No Scope For Condonation Of Delay Beyond 15 Days, Much Less 45 Days: NCLAT Delhi

Background Facts

M/s Subhkamna Buildtech Pvt. Ltd. (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (“CIRP”) and Mr. Anand Sonbhadra was appointed as the Resolution Professional.

The NCLT passed an order on 12.09.2022 in the CIRP proceedings of the Corporate Debtor. Mr. Diwakar Sharma (“Appellant”) is the erstwhile Managing Director of Corporate Debtor who is confined in jail since 12.09.2018. On 10.11.2022 the Appellant filed an appeal against the order dated 12.09.2022. It was submitted that the certified copy of the Order dated 12.09.2022 was never received by the Appellant and the Resolution Professional has sent a copy of the said order through DTDC courier on 11.10.2022. The appeal has been filed with a delay of 4 days after expiry of 30 days from the date of the service of order, as the Appellant was unwell and admitted in the jail hospital.

It was further submitted that the Appellant was not before the Court at the time of pronouncement of order, therefore, had no knowledge about the same. In this backdrop, limitation for filing of the appeal should be counted from the date of knowledge.

Issue

Whether the delay caused in filing of the appeal much beyond the period of 45 days can be condoned by NCLAT?

NCLAT Verdict

The Bench observed that Section 61(1) of the Insolvency and Bankruptcy Code, 2016 (“IBC”) provides right of appeal to an aggrieved person. Further, Section 61(2) of IBC provides a period of limitation of 30 days for filing an appeal under Section 61(1) before the Appellate Authority. The proviso of Section 61(2) provides another period of 15 days which can be extended in case the Appellant satisfies the Appellate Authority about the existence of a sufficient cause for not filing the appeal in time. However, there is no further provision in IBC for looking into the aspect of condonation of delay beyond the period of 15 days much less 45 days.

The Bench placed reliance on the Supreme Court verdict in National Spot Exchange Limited v Mr. Anil Kohli, Civil Appeal No. 6187 of 2019, wherein it has been held that:

“Thus, considering the statutory provisions which provide that delay beyond 15 days in preferring the appeal is uncondonable, the same cannot be condoned even in exercise of powers under Article 142 of the Constitution.”

The Bench held that there is no scope for condonation of delay beyond the period of 15 days much less 45 days, as there is no window available for NCLAT to exercise its jurisdiction for condonation of delay.

The appeal was dismissed.

Case Title: Diwakar Sharma v Anand Sonbhadra

Case No.: Company Appeal (AT) (Ins.) No. 1446 of 2022

Counsel For Applicant: Advocate Mrinal Harshvardhan

Counsel For Respondent: Mr. Abhishek Anand, Mr. Nipun Gautam, Advocates for RP.

Click Here To Read/Download Order