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TMI Blog2023 (6) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal. The Appellant in the Application prays for exclusion of the period from 26.12.2022 to 01.05.2023 during which the Appellant was prosecuting the Writ Petition No. CWP-30348-2022 before Punjab and Haryana High Court. 2. Notices were issued in the Delay Condonation Application to which Reply has also been filed by Respondent No.1 to which Rejoinder on behalf of Appellant has also been filed. 3. Brief background facts necessary to be noted for deciding this Application are:- a. The Appellant is member of the Suspended Board of Directors of Supreme Vasai Bhiwandi Tollways Pvt. Ltd.-Corporate Debtor. An Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "The Code") being CP (IB) No. 442/CHD/HRY/2019 was filed by the Respondent No. 1 against the Corporate Debtor before National Company Law Tribunal, Chandigarh Bench, Chandigarh (hereinafter referred to as "The Adjudicating Authority"). b. The Section 7 Application was admitted by the Adjudicating Authority vide its order dated 22nd December, 2022. Against which Order dated 22nd December, 2022, the Appellant filed a Writ Petition No. CWP-30348-2022 before the High Court of Pun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... protection by order granted by the High Court to continue till the next date. In pursuance of the Notice, Reply was filed by Respondent No. 1 to which time for Rejoinder was taken by the Appellant on 31st May, 2023. 5. We have heard Mr. Abhijeet Sinha, Learned Counsel for the Appellant, Mr. Krishnendu Dutta, Learned Sr. Counsel for the Respondent No. 1 and Mr. Chandan Kumar, Learned Counsel for the IRP. 6. The Only question which has arisen for consideration in this Appeal is as to whether the Applicant is entitled for the benefit of Section 14 of the Limitation Act for purposes of the limitation for filing this Appeal under Section 61 of the Code? 7. The Law is well settled that even though Section 14 of the Limitation Act is not strictly applicable in the Appeal filed under Section 61 of the Code but the principles underlying Section 14 are clearly attracted. 8. The Hon'ble Supreme Court in (2021) 10 SCC 401, Kalpraj Dharamshi & Anr. vs Kotak Investment Advisors Ltd. & Anr. which was a case where the question of applicability of Section 14 of the Limitation Act in an Appeal filed under Section 61 of the Code came for consideration held in the said Judgment that principles un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncompetent. Mr. Krishnendu Dutta, Learned Sr. Counsel opposing Section 5 Application of the Limitation Act further contends that benefit of Section 14 is not available to the Appellant since the earlier proceeding that is writ proceeding has not been prosecuted in good faith and due diligence. The benefit under Section 14 of the Limitation Act can be claimed only when the earlier proceeding was being prosecuted in good faith in a court suffering from defect of jurisdiction or other cause of like nature and is unable to entertain. It is submitted that writ proceedings in the Hon'ble High Court under Article 226 and 227 of the Constitution of India can not be held to be proceeding suffering from any defect of jurisdiction. It is submitted that writ proceeding which was filed on the basis that there is no vacation bench available in the NCLAT, it was incumbent on the Appellant to withdraw the writ petition since the NCLAT reopened from 2nd January, 2023. The Appellant even after 2nd January, 2023 did not withdraw the Appeal and contested the Application filed by the Respondent No. 1 by prosecuting the writ petition which indicate that writ proceedings were not prosecuted in bona fide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in paragraph 49.1 is that whether the Appeals filed by KIAL before NCLAT were within limitation. In the above reference, Hon'ble Supreme Court had considered the several earlier judgments on Section 14 of the Limitation Act. Hon'ble Supreme Court in paragraph 64 observed that the provisions contained in Section 5 and 14 are meant for grant of relief, where a person has committed some mistake. In paragraph 64 also it was held that even though section 14 is not per se applicable, the same would not mean that principles akin thereto would not be applicable. In paragraph 64 and 65 of the Judgment, following has been observed: "64. Thus, this Court relying on the earlier judgments in the cases of Bhudan Singh and another vs. Nabi Bux and another, J. Kumaradasan Nair and another vs. Iric Sohan and others, and Consolidated Engineering Enterprises observed, that the object of enacting the legislation is to advance public welfare. The entire legislative process is influenced by considerations of justice and reason. Justice and reason constitute the great general legislative intent in every piece of legislation. It has been held by this Court, that in the absence of some other indicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the present case, immediately after NCLT pronounced its judgment on 28.11.2019 and even before the certified copy was made available on 18.12.2019, KIAL had filed writ petition before the Division Bench of the Bombay High Court on 11.12.2019 on the principal ground, that the procedure followed by NCLT was in breach of principles of natural justice. Such a ground could be legitimately pursued before a writ court. In that sense, it was not a proceeding before a wrong court, as such. Perusal of the judgment and order dated 28.1.2020, passed by the Division Bench of the Bombay High Court, which dismissed the writ petition on the ground of availability of alternate and equally efficacious remedy would reveal, that the said writ petition was hotly contested between the parties and by an order running into 32 pages, the Division Bench of the Bombay High Court dismissed the petition relegating the petitioner therein (i.e. KIAL) to avail of an alternate remedy available in law." 15. Hon'ble Supreme Court in Kalpraj Dharamshi after noticing the pleadings and writ petition filed by KIAL has taken view that although it had alternative remedy for filing the Appeal but since the issues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed under Section 61 of the Code before this Appellate Tribunal. 