Lenient Approach To Be Adopted While Condoning Delay In Refiling, But Sufficient Cause Must Be Shown: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that a lenient approach has to be adopted by the court while condoning the delay in refiling the appeal; however, sufficient cause must still be shown before the application for condonation of delay in refiling the appeal can be allowed. Brief Facts: Challenging the order dated 04.08.2023 passed by the Adjudicating Authority, the Company Appeal was filed on 14.09.2023 with a delay of 11 days (already condoned by order dated 04.03.2025). The applicant states that the appeal was filed on 14.09.2023, and defects were marked by the Registry on 22.09.2023. Time was taken to cure the defects as certain annexures were handwritten and needed to be typed. The Appellant submitted that with respect to refiling delay the court has to adopt a different yardstick and it has to be looked into more with leniency. The Supreme Court in Perymon Bhagbathy v. Bhargavi Amma (Dead) by LRs & Ors. (2008) held that the classic example is the difference in the approach of courts to applications for condonation of delay in filing an appeal and applications for condonation of delay in refiling the appeal after rectification of defects. Per contra, the Respondent relied on the NCLAT judgment in 'Govardhan Nirman Pvt. Ltd.' Vs 'Vaibhav Khanelwals & Anr.', where the Tribunal rejected application for refiling delay for condonation of 121 days. Observations: The Tribunal observed that the law regarding condonation of refiling delay is well settled. Although courts adopt a liberal approach, the applicant must show sufficient cause for condoning the delay. The NCLAT in Govardhan Nirman Pvt. Ltd (supra) held that at the outset, it is well recognised that a liberal approach is normally expected in condonation of refiling delay, and as long as sufficient cause is shown, such delay is to be condoned. It also held that however, delay can be condoned only if the Tribunal is satisfied that there was reasonable and justifiable cause. The delay must be tested on the parameters of reasonableness so that the time-bound objective of the IBC is not diluted and the interests of the parties are not prejudicially affected. Based on the above, the Tribunal held that from the facts, it is clear that the applicant took steps to cure the defect. Eight appellants are not from one place two are from Thane West, Maharashtra, and others from Beawar, Rajasthan. Sufficient cause has been shown through the application, additional affidavit, and rejoinder affidavit. Hence, sufficient cause is made out to condone the refiling delay. Refiling delay is condoned. Accordingly, the application was allowed. Case Title:Prakash Ambure & Ors. Versus Invent Bio-Med Pvt. Ltd. Case Number:I.A. No. 1680 of 2024 In Company Appeal (AT) (Insolvency) No. 582 of 2024 Judgment Date: 07/04/2025 For Appellants: Ms. Uttara Babbar, Sr. Advocate with Ms. Alpana Sharma and Ms. Rayana Mukherjee, Advocates. For Respondent : Mr. Ritesh Khare, Ms. Nikita Anand, Mr. Abhijeet Banarjee, Ms. Namarata Chadorkar and Mr. Piyush Jain, Advocates. Click Here To Read/Download The Order

Lenient Approach To Be Adopted While Condoning Delay In Refiling, But Sufficient Cause Must Be Shown: NCLAT

Mohd Malik Chauhan

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