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TMI Blog2023 (4) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... n 13 uses expression suit or appeal - A plain reading of provisions of Section 14 indicate that Section 14 does not apply to appeal, however, the Hon ble Supreme Court had occasion to consider as to whether even if Section 14 of Limitation Act does not expressly apply to appeal, whether the principles underlying Section 14 are applicable to appeal or not. The Hon ble Supreme Court in MP. STEEL CORPORATION VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2015 (4) TMI 849 - SUPREME COURT ] has laid down that where Section 14 may not apply, the principles on which Section 14 is based, would nevertheless apply. - The law laid down by the Hon ble Supreme Court is that even if Section 14 of the Limitation Act does not apply in an appeal, however, the principles underlying Section 14 can be applied while considering exclusion of period under Section 14. Thus, we proceed to examine the contentions of the parties on the premise that principles underlying Section 14 are also attracted in an appeal filed under Section 61 of I B Code. When Section 61 provides that right to appeal to be exercised within a prescribed period of 30 days with power to condone the delay of only 15 days, the party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation Act. 2. Before we consider the respective submissions of learned counsel for the parties, brief facts giving rise to this Appeal and application for condonation of Appeal needs to be noted: i. A Memorandum of Understanding dated 28.06.2004 was executed between the Shree Ram Urban Infrastructure Ltd. (Corporate Debtor), Kalpataru Properties Pvt. (Respondent No.1 to this Appeal) and Vijay Infrastructure Technology Pvt. Ltd. (a sister concern of the Corporate Debtor) for sale of a plot of land measuring 20,955.40 sq. m. situated at Plot No. 5A of Lower Parel Division of District Mumbai City. ii. An Arbitral Award dated 29.08.2016 was passed directing the Corporate Debtor to specifically perform the Agreement i.e. for the sale, transfer, assignment and conveyance of the subject property to Kalpataru Properties , the Respondent No.1. iii. Respondent No.1 file Commercial Execution Application No. 134 of 2017 before the Hon ble Bombay High Court seeking execution of the Award as a decree for specific performance on 14.11.2017. iv. The Appellant, SREI Equipment , filed an application under Section 7 of the I B Code in the year 2019 against the Corporate Debtor be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btors account and the Resolution Professional will execute the sale deed on the said amount being so deposited. He submits on instructions that the amount will be deposited within 10 days. On the aforesaid statement taken on record, learned counsel for respondent no. 1 who is the appellant before the NCLAT submit that if the amount is brought in, the sale deed can be executed by the Resolution Professional and the appeal filed by the Respondent No. 1 before the NCLAT would stand withdrawn. In view of the aforesaid, we direct as under: 1) The amount be deposited within a period of 10 days stipulated, as aforesaid; 2) On the amount being deposited, the Company Appeal (AT) Ins. No. 880/2021 before the NCLAT, filed by Respondent No. 1 shall stand dismissed as withdrawn; 3) The Resolution Professional shall execute the sale deed in favour of the appellant within a period of 10 days of the deposit of the amount; 4) In view of the aforesaid agreement arrived at, no impediment should be created to the execution of the same. The Appeal stands disposed of in terms aforesaid. xii. In Company Appeal (AT) (Ins.) No. 880 of 2021, Appellant filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h presided over by the Chairman. In view thereof, the final picture which would emerge would be before the NCLAT and to that extent the order passed by us on 14.11.2022 would be kept in abeyance till the NCLAT resolves the issue. List on 07.02.2023. xiii. In pursuance of the order passed by the Hon ble Supreme Court dated 09.12.2022, the Company Appeal (AT) (Ins.) No. 880 of 2021 alongwith I.A. No. 2623 of 2021 was heard by this Tribunal and decided by judgment dated 03.01.2023. By judgment dated 03.01.2023, Company Appeal (AT) (Ins.) No. 880 of 2021 was dismissed as withdrawn and I.A. No. 2623 of 2021 was rejected. xiv. Against the judgment of this Tribunal dated 03.01.2023, the Appellant filed an Appeal before the Hon ble Supreme Court being Civil Appeal No. 385 of 2023, which Appeal was dismissed by order dated 27.01.2023 by the Hon ble Supreme Court. xv. This Appeal being Company Appeal (AT) (Ins.) No. 37 of 2023, as noted above, was filed in this Tribunal on 07.01.2023 alongwith I.A. No. 130 of 2023 praying for condonation of delay. 