Condonation Of Delay Is Case Specific, No Inflexible Rule Can Be Laid Down To Condone Delay U/S 61 Of IBC: NCLAT

The NLCAT New Delhi bench of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) affirmed that the condonation of delay in filing of the Appeal is on facts of each case, no inflexible rule can be laid down while exercising jurisdiction to condone the delay. In Appeals filed under section 61 the IBC, the jurisdiction of the Tribunal to condone the delay in filing of the Appeal after expiry of the limitation period, is only 15 days, which jurisdiction can be exercised.Brief FactsThis is an application praying for condonation of delay of five days in filing of the Appeal.The Applicant states that he was unable to file the present Appeal against the order dated 19.12.2023 within the limitation period due to the below-mentioned reasons-That the Applicant/Appellant/Resolution Professional of High Ground Enterprise Limited is living in Mumbai and due to health ailments, he was unable to seek timely legal advice for filing the Appeal before this Hon'ble Appellate Tribunal.That the Applicant could access and read the impugned order dated 19.12.2023 only after a week or two after the impugned order uploaded. That upon becoming aware of the impugned order, the Applicant due to his health ailments, could not immediately seek legal guidance and advice.That the delay in filing the present appeal is partly due to the time taken to search for legible/clear copy of the bank statement.Per contra, the respondent submitted that Applicant in the present application has nowhere mentioned good and sufficient/ justifiable cause, as to why the delay should be condoned.Learned Counsel for the Respondent in support of his submission relied on the judgments of the Hon'ble Supreme Court in Ajay Dabra vs. Pyare Ram & Ors (2023).NCLAT's AnalysisThe tribunal, at the outset, discussed section 61 of the IBC which provides for condonation of delay in filing the appeal and observed that under Section 61, sub-section (2) proviso of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “IBC”), the Court has jurisdiction to condone the delay of only 15 days after expiry of period of limitation. The tribunal further observed that the condonation of delay in filing of the Appeal is on facts of each case, no inflexible rule can be laid down while exercising jurisdiction to condone the delay. In Appeals filed under the IBC, the jurisdiction of this Tribunal to condone the delay in filing of the Appeal after expiry of the limitation period, is only 15 days, which jurisdiction can be exercised.The tribunal referred to the Supreme Court judgment in Pathupati Subba Reddy (Died) by LRs & Ors. vs. The Special Deputy Collector (LA) (2024) wherein it was held that the courts have adopted a very liberal approach in construing the phrase 'sufficient cause' used in Section 5 of the Limitation Act in order to condone the delay to enable the courts to do substantial justice and to apply law in a meaningful manner which subserves the ends of justice.While applying the above ratio to the present case, the tribunal observed that in the present Appeal the order impugned was passed on 19.12.2023 and this Appeal has been e-filed on 23.01.2024, i.e. with a delay of five days only.The tribunal further observed that the delay in filing of the Appeal is only five days and sufficient explanation was given by the Appellant/ Applicant. The Appeal has been filed by the Resolution Professional (“RP”), who is living in Mumbai and in the application, it was pleaded by the RP that due to health ailments, he was unable to seek timely legal advice in filing the Appeal and further it is stated that one of the annexures filed in the Company Petition No.696 of 2020 was dim and an endeavour was taken to file clear and legible copy, for which certain time was taken.The tribunal concluded that sufficient cause has been shown for condonation of five days delay in filing of the Appeal. Accordingly, delay condonation application was allowed.Case Title: Dhiren Shantilal Shah RP of High Ground Enterprise Ltd. v. Swastik Productions Pvt. LtdCase Reference: Company Appeal (AT) (Insolvency) No. 360 of 2024 & Interlocutory Application Nos.1223 of 2024Judgment Date: 08/11/2024Click Here To Read/Download Order

Condonation Of Delay Is Case Specific, No Inflexible Rule Can Be Laid Down To Condone Delay U/S 61 Of IBC: NCLAT

Mohd Malik Chauhan

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