18. Mr. Krishnendu Dutta, Learned Sr. Counsel for the Respondent has emphasised that writ petition filed by the Appellant cannot be treated to be bona fide proceeding since the Appellant could have withdrawn the Writ Petition after 2nd January, 2023 and approach this Tribunal. 19. A copy of the writ petition which was filed before the Hon'ble High Court of Punjab and Haryana has been brought on record by which Appellant in Volume 4 of the Appeal in the writ petition has pleaded following in paragraph 12 to 14: 12. That since the National Company Law Appellate Tribunal, New Delhi Bench is not functional and is not hearing any matters till 01.01.2023, it is impossible for Petitioner's appeal and stay application to be heard by the Appellate Tribunal when filed. The Petitioner is thus deprived of its statutory remedy of appeal from the Impugned Order before National Company Law Appellate Tribunal, New Delhi Bench. Petitioner is thus effectively left remediless in a situation where now that the steps in furtherance of the Impugned Order can be taken any time by the Interim Resolution Professional. 13. This H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2023 has granted liberty to the Appellant to avail statutory remedy before the Appellate Tribunal. The Hon'ble High Court thus having granted liberty to file the Appeal, we are not persuaded to accept the submission of Learned Sr. Counsel for the Respondent that Proceedings in the Writ Petition were not prosecuted in good faith. 22. Now next submission which has been passed by Learned Sr. Counsel for the Respondent is that the Writ Petition can not be said to be suffering from defect of jurisdiction or other cause of like nature. Cause of like nature has been considered by the Hon'ble Supreme Court in several cases. Learned Counsel for the Respondent has referred to 1977 1 SCC 791 Gurdit Singh & Ors. Vs. Munsha Singh & Ors. where Hon'ble Supreme Court adverted to the expression "or other cause of a like nature". In paragraph 18 of the Judgement, following has been held: "18. Now the words "or other cause of a like nature" which follows the words "defect of jurisdiction" in the abovequoted provisions are very important. Their scope has to be determined according to the rule of ejusdem generis. According to that rule, they make their colour from the preceding words "defect of juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature" so as to bring within its ambit cases where the Hon'ble High Court exercising its jurisdiction under article 226 of the Constitution rejects a petition in the exercise of its discretion on the ground that the applicant has an alternative remedy by way of suit. 25. The said recommendation of the Law Commission were given in the year 1956, despite the above recommendation of Law Commission given in 1956, Hon'ble Supreme Court had occasion to consider several cases where benefit of Section 14 of the Limitation Act was claimed on the ground of prosecuting a proceeding before the Hon'ble High Court under Article 226. Some of the cases have been noticed in the Judgement of Kalpraj Dharamshi with regard to proceeding under Article 226. Kalpraj Dharamshi itself was a case where benefit of Section 14 of the Limitation Act was claimed on the ground that proceedings under Article 226 were being prosecuted in the Hon'ble Bombay High Court which benefit was extended by the Hon'ble Supreme Court and which benefit as per Judgment of Hon'ble Supreme was clearly admissible to any Appeal under Section 61 of the Code. The Judgment of the Hon'ble Supreme Court in Kalpraj Dharmashi being judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vious 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 Kishan Singh v. The Peoples Bank of Northern India it was pointed out that Section 14 of the Act will have no application where failure on the part of the petitioner or the plaintiff to get the reliefs which he asked for was not attributable to anything connected either with the jurisdiction of the court or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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." 28. Same principles were again reiterated by Hon'ble Supreme Court in "(2004) 3 SCC 458, Union of India & Ors. vs. West Coast Paper Mills Ltd. & Anr. (III)", where in Para 14 following has been laid down: "14. In the submission of Mr. Malhotra, placing reliance on The Commissioner of Sales Tax, U.P., Lucknow v. M/s Parson Tools and Plants, Kanpur, [(1975) 4 SCC 22], to attract the applicability of Section 14 of the Limitation Act the following requirements must be specified. "6. (1) both the prior and subsequent proceedings are civil proceedings prosecuted by the same party: (2) the prior proceedings had been prosecuted with due diligence and in good faith: (3) the failure of the prior proceedings was due to a defect of jurisdiction or other case of a like nature; (4) both the proceedings are proceeding in a Court." In the submission of the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Satishkumar Tiwari who has filed the Affidavit in support of Application under Section 5 as well as Rejoinder Affidavit. Shri Satishkumar Tiwari claims himself to be power of attorney of the Appeal and annexed the copy of the power of attorney dated 01st August, 2022 as Annexure-1 to the Rejoinder. Learned Sr. Counsel for the Respondent submits that said power of attorney was executed on stamp duty which is claimed purchased on 16th November, 2021 and power of attorney can not be validly executed. The fact of the matter is that power of attorney was executed on 01st August, 2022 which has been brought on record and we for the purposes of prosecuting this Appeal, are not persuaded to accept the submission of the Respondent that since power of attorney was executed on stamp paper which was purchased earlier we should reject the Appeal and Application on this ground. Power of attorney has been executed by the Appellant with regard to the Corporate Debtor in question, we are not persuaded with the objection of the Respondent to reject the Delay Condonation Application on this ground. 32. In view of the foregoing discussions and conclusion, we are of the view that Appellant is en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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