3. We have heard learned counsel for the parties on the application I.A. No. 130 of 2023 praying for condonation of delay. 4. Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021 was passed by the Adjudicating Authority allowing the application filed by the Respondent No.1 directing for execution of the sale deed by the Resolution Professional, which was well within knowledge of the Appellant. Appellant chose not to file an appeal against the said order in this Tribunal and only filed an Intervention Application, which Intervention Application came to be rejected by this Tribunal on 03.01.2023. It is submitted that the Appellant is not entitled for claiming any benefit under Section 14 of the Limitation Act. Ingredients of Section 14 of the Limitation Act are not attracted in the present case. The Appellant cannot be said to be prosecuting the I.A. bona fide or with due diligence. The Appellant, a Finance Company which has a large team of legal consultants, cannot be said to be unaware of difference between filing an appeal or filing an Intervention Application. Appellant having not chosen to file an appeal against the order earlier, it cannot be allowed to file an appeal after expiry of more than 400 days. The appeal is clearly barred by time and deserves to be dismissed. It is submitted that there was no defect of jurisdiction or other cause of like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature. Explanation. For the purposes of this section, (a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted; (b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding; (c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction. 13. When we look into the provisions of Section 14, it is clear that Subsection (1) deals with computing of period of limitation for any suit and Subsection (2) deals with computing the period of limitation for any application. The Limitation Act, 1963 in several sections has used the word suit , application and appeal . Section 12 which provides f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason, in most instances, it would seem that the apparent or suggested meaning of the statute, was not the one intended by the law- makers. In the absence of some other indication that the harsh or ridiculous effect was actually intended by the legislature, there is little reason to believe that it represents the legislative intent. 15. In the judgment of Hon ble Supreme Court which arose out of Insolvency and Bankruptcy Code, 2016 i.e. (2021) 10 SCC 401, Kalpraj Dharamshi Anr. vs. Kotak Investment Advisors Ltd. Anr. , Hon ble Supreme Court while considering the question of applicability of principles under Section 14 of the Limitation Act in an appeal filed under Section 61 of I B Code has held that principles underlying Section 14 are applicable in an appeal filed under Section 61. In the above case, after order of the Adjudicating Authority an Writ Petition was filed in the High Court which was being bonafidely prosecuted in good faith with due diligence. High Court has dismissed the Writ Petition on the ground that petitioner has an alternative and equally efficacious remedy available. Thereafter, an appeal was filed in this Tribunal. In the above background follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment in (2008) 7 SCC 169, Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department and others , in Para 59 has noted conditions which may be satisfied before Section 14 can be pressed into service, which is to the following effect: 59. The conditions that are required to be fulfilled for invoking the provisions of Section 14 of the Limitation Act have been succinctly spelt out in various judgments of this Court including the one in Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department and others, which read thus: 21. Section 14 of the Limitation Act deals with exclusion of time of proceeding bona fide in a court without jurisdiction. On analysis of the said section, it becomes evident that the following conditions must be satisfied before Section 14 can be pressed into service: (1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party; (2) The prior proceeding had been prosecuted with due diligence and in good faith; (3) The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature; (4) The earlier proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation II . Explanation III. For the purpose of this section misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction. The High Court having found that the present claim of the plaintiffs was also included in the previous suit the condition that the previous proceeding should be founded upon the same cause of action must be held to have been satisfied. The High Court has further held that the previous suit had been prosecuted in good faith and with due diligence. In order