9911796707
TMI Blog2024 (12) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings of admission into the CIRP, under Section 9, which was made as the subject matter of the Company Appeal (AT) (CH) (Ins) No.193/2022. For the reasons best known, the appeal CA (AT) (CH) (Ins) No.193/2022, was chosen to be addressed upon at a later stage for the reason being that, the consequential effect would be that since the appeal itself was preferred with 45 days of delay, may be that the exclusion which has been sought by the Appellant for a period from 15.03.2022 to 28.04.2022 of 44 days will not be a period, which will be falling within the exemption clause to the proviso, which is strict in its applicability and upon failure to succeed in pressing upon the Condone Delay Application, it would have a direct bearing on the Company Appeal (AT) (CH) (Ins) No.192/2022. Hence, the aspect of exclusion, which has been sought to be argued by the Ld. Counsel for the Applicant, since would be a variable factor in each of the cases depending upon the fact involved therein, cannot be universally made applicable as a concept for the purposes of dealing with an aspect of limitation, when the law itself very strictly creates a restriction on the Appellate Tribunal that while determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, in a manner as if a right which are given to an Applicant to withdraw an application under Regulation 30A to be read with Section 60 could be chiselled in a manner to impose upon an Applicant by forcing upon him by soliciting a judicial direction to withdraw his own proceedings over which he has a right to pursue and continue in the light of the mandate of Article 14 to be read with Article 21 of the Constitution of India, as there cannot be a deprivation of right to judicial remedies to the citizen of this country of ours, by a judicial adjudication, where a deprivation is being attempted to be forced upon him by calling upon a party by a judicial order for not to pursue a proceeding in which he otherwise intends to continue, being the master of the proceedings drawn by him.
Appeal dismissed.
Conclusion - i) Section 14 of the Limitation Act does not apply to intra-court applications within the same proceeding, as it is intended for proceedings in courts lacking jurisdiction. ii) The decision to withdraw CIRP proceedings under Section 12A lies with the Applicant, and judicial directions cannot compel such withdrawal. X X X X Extracts X X X X X X X X Extracts X X X X ..... connected appeal. When we ventured upon, which has been taken as to be a foundation for the purposes of grant of, a Condone Delay Application it had been owing to the fact of the pendency of IA No. 30/2022. Accordingly, under that pretext, the Appellant in the Condone Delay Application IA No. 441/2022, had submitted that since the IA No. 30/2022, was instituted on 15.03.2022 before the Ld. Adjudicating Authority and it had consumed sufficient time and remainded pending till it was adjudicated upon by the order of 28.04.2022 (impugned order is other company appeal). The aforesaid period that is from 15.03.2022 till 28.04.2022 deserves to be excluded and condoned, by drawing its implication from Section 14 of the Limitation Act. The question which emerges and requires consideration by this Appellate Tribunal is, as to whether under the given factual set of circumstances, the provisions of Section 14 of the Limitation Act, could at all be made applicable to grant the benefit of limitation to the Appellant, during the pendency of the proceedings by way of IA No. 30/2022, as preferred in the CP (IB) No. 71/9/AMR/2020. Preference of IA No. 30/2022 was the exclusive prerogative and cho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." The legislature, while incorporating Section 14 under the Limitation Act of 1963, it made it quite clear in its term, that it provides an exclusion of time period, only where a person prosecutes a case against a cause of action in good faith before a wrong court, which has no jurisdiction. Cause of action herein would refer to, the principal proceedings at the stage of inception of proceeding, where a person approaches to a court which is not competent or having jurisdiction to decide the matter, and then, when after its decision, he is relegated back to an appropriate forum i.e to a court to decide the matter as prescribed for him under law. Section 14 of the Limitation Act, canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be of no avail as far as this Appellant is concerned. There is yet another logic, as to why the argument extended by the Ld. Senior Counsel for the Appellant in the context of the provisions of Section 14 of Limitation Act, will not be applicable, the reason being that, under the I & B Code 2016, the Limitation Act has been made applicable by virtue of an insertion made by Act No. 26/2018. If the provisions contained under Section 238A, itself are taken into consideration, it is a provision which is general in its applicability and would be in an exception to a provision of law which is a self-contained provision that, includes within itself the embargos of limitation. The application of the provisions contained under Section 238A of the I & B Code 2016, cannot be borrowed to be applied for the purposes to dilute or nullify the impact of the restrictions of limitation which is mandated under Section 61, which has to be strictly adhered to, by a party who is aggrieved by an order of the Ld. Adjudicating Authority and who intends to prefer an appeal under Section 61. In other words, it could be said that the provisions of the Limitation Act as contemplated to be applied by Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, 97 and 100, which though are not relevant, but they are still extracted for his satisfaction because he has placed reliance on the same. Para 49, 50, 56, 57, 97, and 100 are extracted hereunder: - "49. In view of the rival submissions, following questions arise for our consideration. 