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TMI Blog2024 (7) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... was heard today in the presence of the Counsels for both the parties, in consonance to the provisions contained under Section 419 (j) to be read with Section 424 of the Companies Act of 2013. 4. The Company Appeal (AT) (CH) (INS) No. 53 / 2024, State Bank of India V. India Power Corporation Limited, it came up for consideration, before the Two Member Bench of this Tribunal, testing the judicial propriety of the Impugned Order dated 30.10.2023, as it was rendered in CP (IB) No.205/7/ HDB/2021 by the National Company Law Tribunal, Hyderabad Bench, whereby, the proceedings were held under Section 7 of the I & B Code, to be read with Rule 4 of Insolvency and Bankruptcy (Application to the Adjudicating Authority Rules) 2016, which is to be read with Section 60 (2) of the I & B Code, 2016, was decided by the Learned Adjudicating Authority, consequently, the Application as preferred under Section 7 of the Code was rejected, thereby denying the initiation of CIRP proceedings, as against the Corporate Debtor. 5. The Company Appeal, accompanied with it a Condone Delay Application being IA No. 158 / 2024, whereby, the Appellant by invoking the provisions contained under Section 61 of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd "Certified Copy", has been defined under NCLT Rules, 2016", which reads as under: Section 2 (9) "certified" means in relation to a copy of a document as hereunder;- (a) certified as provided in section 76 of the Indian Evidence Act, 1872; or (b) certified as provided in section 6 of Information Technology Act, 2000;" 10. The Statute quite in its express terms, when it was conferring the Rule making power under Section 469 of the Companies Act, it had prescribed, that the Certified Copy would be the one as certified and provided under Section 76 of the Indian Evidence Act. 11. If Section 76 of the Indian Evidence Act, which deals with the aspect and defines "Certified Copy" of the Public Document, it is to be read in consonance to the Certified Copy as provided under Rule 22 (2) of the NCLAT Rules, 2016, which obviously mean that it should be a copy provided on "demand" on a "payment of legal fee" thereof, meaning thereby the two elements which are necessarily required to be satisfied to make a Public Document a "Certified Copy" is, that there has to be a "demand!" and there has to be a "Requisite Fee" paid for getting the "Certified Copy!". 12. Once, the NCLAT Rules fra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made to Para 31 & 32 of the said Judgment, which is extracted hereunder: "31. The import of Section 12 of the Limitation Act and its explanation is to assign the responsibility of applying for a certified copy of the order on a party. A person wishing to file an appeal is expected to file an application for a certified copy before the expiry of the limitation period, upon which the "time requisite" for obtaining a copy is to be excluded. However, the time taken by the court to prepare the decree or order before an application for a copy is made cannot be excluded. If no application for a certified copy has been made, no exclusion can ensue. In fact, the explanation to the provision is a clear indicator of the legal position that the time which is taken by the court to prepare the decree or order cannot be excluded before the application to obtain a copy is made. It cannot be said that the right to receive a free copy under Section 420(3) of the Companies Act obviated the obligation on the appellant to seek a certified copy through an application. The appellant has urged that Rule 14 "14. Power to exempt.- The Appellate Tribunal may on sufficient cause being shown, exempt the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that limitation commenced once the order was pronounced and the time taken by the Court to provide the appellant with a certified copy would have been excluded, as clarified in Section 12(2) of the Limitation Act, if the appellant had applied for a certified copy within the prescribed period of limitation under Section 61(2) of the IBC. The construction of the law does not import the absurdity the appellant alleges of an impossible act of filing an appeal against an order which was uploaded on 12-3-2020. However, the mandate of the law is to impose an obligation on the appellant to apply for a certified copy once the order was pronounced by the NCLT on 31-12-2019 Cethar Ltd. (Resolution Professional) v. SKS Ispat & Power Ltd. MA No. 906/IB/2019 in CA No. 38 / IB / 2018, order dated 31-12-2019 (NCLT), by virtue of Section 61(2) IBC read with Rule 22(2) of the NCLAT Rules. In the event the appellant was correct in his assertion that a correct copy of the order was not available until 20-3-2020, the appellant would not have received a certified copy in spite of the application till such date and accordingly received