to attract the applicability of Section 14(1), therefore, all that has to be determined is whether the court in which the previous suit was filed was unable to entertain the claim relating to future mesne profits from defect of jurisdiction or other cause of a like nature . It is common ground and indeed cannot be argued nor has any attempt been made to urge such a contention before us that the court trying the previous suit was unable to entertain it from defect of jurisdiction. The only question for determination is whether the court was unable to entertain the previous suit from other cause of a like nature . In Jai Kis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a like nature must be construed liberally. Some clue is furnished with regard to the intention of the legislature by the Explanation III in Section 14(2). Before the enactment of the Act in 1908 there was a conflict amongst the High Courts on the question whether misjoinder and non-joinder were defects which were covered by the words or other cause of a like nature . It was to set at rest this conflict that Explanation III was added. An extended meaning was thus given to these words. Strictly speaking misjoinder or non- joinder of parties could hardly be regarded as a defect of jurisdiction or something similar or analogous to it. 21. Next judgment to be noticed is judgment of Hon ble Supreme Court in (1975) 4 SCC 628, Roshanlal Kuthalia and others vs. R. B. Mohan Singh Oberoi , where interpreting Section 14 of the Limitation Act the Hon ble Supreme Court held that any circumstances 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. In Para 27 of the judgment following has been laid down: 27. Certainly, Section 14 is wide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. It is true that the writ petition was not dismissed by the High Court on the ground of defect of jurisdiction. However, Section 14 of the Limitation Act is wide in its application, inasmuch 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 and Ors. 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 circumstances, legal or factual, which inhibits entertainment or consideration by the Court of the dispute on the merits conies 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 right. 23. Next judgment relied by learned counsel for the Appellant is judgment of Hon ble Supreme Court in M. P. Steel Corporation vs. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ismissed by the High Court on 28.01.2020 on the ground that KIAL had an alternate and efficacious remedy of filing an appeal before NCLAT. Thereafter, KIAL filed appeals before NCLAT on 18.02.2020. The Appeals were allowed by NCLAT vide its judgment dated 05.08.2020, which judgment was challenged before the Hon ble Supreme Court in the Civil Appeals, which were decided by the Hon ble Supreme Court. One of the arguments which was raised before the Hon ble Supreme Court was that appeal was barred by time, which argument was repelled holding that the KIAL was entitled to the benefit of principles underlying Section 14. In Para 65 and 78, the Hon ble Supreme Court laid down following: 65. In Consolidated Engineering Enterprises 31 , it has been observed, that 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 has been observed, that an element of mistake is inherent in the invocation of Section 14. The section, in fact, is intended to provide a relief against the bar of limitation in cases of mistake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the Limitation Act, the appeals filed before NCLAT would be very much within the limitation. We find, that KIAL would be entitled to exclusion of the period during which it was bona fide prosecuting the remedy before the High Court with due diligence. 25. From the law laid down by Hon ble Supreme Court, it is clear that principles underlying Section 14 can be claimed in appeal filed under Section 61 of I B Code also by the Appellant. 26. After noticing the law on the subject, we now come to the condition which is required to be fulfilled for extending the benefit of Section 14 i.e. whether the Court in earlier proceeding prosecuted was unable to entertain it for defect of jurisdiction or other cause of like nature. The key words are unable to entertain it . 27. We may first examine whether the I.A. No. 2623 of 2021, which was filed by the Appellant, was not entertained by this Tribunal while deciding the I.A. No. 2623 of 2021 by judgment dated 03.01.2023. 