9911796707
TMI Blog2022 (5) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... net Ltd. dated 12.10.2012 as a service provider. The Agreement was valid from 12.10.2012 to 11.10.2014. The Appellant - Operational Creditor provided services to the Times Business Solutions Ltd., for which an amount of Rs.87,81,526.80/- became due. (ii) On 26.09.2014, Times Business Solutions Ltd., to whom the Operational Creditor provided services was merged with another entity (Respondent herein), that is, Times Internet Ltd. - Corporate Debtor. Company Petition No.682 of 2016 was filed by the Appellant against Times Business Solutions Ltd. under Sections 433(e), (f), 434(1)(a) & (c) read with Section 439 of the Companies Act, 1956 seeking winding up against the Respondent Company. The High Court of Delhi vide order dated 13.03.2019 disposed of the Company Petition observing that Petition under Section 433 (e) can only be entertained after statutory notice has been sent against the Company namely - Times Internet Ltd., with whom the Times Business Solutions Ltd. was merged by order dated 26.09.2014 passed by the High Court of Delhi under Section 393 and 394 of the Companies Act. The Company Petition was filed without serving notice to the transferee Company, hence, the Petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y formal Application for condonation of delay. 7. The learned Senior Counsel for the Respondent Shri Krishnendu Datta refuting the submissions of the learned Counsel for the Appellant contends that the Appellant is not entitled to claim any benefit under Section 14 of the Limitation Act, since the dismissal of the winding up petition by the High Court of Delhi was not on ground of any defect of jurisdiction, but the Petition was dismissed since the Appellant failed to give Statutory Notice to the Corporate Debtor as required by Section 434 of the Companies Act, 1956. Thus, the reason for dismissal of the winding up petition cannot be a ground to the Appellant to claim benefit under Section 14 of the Limitation Act. It is submitted that date of default as claimed by the Appellant itself in Section 9 Application is 02.01.2014, hence three years' period expired on 01.02.2017 and the Application under Section 9 having been filed on or after 30.01.2020 has rightly been dismissed by the Adjudicating Authority as barred by time. It is submitted that the Appellant has not filed any application before the Adjudicating Authority for condonation of delay under Section 5 or seeking benefit un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to file any application for condoning the delay. Thus, three years from the date when the right accrues is the period when OC gets the right to trigger CIRP. The existence of debt and default on the part of the CD cannot be established as the due debt is stated to be on 03.03.14, which is barred by limitation period which expired on the year 2017." 11. From the above discussion of the Adjudicating Authority, it is clear that Adjudicating Authority proceeded on the premises that debt became due on 03.03.2014 and three years' period expired in 2017. Hence, filing of the Application on 30.01.2020 was beyond the time and further the Appellant failed to file any application for condonation of delay. Question No.(1) 12. The question to be answered is as to whether the period during which winding up petition filed by the Appellant remained pending before the High Court of Delhi, deserves to be excluded under Section 14 of the Limitation Act? 13. Section 14 of the Limitation Act provides as follows: 14 Exclusion of time of proceeding bona fide in court without jurisdiction. - (1) In computing the period of limitation for any suit the time during which the plaintiff has been pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... list of dates, which is part of Section 9 Application in Item Nos.7 and 8, following has been stated: "07 14/07/2016 The Operational Creditor filed a Petition for winding up under the sections 433(e),(f), 434(1) (a) & (c) Read with Section 439 of the Companies Act, 1956. 08 13/03/2019 That the Petition by the Order of the High Court of Delhi at New Delhi was disposed of and dismissed with the Liberty to the Petitioners to take steps as per Law against the actual entity. That the Petition filed by the Operational Creditor had made Times Business Solutions Ltd the Respondent in the winding up petition which had ceased to exist. The company Times Business Solutions Ltd and merged into Times Internet Ltd. by virtue of an Order passed by this Court on 26/09/2014 under sections 391-394 of the Companies Act. The Operational Creditor impleaded the new entity however, as per the order of the High Court of Delhi in view of the fact that the statutory Notice under section 434(1)(a) of the Companies Act was not issued to the proposed respondent i.e., Times Internet Ltd., the said company cannot be impleaded or subjected to a winding up proceedings. Thus the winding up petition was dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this context, we may now refer to few judgments of the Hon'ble Supreme Court where Section 14 of the Limitation Act came for consideration. In Roshanlal Khuthalia and Ors. vs. R.B. Mohan Singh Obrai - (1975) 4 SCC 628, while interpreting Section 14 of the Limitation Act, the Hon'ble Supreme Court made following observation: "27......Moreover, the defects that will attract the provision are not merely jurisdictional strictly so called but others more or less neighbours to such deficiencies. Any circumstance legal