NCLAT cannot condone delay beyond 15 days in appeal due to lack of jurisdiction even if fraud has been played

National Company Law Appellate Tribunal

National Company Law Appellate Tribunal, New Delhi: A Division Bench comprising of Rakesh Kumar Jain*, J. and Mr. Naresh Salecha (Technical Member), held that even if, a fraud has been played, the delay beyond 15 days in preferring the appeal cannot be condoned by this Tribunal because of lack of jurisdiction

In the instant matter, the appellant/ex-director of the Corporate Debtor (Pushpa Builders Ltd.) preferred an appeal against the impugned order dated 20-09-2022 passed by the Adjudicating Authority admitting an application filed under S. 7 IBC by the Financial Creditor/Respondent (Paramveer Distributors (P) Ltd.) against the Corporate Debtor/appellant. The instant appeal was filed alongwith an application invoking R. 11 of the NCLAT Rules, 2016 for condonation of delay of 12 days in filing of the appeal on the ground of ill health of the appellant which was beyond the control of the appellant.

The appellant contended that the delay was neither intentional nor deliberate but was due to multi ailments of health issues of appellant who is 70 years old senior citizen which resulting in communication gap between the appellant with his counsel.

The respondent contended that both the period of 30 days prescribed for filing of the appeal and the additional period of 15 days has expired and therefore an application filed beyond the period of an entire 45 days is not maintainable.

The NCLAT relied on Ss. 61(1) and 61(2) IBC, V. Nagarajan v. SKS Ispat and Power Ltd., (2022) 2 SCC 244 where it was held that “The litigant has to file its appeal within thirty days, which can be extended up to a period of fifteen days, and no more, upon showing sufficient cause. A sleight of interpretation of procedural rules cannot be used to defeat the substantive objective of a legislation that has an impact on the economic health of a nation.” and National Spot Exchange Ltd. v. Dunar Foods Ltd., (2022) 11 SCC 761, where the Supreme Court held that “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 NCLAT held that the present appeal has been filed beyond the period of 45 days and even if a fraud has been carried out as submitted by the appellant, this Tribunal lacks jurisdiction to condone a delay concerned in this case. Both the application for condonation of delay and main appeal is dismissed.

“…even if, the Appellant has submitted that a fraud has been played, in so far as, the delay is concerned, it cannot be condoned by this Tribunal because of lack of jurisdiction.”

[Pushpa Builders Ltd. v. Paramveer Distributor (P) Ltd., 2023 SCC OnLine NCLAT 146, decided on 28-03-2023]

*Judgment by Justice Rakesh Kumar Jain

Advocates who appeared in this case :

Mr. Rajeev Lochan, Counsel for the Appellant;

Mr. Ishaan Mukherjee and Mr. Rohit Saroj, Counsel for the Respondent No. 1;

Mr. Abhishek Anand, Mr. Shankari Mishra, Ms. Niharika Tanwar and Mr. Karan Kholi, Counsel for the Resolution Professional.

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