9911796707
TMI Blog2024 (8) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... due to defect of jurisdiction or other cause of like nature . It has been held that all the ingredients as noted in the judgment of the Hon ble Supreme Court need to be fulfilled. The judgment in State Bank of India vs. Visa Steel Ltd. [ 2021 (3) TMI 631 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] clearly hold that while computing the period of limitation under Section 61, sub-section (2), time spent in prosecuting the legal remedy need to be excluded. There cannot be any quarrel to the above preposition laid down in the above case. Whereas, the question in the present case is as to whether condition precedent required for applicability of Section 14, are fulfilled in the facts of the case or not? - The above judgment clearly hold that while computing the period of limitation under Section 61, sub-section (2), time spent in prosecuting the legal remedy need to be excluded. Thus, no case has been made out to extend the benefit of Section 14 of the Limitation Act for excluding the period from 08.06.2023 to 03.01.2024. The Appeal having been filed with the delay of 209 days, and the delay being beyond the condonable period of 15 days, IA No.2256 of 2024 field for condonati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2024 under Section 14 of the Limitation Act, 1963. 2. We have heard Shri Abhishek Anand, learned Counsel appearing for the Appellant and Shri Anirban Bhattacharya, learned Counsel appearing for the Respondent. 3. The submission of the learned Counsel for the Appellant is that the Appellant has been bonafide prosecuting the Application IA No.3216/2023 for recall of the order dated 07.06.2023 before the Adjudicating Authority under Rule 11 read with Rule 49 of the NCLT Rules, which was although rejected on 12.12.2023, against which order, an Appeal was filed in this Tribunal, which also came to be dismissed on 03.01.2024. Thus, the time from 08.06.2023 to 03.01.2024 be excluded for computing the limitation and by giving benefit of Section 14 of the Limitation Act. It is submitted that a litigant when bonafide is prosecuting another proceeding, in which he could not get a relief, the said period during which the Appellant has been bonafide prosecuting the proceeding, need to be excluded. 4. The submission of the Appellant has been refuted by learned Counsel for the Respondent, who submits that the Appellant is not entitled for any benefit under Section 14 of the Limitation Act for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 8. The Hon ble Supreme Court had occasion to consider the ingredients, which need to be fulfilled for applicability of Section 14 of the Limitation Act. The Hon ble Supreme Court in (2008) 7 SCC 169 Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department and Ors. had occasion to consider the provisions of Section 14 of the Limitation Act. It is useful to refer paragraphs 21 and 22 of the judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm opinion that the equity underlying Section 14 should be applied to its fullest extent and time taken diligently pursuing a remedy, in a wrong court, should be excluded. 9. From what has been stated in paragraph 21 of the judgment, one of the conditions, which need to be satisfied for pressing Section 14 into service is The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature . Thus, the question to be answered is as to whether earlier Application, which was filed by the Appellant being IA No.3216/2023 under Rule 11 read with Rule 49 of the NCLT Rules suffer from lack of defect of jurisdiction or other cause of like nature. The IA No.3216/2023 was filed praying for recall of order under Rule 49 of NCLT Rules. Rule 49 of NCLT Rules is as follows: 49. Ex-parte Hearing and disposal.- (1) Where on the date fixed for hearing the petition or application or on any other date to which such hearing may be adjourned, the applicant appears and the respondent does not appear when the petition or the application is called for hearing, the Tribunal may adjourn the hearing or hear and decide the petition or the application ex-parte. (2) Where a peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (AT) (Insolvency) No.37 of 2023. This Tribunal had occasion to consider the ingredients of Section 14 of the Limitation Act. It is useful to extract paragraph 18 of the judgment, where this Tribunal noted following: 18. One of the condition which required to be fulfilled for applicability of Section 14 is that the earlier proceeding failed from defect of jurisdiction or other cause of like nature . The provision further provides that earlier Court where the proceedings from defect of jurisdiction or other cause of like nature cannot be entertained. The expression used in Section 14 Sub-section (1) and (2) is is unable to entertain it . Thus, defect of jurisdiction and other cause of like nature should result in inability of the Court to entertain it. 13. This Tribunal after noticing the earlier judgment of the Hon ble Supreme Court, came to the conclusion that IA No.2623 of 2021 on the basis of which limitation of Section 14 was sought to be extended was decided on merits and it cannot be held that Court was unable to entertain the Application due to defect of jurisdiction or other cause of like nature. In paragraph 32 of the judgment, following was laid down: 32. We, thus, are sat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the genuineness of such transaction. Per contra, the learned Senior counsel for the respondent-plaintiff has submitted that lending of Rs.45,00,000/- as hand loan is substantiated by issuance of two postdated cheques in favour of the respondent by the appellant one for the sum of Rs.25,00,000/- and another for the sum of Rs.20,00,000/- . We are not inclined to go into the merits of the contention of the parties. All that is to be pointed