2024 (12) TMI 93 - AT - IBC

Condonation of 104 days delay in refiling of Company Appeal - sufficient reasons for delay or not - HELD THAT - The impugned order dated 30.04.2024 passed by the Adjudicating Authority has been challenged vide the present Company Appeal No. 1901 of 2024 which was e-filed on 01.06.2024 with a delay of 2 days. Since, sufficient cause had been shown for condonation of delay of two days in filing the Appeal, the same was allowed by this Tribunal. The Registry after due scrutiny, intimated the defects to the Applicant on 14.06.2024 and allowed time to remove the defects in 7 days. The Applicant, however, refiled the Memo of Appeal on 03.10.2024 after a delay of 104 days. There are no doubts that delay in refiling can be condoned only when the Tribunal is satisfied that there are reasonable and cogent grounds for not refiling the appeal on time. While agreeing that an application for condonation of refiling delay is a matter which is between the Applicant and the Bench in which the Respondent is not supposed to have any determinative say, nonetheless, it cannot be unmindful of the fact that the Bench is equally duty-bound to scrutinise the reasons for delay in refiling the petition and cannot allow any unexplained delay to pass muster. Though the rigours of condonation of delay in refiling are not as strict as condonation of delay in filing, it cannot be oblivious of the fact that IBC is a time bound process and no wanton delay can be permitted in IBC proceedings. The prime explanation attributed by the Ld. Counsel for the Applicant was difficulty faced by her in obtaining instructions from the client with regard to refiling the appeal and to take requisite steps for listing of the appeal. In the same breath, we also notice that submission was made by the Ld. Counsel for the Applicant that the Applicant was waiting and watching the proceedings before the CoC in respect of the resolution plan. This submission clearly shows that instead of making genuine endeavours to cure the defects, the Applicant was being opportunistic and trying to fine-tune the optimal timing for pressing the appeal. The Applicant was thus deliberately keeping the appeal in defects as a matter of strategy - the Applicant had slept over the defects wilfully and deliberately for more than three months and grounds now cited in the fresh affidavit cannot be construed to be genuine grounds for delay caused by personal difficulty of Applicant. There are no merit in the Application filed for seeking condonation of 104 days delay in refiling the appeal. The refiling delay application is rejected.

Summary

Issues Involved:

1. Condonation of delay in refiling the appeal.
2. Justification for the delay provided by the Appellant.
3. Respondent's objections to the condonation of delay.
4. Tribunal's scrutiny and decision on the application for condonation of delay.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Refiling the Appeal:

The primary issue before the Tribunal was whether to condone a delay of 104 days in refiling the Company Appeal (AT)(Ins) No. 1901 of 2024. The Tribunal noted that the appeal was initially filed on 01.06.2024, and defects were communicated by the Registry on 14.06.2024. The Appellant, however, only refiled the appeal on 03.10.2024, resulting in a delay of 104 days. The Tribunal emphasized that while the condonation of delay in refiling is generally more lenient than the initial filing, it still requires reasonable and cogent grounds to be presented.

2. Justification for the Delay Provided by the Appellant:

The Appellant argued that the delay was due to personal difficulties faced by the Counsel and the need to obtain instructions from the client, who was based in Germany. The Appellant also highlighted ongoing issues with the Resolution Professional (RP) and the need to decide whether to challenge certain orders or pursue the appeal. The Appellant contended that these circumstances justified the delay and sought to submit a detailed affidavit explaining the reasons for the delay.

3. Respondent's Objections to the Condonation of Delay:

The Respondent opposed the application, arguing that the Appellant had not provided any cogent explanation for the inordinate delay. The Respondent contended that the Appellant had willfully allowed the appeal to remain defective as a strategic choice rather than due to genuine reasons. The Respondent emphasized that condonation of delay must be substantiated by sufficient grounds and cited a previous Tribunal judgment to support their position.

4. Tribunal's Scrutiny and Decision on the Application for Condonation of Delay:

The Tribunal carefully examined the explanations provided by the Appellant and the objections raised by the Respondent. It found that the Appellant had not demonstrated due diligence in curing the defects and that the reasons cited for the delay were not convincing. The Tribunal observed that the Appellant's conduct suggested a strategic delay rather than unavoidable circumstances. The Tribunal concluded that the Appellant had failed to provide genuine grounds for the delay and rejected the application for condonation of delay. Consequently, the Memo of appeal was also rejected.

In summary, the Tribunal emphasized the importance of timely compliance with procedural requirements in insolvency proceedings and held that the Appellant's failure to provide adequate justification for the delay warranted the rejection of the application for condonation of delay.