49.1. (i) Whether the appeals filed by KIAL before Nclat were within limitation? 49.2. (ii) Whether there was waiver and acquiescence by KIAL, so as to stop it from challenging the participation of Kalpraj? 49.3. (iii) Whether Nclat was right in law in interfering with the decision of CoC of accepting the resolution plan of Kalpraj?" "(i) Whether the appeals filed by KIAL before Nclat were within limitation? 50. For appreciating the rival contentions in this regard, it would be appropriate to refer to Section 29(2) of the Limitation Act, so also the provisions of Section 61 and Section 238-A of the I&B Code." "56. On the contrary, it is urged on behalf of KIAL, that since the order passed by NCLT was passed in utter breach of the principles of natural justice, it had bona fide filed a writ petition before the Division Bench of the Bombay High Court. It is urged, that by an elaborate or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterpretation is given to the law of limitation where, any party to the proceedings who is facing a hurdle of limitation could invariable file an interlocutory application and keep it pending for years together and thereafter take a plea, that he was not instrumental in the pendency of the interlocutory application, as such Section 14 of the Limitation Act, will come into play. To the argument extended by the Ld. Senior Counsel for the Applicant, the appellant cannot be permitted to take advantage of his own non sustainable proceedings, which have been drawn and pursued for a certain time period for the purposes of exclusion, which is not to be considered as to be a reason to extend limitation, prescribed under Section 61 (2). Apart from that if the aforesaid paragraph, which has been extracted and relied by, the Ld. Senior Counsel for the Appellant thus will have no applicability, because the implication of Section 14 given therein in the matters of the Kalpraj Dharamshi (Supra), which is based under altogether a different circumstances and facts, and particularly the logic, which has been assigned for the purposes of attracting Section 14 of the Limitation Act, even to the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended beyond period provided under Section 61(2) of I & B Code. We would not hesitate to appreciate the intelligentsia of the Ld. Senior Counsel for the Appellant who has pursued the appeal, while pressing upon the Condone Delay Application. There was a conscious intent that the Ld. Senior Counsel for the Appellant has chosen to address upon Company Appeal (AT) (CH) (Ins) No.192/2022, which is against the Impugned order that was decided on 28.04.2022, which was arising from the interlocutory application proceedings of the same company petition and the principle proceedings of admission into the CIRP, under Section 9, which was made as the subject matter of the Company Appeal (AT) (CH) (Ins) No.193/2022. For the reasons best known, the appeal CA (AT) (CH) (Ins) No.193/2022, was chosen to be addressed upon at a later stage for the reason being that, the consequential effect would be that since the appeal itself was preferred with 45 days of delay, may be that the exclusion which has been sought by the Appellant for a period from 15.03.2022 to 28.04.2022 of 44 days will not be a period, which will be falling within the exemption clause to the proviso, which is strict in its appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given an overriding effect to the other law and once it contains a self-contained provision, governing the field of the limitation it has to be determined, on the basis of the strict mandate of the statute provided under Section 61 (2) and at the most it could be extendable upto the upper limit under the proviso to Section 61 (2) of I & B Code. Hence, the Condone Delay Application which has been sought for, is 45 days, which is outside the ambit of the provisions contained under Section 61(2), cannot be allowed. The Condone Delay Application IA No. 441/2022, would stand 'rejected' and as a consequence thereto the Company Appeal (AT) (CH) (Ins) No.193/2022, would too stand 'dismissed'. Company Appeal (AT) (CH) (Ins) No.192/2022: We now proceed to deal with, the accompanying Company Appeal (AT) (CH) (Ins) No.192/2022, as preferred by the Appellant, by putting a challenge to the Impugned order of 28.04.2022, as it has been rendered in IA No. 30/2022 filed by the appellant in CP (IB) No. 71/9/AMR/2020. Though, much answer would not be required owing for the reasons as already recorded above, but still in order to meet out with judicial propriety, with regards to the arguments exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s exclusively vests upon him, as to whether he wants to continue to pursue the relief sought for, in the principle proceeding under Section 9 filed by him or to withdraw it under the changed circumstances, which we will be dealing with, herein after, at least the Appellant cannot take the liberty to file an application for seeking a direction against the Applicant to Section 9 proceedings forcing him to withdraw the application or proceedings drawn by him under Section 12A of the I & B Code to be read with Regulation 30A of Insolvency and Bankruptcy Board of India (IBBI). On the ground that the Appellant claims that he has discharged his liability and the claim, which was the outstanding debt payable to the Operational Creditor and the consequential leave to withdraw Section 9 application. While elaborating on the argument extended by the Ld. Senior Counsel for the