the benefit of the suo motu order Cognizance for Extension of Limitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted hereunder: "32. A mere running of the 'eye over the rule 50 of the National Company Law Tribunal Rules, 2016 clearly points out that the 'Application' of the 'Petitioner/Appellant' to comply with a certified copy by paying the 'schedule of fees' 'cannot be dispensed with' and at best, the sending of the 'certified copy' of 'final order' by the authorities concerned, 'Free of Cost', is an obligation caused upon the 'Office of the Registry' of the 'National Company Law Tribunal', as per National Company Law Tribunal Rules. Moreover, that the receipt of 'free of cost copy', the 'Petitioner/Appellant', by receiving the same, and after recovering from illness, cannot be a substitute for a 'Certified Copy' of the 'Impugned Order', to accompany the 'Appeal' as per Rule 22(2) of the National Company Law Appellate Tribunal Rules, 2016. 33. To put it precisely and succinctly, the "Rule 50 of the National Company Law Tribunal Rules, 2016", is to be read in conjunction with definition of Rule 2(9) of the National Company Law Tribunal Rules, 2016. To put it differently, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would mandate a condition which is mandatory that there has to be a "demand" and a "remittance of fee" simultaneously. Para 53 and 54 are extracted hereunder:- "53. The Learned Counsel for the Petitioner / Appellant / Bank, adverts to Entry 31 of the Schedule of Fees, in NCLT Rules, 2016, which provides `Fees', for obtaining, `Certified True Copy of Final Order', passed to `Parties', other than the `concerned Parties' under Rule 50'. 54. The stand of the Petitioner / Appellant / Bank, is that the NCLT Rules, 2016, do not provide for `any payment of fees, for obtaining, a `Certified Copy' of the `Impugned Order', by a Party, which is a Party, to the Legal Proceedings, out of which, the Order arises'. " 25. Ultimately, the Learned Member of the Bench opined that the `Free Copy' under Rule 50 of NCLT Rules, cannot be read as to be a "Certified Copy" to enable an Appeal sustainable in violation of the terms of Rule 22 (2) of NCLAT Rules, and thus observed that the Free Copy is not a substitute to a Certified Copy which has to be obtained on demand and on payment of Requisite Fee. 26. Consequently, owing to the aforesaid fact and also as apparent from records, in the said Appeal t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... py given Free of Cost under Rule 50 of the NCLT Rules, 2016, has to be read at par with the Certified Copy to be obtained on demand under Section 76 of the Indian Evidence Act, for the purposes of Rule 22 (2) of the NCLAT Rules, 2016. 31. He had rightly taken a view that so far the downloaded Free of Cost Copy from the Website would not be treated as a Certified Copy on the basis of the observations made in Para 31 of V. Nagarajan's Judgment (supra). 32. But, so far, while answering, the Question No. 3C, as to whether the Application for obtaining the Certified Copy is mandatory or not, the Learned Member (Technical) has opined, while carving out a dichotomy to the Section 76 of Evidence Act, by extracting the implications of the words extracted hereunder: "Section 76... Certified copy of Public Documents.- Every Public officer having the custody of a public document, which any person has a right to inspect, shall give that person on demand a copy of it on payment of the legal fees therefor, together with a certificate written, at the foot of such copy that it is a true copy of such document or part thereof, as the case may be, and such certificate shall be dated and subscrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Comp. App (AT) (CH) INS. No. 29 / 2024 M/s. Whitehand Services v. M/s. RD Buildtech & Developers Karnataka Pvt. Ltd. and while referring to the Judgment of Munagala Roja Harsha Vardhini, this Tribunal, has reiterated its opinion and the principles on the basis of the observation made in Para 32, 33 and 34 of the said Judgment of Munagala Roja Harsha Vardhini and decided the matter with regards to the same aspect pertaining to the necessity of filing of a Certified Copy of the Judgment, in order to sustain an Appeal, under Section 61 of the I & B Code, 2016. 37. It is relevant to mention that in this Judgment of M/s. Whitehand Services v. M/s. RD Buildtech & Developers Karnataka Pvt. Ltd. too, the referring Member (Technical) was a Member Signatory to the Judgment, thereby accepting the principles which had been laid down by the Three Members Bench Judgment of Munagala Roja Harsha Vardhini. 