NCLAT Chennai Reprimands Bank For Filing Appeal With Delay, Refuses To Condone
Pallavi Mishra
15 Aug 2023 7:11 AM GMT
The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), while adjudicating an appeal filed in DCB Bank Limited v Ramakrishnan Sadasivam & Ors., has reprimanded the conduct of a Bank which filed an appeal exactly on the 45th day, despite having huge machinery at...
The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), while adjudicating an appeal filed in DCB Bank Limited v Ramakrishnan Sadasivam & Ors., has reprimanded the conduct of a Bank which filed an appeal exactly on the 45th day, despite having huge machinery at its disposal to prepare and file the appeal within statutory period of 30 days.
“Looking from any another angle, even if it is taken then that the appeal has been filed on 15th day of the extended period of 15 days even then there is no sufficient cause assigned by the Appellant as to why it had taken exactly 45 days in filing the appeal against the order dated 03.03.2022. The reasons are conspicuous by its absence especially when the Appellant is a Bank who had huge machinery at its disposal for the purpose of preparing the appeal and filing the same within the statutory period of 30 days.”
Background Facts
On 03.03.2022, the NCLT passed an order to proceed ex-parte against DCB Bank Ltd. (“Appellant”) in a matter before it. On the same day, another order was passed by the NCLT wherein an application filed by the Liquidator was allowed without hearing the Appellant since the proceedings were now ex-parte.
As both the orders were passed on 03.03.2022, the Appellant first challenged the order by which it was proceeded against ex-parte and reached up to the Supreme Court where its appeal was dismissed on 06.04.2023. However, after filing the review application, the Appellant decided to challenge the order dated 03.03.2022 whereby by the Liquidator’s application was allowed ex-parte.
The subsequent appeal has been filed after 400 days of delay. It was argued that the limitation for the purpose of filing this appeal would commence from 06.04.2023, since in between the Appellant was pursuing other legal remedies.
NCLAT Verdict
The Bench observed that under Section 61(1) of IBC, an appeal against the order of Adjudicating Authority (NCLT) can be filed before the NCLAT. Section 61(2) prescribes a period of 30 days within which the appeal under Section 61(1) is to be filed before the NCLAT. However, Section 61(2) proviso further provides for a period of 15 days for the purpose of extension of time, in case the Appellant satisfies the NCLAT that a sufficient cause exists for not filing appeal in time. But in no case the period of 15 days can further be extended.
On the issue of whether there is a sufficient cause assigned by the Appellant for condonation of delay, the Bench observed that the limitation to challenge the order started w.e.f. 03.03.2022. Presuming that the Appellant was pursuing its other remedy to challenge the order of ex-parte itself and had remained unsuccessful till the Supreme Court, the period of limitation is to be counted from 06.04.2023 (when appeal was dismissed). Consequently, the 30 days period for filing of the appeal under consideration expired on 06.05.2023.
If 15 days more are added as per the Proviso to Section 61(2), then the period of 45 days would have expired on 21.05.2023. However, the appeal has been filed on 22.05.2023 i.e. after the expiry of period of 15 days. Such delay cannot be condoned.
The Bench took the view that even if the appeal is presumed to be filed on the 45th day, no reason has been assigned by the Appellant as to why it took him exactly 45 days to file the appeal. The Appellant being a bank has huge machinery at its disposal to prepare and file the appeal within time. The Bench refused to condone the delay and dismissed the appeal.
“Looking from any another angle, even if it is taken then that the appeal has been filed on 15th day of the extended period of 15 days even then there is no sufficient cause assigned by the Appellant as to why it had taken exactly 45 days in filing the appeal against the order dated 03.03.2022. The reasons are conspicuous by its absence especially when the Appellant is a Bank who had huge machinery at its disposal for the purpose of preparing the appeal and filing the same within the statutory period of 30 days. Thus, looking from any angle, we do not find any reason to interfere in this application because of the absence of sufficient cause for condonation of delay to our satisfaction.”
Case Title: DCB Bank Limited v Ramakrishnan Sadasivam & Ors.
Case No.: Company Appeal (AT) (CH) (Ins) No. 207/2023
Counsel For Appellant: Mr. Krishnan Venugopal, Sr. Adv. Mr. Lakshana Viravalli, Advocate.
Counsel For Respondents: Mr. B Dhanaraj, Advocate for R1.