Appellant in support of his contention has submitted that, the nature of relief, which was sought by the Appellant in the aforesaid IA No. 30/2022, deserves to be granted for the reason being that, after passing of the order of CIRP proceedings he claims that there had been a settlement, which has been entered into betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /AMR/2020. And particularly, he has referred to the last paragraph of the said communication, wherein it was observed that the Applicant requested to consider the withdrawal of the petition under Section 12A of the I & B Code and proceed to file the same with the Ld. NCLT at the earliest to take over the necessary action for passing of an order in the nature of withdrawal of the petition under Section 9 of I & B Code, which has been sought for, by the Appellant/Applicant in IA No. 30/2022. The Ld. Senior Counsel for the Appellant, has further referred to Form-FA, that is a formatted application which is filed for withdrawal of the Corporate Insolvency Process, as contemplated under Regulation 30A of Insolvency and Bankruptcy Board of India, (Insolvency Resolution Process for Corporate Persons) Regulation 2016. This document too which has been relied upon, once again is not a document in original and not signed by the Applicant. What credence could be given to it by us is yet again a question to be answered. In the aforesaid form of withdrawal, it was prayed for that the application bearing diary number, as mentioned therein was for the purposes of withdrawal of the proceedings unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng within the zone of consideration to be granted by the Ld. Adjudicating Authority under Section 60 of I & B Code. In continuation, thereto, Ld. Senior Counsel for the Appellant has referred to the proof of payment, which is said to have been made on the basis of the Debt Settlement Agreement of 11.03.2022, and in relation thereto, he has drawn the attention of this Tribunal to the e-mail communication, which was said to have been made on 11.03.2022 at 17:56 itself, where the transfer of amount is a fact which is said to have been admitted. The said argument has been reiterated by the learned counsel for the Appellant by drawing the attention of this Appellate Tribunal, to the certification as made by the authorized signatory of the ICICI bank, about the transfer of the amount which was a certificate, which was issued on 17.03.2022 by the ICICI bank, which the Appellant reads the said document, as that the said document would be treated as to be a complete remittance of the amount under the Debt Settlement Agreement of 11.03.2022 and as thus in view of the aforesaid the Regulation 30A, ought to have been attracted and particularly when according to his argument, which he subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the amount by the Applicant/Respondent to Section 9 proceedings, would belie the observation which has been made in the communication made by the Respondent, as it was depicted on 12.03.2022. He further referred to, one of the e-mail communications of 14.03.2022, where the Appellant submits that he had made a consistent request to the Applicant/Respondent to file an appropriate application of withdrawal of the CIRP proceedings pending before the Ld. NCLT by invoking the provisions contained under Section 12A of I & B Code, owing to the alleged theory of receipt amount which has been claimed to have paid to the present Applicant/Respondent. We are of the tentative view, that as to whether we were at all required to speculate upon the factual argument extended by the Ld. Senior Counsel for the Appellant, to satisfy the proclaimed aspect of remittance of the amount, which could have necessitated the Applicant to Section 12 A proceedings to withdraw the Section 9 application, particularly at all at this stage when the nature of relief modulated by the Applicant was seeking a direction for, against the Respondent, directing for withdrawing of the Section 9 proceedings under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gards the ratio laid down in Swiss Ribbon (Supra), then in the instant case, Regulation 30A, which has been dealt with by the Hon'ble Apex Court deals with a latitude which has been granted to the Applicant for withdraw proceedings. We are of the view that direction to withdraw a proceeding by the Applicant to it, is in quite contra distinction then to for seeking a judicial direction to a person by forcing the Applicant to withdraw a proceeding. The Regulation 30A or the Judgment of the Hon'ble Apex Court, in itself does not contemplate anywhere that the Ld. Adjudicating Authority, under the garb of exercise of powers under Regulation 30A to be read with Section 60 of I & B Code, can issue a direction in the nature of made, by directing to an applicant to withdraw proceedings initiated by him, that too by way of a repetition when the Applicant himself happens to be the master of the proceedings drawn by him. The exclusive prerogative of continuing with the proceedings, would lie with the Applicant and he would not be governed or forced by the dictates of the opposite party to the proceedings, to seek a judicial order, by way of direction for withdrawal to be forced upon an Applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intment of the interim resolution professional). We make it clear that at any stage where the Committee of Creditors is not yet constituted, a party can approach NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule 11 of NCLT Rules, 2016, allow or disallow an application for withdrawal or settlement. This will be decided after hearing all the parties concerned and considering all relevant factors on the facts of each case." "83. The