38. The question which was referred to be answered is extracted hereunder: "In view of the divergent Order(s), delivered by the Hon'ble Member Justice M. Venugopal, Member (Judicial) and Hon'ble Mr. Jatindranath Swain, Member (Technical) of NCLAT, Chennai Bench, on 01.05.2024, the `O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a superior Court, the ideal condition would be that the entire Court should sit in all cases to decide questions of law, and for that reason the Supreme Court of the United States does so. But having regard to the volume of work demanding the attention of the Court, it has been found necessary in India as a general rule of practice and convenience that the Court should sit in Divisions, each Division being constituted of Judges whose number may be determined by the exigencies of judicial need, by the nature of the case including any statutory mandate relative thereto, and by such other consideration which the Chief Justice, in whom such authority devolves by convention, may find most appropriate. It is in order to guard against the possibility of inconsistent decisions on points of law by different Division Benches that the rule has been evolved, in order to promote consistency and certainty in the development of the law and its contemporary status, that the statement of the law by a Division Bench is considered binding on a Division Bench of the same or lesser number of Judges. This principle has been followed in India by several generations of Judges. We may refer to a few of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (supra). In that case, a Bench of 2 learned Judges doubted the correctness of the decision of a Bench of 3 learned Judges, hence, directly referred the matter to a Bench of 5 learned Judges for reconsideration. In such a situation, the 5 Judge Bench held that judicial discipline and propriety demanded that a Bench of 2 learned Judges should follow the decision of a Bench of 3 learned Judges. On this basis, the 5-Judge Bench found fault with the reference made by the 2-Judge Bench based on the doctrine of binding precedent. 22. A careful perusal of the above judgments shows that this Court took note of the hierarchical character of the judicial system in India. It also held that it is of paramount importance that the law declared by this Court should be certain, clear and consistent. As stated in the above judgments, it is of common knowledge that most of the decisions of this Court are of significance not merely because they constitute an adjudication on the rights of the parties and resolve the disputes between them but also because in doing so, they embody a declaration of law operating as a binding principle in future cases. The doctrine of binding precedent is of utmost im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is set aside by a Larger Bench or Superior Court. It intended to lay down that there has to be a harmonious construction while interpreting a Judgment and it should not be read in a manner in which, it would defeat the obvious intention of the Judgment in itself by misinterpreting the decisis principles. 42. The wider principle which the Hon'ble Apex Court has observed that, when a ratio or a question of Law, has already been settled in a prior Judgment by a Larger Bench, that will prevail and it ought not to be disturbed or referred to by a Bench of a smaller strength, till the Judgment of the larger strength is prevailing. Similar is the situation prevailing in the instant reference. 43. In the aforesaid Judgment of Chandra Prakash Supra, the Constitution Bench of the Hon'ble Apex Court has observed that the `Doctrine of binding precedent', are no more in doubt and it provides for that a Judgment, rendered by a larger Members of the Bench, either prior or subsequent to a reference for deciding an issue will have a binding effect on another Bench of the same strength or another Bench of a smaller strength. 44. The precaution taken therein by the Constitution Bench in the Judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-consideration of facts, may often lead to a difficult situation where a Judgment though in the words of a legislative enactment, may have a different effect, owing to the different facts involved in the case. 48. This Judgment relied by the Learned Counsel for the Appellant in support of his contention, was an effort made in order to answer the Judgment of Chandra Prakash Supra, as argued by the Learned Counsel for the Respondent, the answer could be extended Qua the question raised by the Learned Counsel for the Appellant in the light of the Judgment of Padma Sundara Rao, because, in the matters of Munagala Roja Harsha Vardhini, in fact, after Para 12 onwards, it was basically confined to a legal principle, about the sustainability of an Appeal, under Section 61 of the I & B Code, 2016, in the light of the provisions contained, under Rule 22 (2) of the NCLAT Rules, 2016, and the issue of necessity of supplying the Certified Copy of the Judgment. In fact, the Judgment of Munagala Roja Harsha Vardhini, was exclusively dealing with the question of Law, in the light of the Hon'ble Apex Court Judgment of V. Nagarajan, hence, Para 9 of the Judgment of Padma Sundara Rao (Supra), wi ..... 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