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Avail Financial Services Ltd vs. Sun World City Pvt. Ltd. - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (22 Feb 2021)

Huge delay cannot be condoned under Section 61 of the I and B Code



In facts of present case, impugned order has been passed by the Adjudicating Authority (National Company Law Tribunal) dismissing Appellant's application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (I and B Code) on the ground that, the application is barred by limitation, debt did not fall within the purview of financial debt and default was not established. The issue raised by the Appellant in present appeal is that, the Respondent has deducted TDS on interest accrued on loan advanced to it which amounts to admission bringing default within the period of limitation and default being computed on its basis, initiation of Corporate Insolvency Resolution Process sought in terms of application filed under Section 7 of I and B Code is well within limitation.

The impugned order has been passed on 4th October, 2019. Appellant seeks condonation of delay of 434 days in filing present appeal primarily on the ground that, prior to imposition of lockdown counsel for the Appellant Company had asked for certain documents which Appellant Company failed to provide to learned counsel owing to Nationwide Lockdown imposed by the Government and thereafter due to intervention of lockdown and festival / court holidays there was delay in finalizing the draft of appeal paper book.

There is a huge delay of 434 days. Even if it be taken as true, failure to furnish documents necessary for filing of the appeal by the Appellant Company to its learned counsel does not constitute a sufficient ground to condone delay at least till 25th March, 2020 when in the wake of outbreak of COVID 19 nationwide lockdown was imposed by the Government.

Under Section 61(2) of the I and B Code, every appeal under Section 61(1) has to be filed within 30 days before this Appellate Tribunal which has jurisdiction, on a sufficient cause being assigned, to condone delay not exceeding 15 days. As the appeal was required to be filed within a maximum period of 45 days, even if the cause assigned would be sufficient cause within the meaning of Section 61(2) proviso, from the date of order, that period of 45 days expired on 19th November, 2019.

The nationwide lockdown was imposed on 25th March, 2020. Limitation has been extended from 25th March, 2020 in terms of directions given by the Hon'ble Apex Court as also by this Appellate Tribunal in suo moto jurisdiction which continue to be in force till date. However, there is huge delay of 140 days beyond the ordinary period of limitation prescribed for filing of appeal under Section 61 of I and B Code which is not within the jurisdiction of this Appellate Tribunal to condone. The Appellant's application for condonation of delay is rejected and appeal is also dismissed as being barred by limitation.


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