12.2022 by the Adjudicating Authority (NCLT), which directed the reversal of a transaction in favor of the Corporate Debtor. The appellant argued that the order was received on 08.01.2023, and thus, the appeal filed on 22.02.2023 was within the permissible period. The Liquidator opposed, stating the order was communicated via email on 04.01.2023 and delivered by Speed Post, and the appellant provided no material evidence of receiving the order on 08.01.2023.

Commencement of Limitation Period:
The Tribunal referred to the Supreme Court judgment in "V. Nagarajan vs. SKS Ispat and Power Limited & Ors." which clarified that the limitation period for filing an appeal under Section 61 of the IBC starts from the date of pronouncement of the order, not from the date the order is communicated to the aggrieved party. The appellant is expected to apply for a certified copy of the order upon its pronouncement, and the time taken to obtain this copy can be excluded from the limitation period. The Tribunal emphasized that the IBC is a complete code in itself, and its provisions override inconsistencies with other laws.

Ex-Parte Proceedings:
The appellant contended that the order was passed ex-parte, and thus, the limitation should start from the date of knowledge of the order. However, the Tribunal noted that the appellant was served notice but did not appear before the Adjudicating Authority. Therefore, the order cannot be treated as ex-parte for the purpose of calculating the limitation period.

Conclusion:
The Tribunal concluded that the appeal was filed beyond the permissible period, even if calculated from the date of receipt of the email on 04.01.2023. The delay condonation application was dismissed, and consequently, the memo of appeal was rejected.