main thrust against the provision of Section 12-A is the fact that ninety per cent of the Committee of Creditors has to allow withdrawal. This high threshold has been explained in the ILC Report as all financial creditors have to put their heads together to allow such withdrawal as, ordinarily, an omnibus settlement involving all creditors ought, ideally, to be entered into. This explains why ninety per cent, which is substantially all the financial creditors, have to grant their approval to an individual withdrawal or settlement. In any case, the figure of ninety per cent, in the absence of anything further to show that it is arbitrary, must pertain to the domain of legislative policy, which has been explained by the Repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy process under the IBC; b. The above consolidation also sought to implement the principle of 'collective distribution', where the interests of all stakeholders were considered. The CIRP envisaged by the IBC is premised on the principle that each creditor of the same class should receive a share that is proportionate to the debt owed to him; c. IBC must not be used as a tool for coercion and debt recovery by individual creditors. Improper use of the IBC mechanism by a creditor includes using insolvency as a substitute for debt enforcement or attempting to obtain preferential payments by coercing the debtor using insolvency proceedings. That the mechanism under the IBC must not be used as a money recovery mechanism has been reiterated in a consistent line of precedent by this Court; 25 and d. The interests of the corporate debtor must be detached from those of its promoters/those who are in management. A "recalcitrant management"26 must be prevented from taking advantage of undue delays and preventing an inevitable insolvency. In other words, as noted by this Court in Arun Kumar Jagatramka (supra), the economic value of corporate structures is broader than the partisan intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Regulation 30A to be read with Section 60 of I & B Code. In fact, it was an issue which was partially touched upon, but only limited to the extent of withdrawal of a proceeding by an Applicant himself and not otherwise. There is yet another argument, which was extended by the Ld. Senior Counsel for the Appellant, with regards to, what would be the implication of various e-mail communications which has been made Inter se between the parties for the purposes of deriving a knowledge about the remittance of the amount so claimed to have been remitted by the Appellant to the Respondent to substantiate that there was no necessity to continue with the proceedings under Section 9 of I & B Code as it was instituted by the Respondent. The Ld. Senior Counsel for the Appellant, has referred to para 46 to 51 of a Judgment as reported in 2010 volume 3 SCC page 1 in the matter, Trimex International Fze Limited, Dubai v. Vedanta Aluminium Limited, India. Para 46 to 51 is extracted hereunder: - "46. Apart from the above minute to minute correspondences exchanged between the parties regarding the offer and acceptance, as rightly pointed out by Mr Venugopal the offer of 15-10-2007 contains a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of 15-10-2007 and the acceptance of 16-10-2007, the dispute is to be settled through arbitration. Once the contract is concluded orally or in writing, the mere fact that a formal contract has to be prepared and initialled by the parties would not affect either the acceptance of the contract so entered into or implementation thereof, even if the formal contract has never been initialled." "50. The acceptance conveyed by the respondent, which has already been extracted supra, satisfies the requirements of Section 4 of the Contract Act, 1872. Section 4 reads as under: "4. Communication when complete.--*** The communication of an acceptance is complete, as against the acceptor, when it comes to the knowledge of the proposer." "51. As rightly pointed out by the learned Senior Counsel for the petitioner, when Mr Swaminathan of Trimex opened the e-mail of Mr Swayam Mishra of Vedanta at 3.06 p.m. on 16-10-2007, it came to his knowledge that an irrevocable contract was concluded. Apart from this, the mandate of Section 7 of the Contract Act which stipulated that an acceptance must be absolute and unconditional has also been fulfilled. It is true that the first acceptance conveyed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicated, once it is disputed and debated upon and established by the Courts, the same has to be yet addressed upon by the principal Tribunal, before whom the proceedings are to be decided on merits, as to whether at all the e-mail communications which the appellant relies upon for having remitted the amount which was admittedly due to be paid, as to be the basis for substantiating his argument, in the light of Regulation 30A for seeking a direction against the Respondent for withdrawal of Section 9 proceedings, would yet be an issue which is yet to be decided by the Ld. Tribunal on merits. And at this stage, the e-mail communications, which are claimed by the Appellant are not disputed, as alleged by the Appellant, may not be an issue, which would be required, to be answered by us in an elaborate manner, particularly when the Respondent had denied with regards to the propriety of the e-mail communications and the consequential follow-up action, which is followed, amongst the parties qua the liabilities which was flowing from the proceeding under Section 9 of I & B Code, be that as it may. All these aspects would be considered by the Tribunal itself when the matter under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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