out is that the appellant would have been well advised that if he had filed the first appeal simultaneously along with the application under Order IX Rule 13 CPC. The appellant has however shown his bona fide by depositing Rs.25,00,000/- in compliance with the orders of this Court dated 13.08.2018. The said amount of Rs.25,00,000/- was permitted to be withdrawn by the respondent-plaintiff. Considering the facts and circumstances of the case and in the interest of justice, in our view, the appellant deserves an opportunity to put forth his defence in the suit for recovery of money. But to avail this opportunity, he must deposit the balance amount of Rs.20,00,000/- as a condition precedent for condonation of delay. In these terms, the impugned jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Hon ble Supreme Court in M.P. Steel Corporation v. CCE4 (2015) 7 SCC 58. The learned Counsel for the Appellant has relied on relevant portion of paragraphs 10 and 49 of the judgment of the Hon ble Supreme Court in M.P. Steel Corporation, which are as follows: 10. We might also point out that Conditions 1 to 4 mentioned in the Consolidated Engg. case [(2008) 7 SCC 169] have, in fact, been met by the appellant. It is clear that both the prior and subsequent proceedings are civil proceedings prosecuted by the same party. The prior proceeding had been prosecuted with due diligence and in good faith, as has been explained in Consolidated Engg. [(2008) 7 SCC 169] itself. These phrases only mean that the party who invokes Section 14 should not be guilty of negligence, lapse or inaction. Further, there should be no pretended mistake intentionally made with a view to delaying the proceedings or harassing the opposite party . . 49. . the expression the time during which the plaintiff has been prosecuting with due diligence another civil proceeding needs to be construed in a manner which advances the object sought to be achieved, thereby advancing the cause of justice. 18. This Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and need not be confined to suits, appeals or applications which are made only in courts stricto sensu. This is made even more clear by the explicit language of Section 14 by which a civil proceeding can even be a revision which may be to a quasi-judicial tribunal under a particular statute. 24. Last judgment relied by learned counsel for the Appellant is Kalpraj Dharamshi (supra), in which case after order of the NCLT dated 28.11.2019, KIAL filed a Writ Petition before the Bombay High Court, which Writ Petition was dismissed 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 dow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter before the High Court was hotly contested and ultimately, the petition was dismissed by an elaborate judgment relegating KIAL to the alternate remedy available to it in law. As such, the conditions which enable a party to invoke the provisions of Section 14 of the Limitation Act are very much available to KIAL. If the period during which KIAL was bona fide prosecuting the writ petition before the High Court and that too with due diligence, is excluded applying the principles underlying Section 14 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. 19. As noticed above that after noticing the judgment of the Hon ble Supreme Court, this Tribunal in SREI Equipment Finance Limited concluded that IA was decided on merits and it cannot be said that the Court was unable to entertain the Application due to defect of jurisdiction or other cause of like nature. In paragraph 30 of the above judgment, following was held by this Tribunal: 30. The judgment dated 03.01.2023, thus, in resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g fulfilled, i.e., failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature . It has been held that all the ingredients as noted in the judgment of the Hon ble Supreme Court need to be fulfilled. 21. Another judgment relied by learned Counsel for the Appellant is the judgment of this Tribunal in State Bank of India vs. Visa Steel Ltd. in Company Appeal (AT) (Insolvency) No.294 of 2020, where reliance have been placed on paragraphs 29, 30, 31 and 35, which are as follows: 29. One cannot ignore a prime fact that the term sufficient cause implies no negligence, nor inaction nor want of bonafides on the part of the litigant. In fact, in excluding the time, the period starting from the institution of former proceeding till the end of the said proceeding, would be calculated. If a litigant was bonafide prosecuting his rights in a Court / Tribunal due to wrong advise, the limitation shall remain in limbo , which is the underlying Principle of Section 14 of the Limitation Act, 1963. 30. The essence of sufficient cause is whether it was an act of prudence or reasonable man on the part of person filing an Appeal . It is to be taken note of that whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il Appeal No.4633 of 2024, which was a case where the Hon ble Supreme Court again has reiterated that exclusion of time should be allowed when following conditions are satisfied: (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 and the latter proceeding must relate to the same matter in issue; and (5) Both the proceedings are in a court. 24. The above prepositions laid down by the Hon ble Supreme Court is reiteration of law laid down by the Hon ble Supreme Court in its various judgments. The present is a case where we have held that Condition No.3 as noted above, is not fulfilled in the facts of the present case, since failure of the earlier proceedings was not due to defect of jurisdiction or other cause of like nature. 25. In view of the foregoing discussions, we are satisfied that no case has been made out to extend the benefit of Section 14 of the Limitation Act for excluding the period from 08.06.2023 to 03.01.2024. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