28. In the judgment dated 03.01.2023 of this Tribunal, there is detailed consideration of the I.A. No. 2623 of 2021 filed by the Appellant. The prayers made in I.A. No. 2623 of 2021 have been noted in para 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g effect: 38. In view of the fore-going discussions, we are of the considered opinion that at the instance of intervener, the order passed by the Adjudicating Authority dated 08.10.2021 cannot be set aside. We although have permitted the applicant to intervene in the Appeal but are unable to grant any relief to intervention as prayed in the Application. We are thus of the view that prayer of the appellant Indiabulls Housing Finance Ltd. to withdraw the Appeal is to be allowed and the Appeal is to be dismissed as withdrawn. 30. The judgment dated 03.01.2023, thus, in result, dismissed the Company Appeal (AT) (Ins.) No. 880 of 2021 as withdrawn and has rejected the I.A. No. 2623 of 2021. The rejection of the I.A. was after consideration on the merit of the I.A. and entitlement of the Intervenor in the I.A. which was filed. Thus, present is not a case where it can be said that in earlier proceeding the Court was unable to entertain the I.A. The I.A. No. 2623 of 2021 was entertained, heard on merits and rejected. It is further to be noted that the Appellate Tribunal which decided the I.A. No. 2623 of 2021 had no defect of jurisdiction nor its rejection was on other cause o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the same cause of action as that on which the later suit is founded and the Court in which the prior proceeding was prosecuted must have been unable to entertain it for the reasons specified, namely, defect of jurisdiction or other cause of a like nature. Now the words 'which, from defect of jurisdiction, or other cause of a like nature, is unable to entertain it' which occur in Section 14(1) of the Limitation Act are very significant. As pointed out by Mukherjee, J. (as he then was), in AIR 1945 Cal 381 (B), the word 'entertain' means to admit for consideration. It does not mean giving relief, and that when a suit or proceeding is not thrown out in limine but the Court receives it for consideration and disposal according to law, it must be regarded as entertaining the suit or proceeding, no matter whatever the ultimate decision may be; and that a suit is to be regarded as not entertained by the Court only if it is thrown out at its inception and the Court does not decide it on its merits. The learned Judge further observed that Section 14 of the Limitation Act speaks of the inability of the Court to entertain a suit or proceeding on certain specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not to file an appeal, comes after 400 days for filing an appeal cannot be said to be acting with due diligence. The Appellant is a Financial Creditor of the Corporate Debtor who is an entity backed by large number of advisors and consultants. The remedy of appeal and an intervention application in an appeal are entirely different. When Appellant chose not to file appeal challenging order dated 08.10.2021 and chose to file Intervention Application in an appeal filed by the another creditor it cannot be said that it was prosecuting the proceeding with due diligence. 34. By filing an Intervention Application, the Appellant could not have prayed for setting aside order dated 08.10.2021 it has already been held by this Tribunal in its judgment dated 03.01.2023, which also received approval of the Hon ble Supreme Court. It is relevant that the status of the Appellant in I.A. No. 2623 of 2021 has been held to be of Intervenor only, which was also noted by the Hon ble Supreme Court in its order dated 09.12.2021, as extracted above. 35. Learned counsel for the Respondent has also placed reliance on judgment of this Appellate Tribunal in I.A. No. 3349 of 2022 in Company Appeal (AT) (Ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that authority underlying Section 14 should be applied to its fullest extent and time taken diligently pursuing a remedy in a wrong Court should be excluded. Present is not a case where Applicant can claim that he had filed I.A. No. 145/2022 in a wrong Court. The IA was filed before the same Adjudicating Authority in the same proceeding being CP (IB) No. 107/ALD/2019 in which Impugned Order was passed. The applicability of principle of res judicata may be invoked on different stages of the same proceedings but we have not come across any authority/precedent where it has been held that in same proceeding with regard to the Orders passed in different I.As, principles of Section 14 of Limitation Act can be invoked. 20. We thus are of the view that Judgement of Kalpraj Dharamshi (supra) quoted above, the benefit of Section 14 was extended on account of writ petition in the Hon ble High Court, the said Judgment was on its own fact and the said Judgment does not help the Appellant in the present case. 21. We thus are satisfied that the Applicant is not entitled to claim benefit of Section 14 of the Limitation Act, 1963 on account of having filed an I.A. No. 145 of 202 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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