or factual, which inhibits entertainment or consideration by the Court of the dispute on the merits, comes within the scope of the section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right [See(1971) 2 SCR 397 at 401 [India Electric Works Ltd. v. James Mantosh, AIR 1971 SC 2313, 2316 : (1971) 2 SCR 397, 401] ]. In the Associated Hotels case (i. e. the very lis in its earlier round on the execution side) this Court pointed out [(1961) 1 SCR 259 at 272 [Associated Hotels of India Ltd. v. R.B. Jodhu Mal Kuthalia, AIR 1961 SC 156, 163] ] that the question was one of initial jurisdiction of the Court t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its application, inasmuch as it is not confined in its applicability only to cases of defect of jurisdiction but it is applicable also to cases where the prior proceedings have failed on account of other causes of like nature. The expression "other cause of like nature" came up for the consideration of this Court in Roshanlal Kuthalia v. R.B. Mohan Singh Oberoi [(1975) 4 SCC 628] and it was held that Section 14 of the Limitation Act is wide enough to cover such cases where the defects are not merely jurisdictional strictly so called but others more or less neighbours to such deficiencies. Any circumstance, legal or factual, which inhibits entertainment or consideration by the court of the dispute on the merits comes within the scope of the section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right. 15. The issue as to the legality and reasonability of the rates charged by the Railway Administration having been finally adjudicated upon by this Court, there is nothing wrong in the respondent West Coast Paper Mills Limited having proceeded on an assumption that what had remained to be done was a simple direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eding must relate to the same matter in issue and; (5) Both the proceedings are in a court. 22. The policy of the section is to afford protection to a litigant against the bar of limitation when he institutes a proceeding which by reason of some technical defect cannot be decided on merits and is dismissed. While considering the provisions of Section 14 of the Limitation Act, proper approach will have to be adopted and the provisions will have to be interpreted so as to advance the cause of justice rather than abort the proceedings. It will be well to bear in mind that an element of mistake is inherent in the invocation of Section 14. In fact, the section is intended to provide relief against the bar of limitation in cases of mistaken remedy or selection of a wrong forum. On reading Section 14 of the Act it becomes clear that the legislature has enacted the said section to exempt a certain period covered by a bona fide litigious activity. Upon the words used in the section, it is not possible to sustain the interpretation that the principle underlying the said section, namely, that the bar of limitation should not affect a person honestly doing his best to get his case tried o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said period deserves to be excluded from the period of limitation, under which Section 9 Application was to be field by the Appellant. As noted above, the Adjudicating Authority proceeded on the premises that date of debt due was 03.03.2014 and did not exclude the time during which the winding up petition was pending. In the affidavit it is stated by the Appellant that after excluding the time during which winding up petition was pending there was delay of only 79 days in filing Section 9 Application. The notice under Section 8 was also given by the Appellant. The Adjudicating Authority has also observed that no Application under Section 5 of the Limitation Act has been filed for condonation of delay. The learned Counsel for the Appellant has relied on the judgment of the Hon'ble Supreme Court in (2021) 7 SCC 313 - Sesh Nath Singh and Anr. vs. Baidyabati Sheoraphuli Co-operative Bank Limited and Anr. Before the Hon'ble Supreme Court, one of the question, which was noticed for consideration was as to whether delay in filing Application under Section 7 can be condoned in absence of Application under Section 5 of the Limitation Act. In paragraph 55, two issues, which came up for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiring the appellant or the applicant, as the case may be, to make an application for condonation of delay. However, the court can always insist that an application or an affidavit showing cause for the delay be filed. No applicant or appellant can claim condonation of delay under Section 5 of the Limitation Act as of right, without making an application." In the above judgment, it was further laid down that Section 5 and Section 14 are not mutually exclusive. 22. It is also relevant to notice that the High Court while dismissing the winding up petition on 13.03.2019 granted liberty to the petitioners (Appellant herein) to take steps as per law against the actual entity. It was in exercise of the said liberty that subsequent Section 9 Application has been filed by the Appellant. Thus, while considering the exercise of discretion for condonation of delay under Section 5, the above facts also have to be taken into consideration, under which liberty was granted to the Appellant to proceed against the real entity, that is, Times Internet Ltd. The affidavit dated 28.01.2022 filed in this Appeal makes out sufficient cause for condonation of 79 days' delay in filing Section 9 Applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
