Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(Online)(NCLAT) 982

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Justice Sharad Kumar Sharma (Member(Judicial)) , Mr. Jatindranath Swain (Member (Technical)) ,
Omkara Assets Reconstruction Private Limited – Appellant
Versus
MR. Yadavalli Sai Karunakar – Respondent
368/CN/2024 COMPANY APPEAL(AT)(INS)

Advocates:
Mr. PH. Arvindh Pandian, Senior Advocate; Ms. Lakshana Viravalli, Advocate; Mr. M. Anil Kumar, Advocate for R1

The limitation period for filing an appeal under the IBC is calculated from the date of judgment, not from the date of knowledge of the order.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 60(5) and 61 - Appeal against NCLT order regarding liquidation - Appellant directed to tender surplus amount of Rs.96.28 Crores and reimburse costs of Rs.90,70,048/- for asset preservation - Appeal filed with a delay of 16 days, contending knowledge of order only on 19.08.2024 - Court held the delay not condonable as the appeal was filed beyond the prescribed 45 days from the date of judgment. (Paras 1-18)

(B) Limitation - Knowledge of order - The limitation period for filing an appeal is not reckoned from the date of knowledge but from the date of judgment unless a party is aggrieved and not part of the proceedings. (Paras 10-12)

(C) Exemption from certified copy - The application for exemption from filing a certified copy does not absolve the appellant from the limitation requirements set forth in the Code. (Paras 9, 18)

Facts of the case:
The Corporate Debtor was liquidated, and the Appellant, a Secured Financial Creditor, challenged the NCLT's directive to tender surplus funds and reimburse costs. The appeal was filed after a delay, citing late knowledge of the order.

Findings of Court:
The appeal was dismissed due to the delay exceeding the permissible limit under the Code.

Issues: The main issues included the reckoning of limitation period from the date of knowledge versus the date of judgment and the applicability of exemption from filing certified copies.

Ratio Decidendi: The court ruled that the limitation period must be calculated from the date of judgment, not from the date of knowledge, and that failure to apply for a certified copy within the limitation period is detrimental to the appeal.

Result: Appeal dismissed.

ORDER

Per : Justice Sharad Kumar Sharma, Member (Judicial):

1. The instant Appeal has been filed by the Appellant, being the Secured Financial Creditor, seeking to challenge the Impugned Order dated 29.07.2024, passed in IA No. 1378 / 2024 in CP No. 278 / 2018 by the learned NCLT, Hyderabad, by virtue of which, he has been directed to tender an amount of Rs.96.28 Crores (estimated surplus amount) to the Liquidation Account and to reimburse the costs amounting to Rs.90,70,048/- incurred for protection and preservation of the fixed assets belonging to the Liquidation Estate.

2. Brief facts of the case are given below: The Corporate Debtor M/s. B.S. Limited was admitted into CIRP proceedings, on an application under Section 7 of I & B Code, 2016, moved by State Bank of India, by the Order dated 01.11.2018 of Learned NCLT, Hyderabad, and the Resolution Professional (RP) was appointed on 29.11.2018. Subsequently, the Learned NCLT had ordered Liquidation of the Corporate Debtor on 17.10.2019 and the Respondent No. 1 herein was appointed as Liquidator on 25.10.2019. IFCI, one of the Secured Financial Creditors, chose not to relinquish its rights over the charged assets. The concerned Secured Assets were handed over to IFCI on 27.09.2021 by the Liquidator for realization. The IFCI subsequently on 14.02.2023, assigned the debts of the Corporate Debtor along with the Secured Assets to the Appellant herein. The Liquidator, meanwhile proceeded to sell the Corporate Debtor as a going concern (excluding the Secured Assets already handed over) and distributed the proceeds among the Stakeholders.

Consequent to it, the Liquidator filed an Interlocutory Application being IA No. 1378 / 2024 under Section 60 (5) of I & B Code, 2016, to be read with Regulation 38 of IBBI (Liquidation Process) Regulations, 2016, before Learned NCLT, Hyderabad, submitting that the First Charge Holders have not sold the Secured Assets handed over to them, that the estimated surplus from sale of these assets is yet to be realized and that he may be permitted to distribute this estimated surplus amount among the Stakeholders, after the realization of the said unsold assets of the Corporate Debtor.

The said application stood allowed, by the learned NCLT, Hyderabad, by an Order dated 29.07.2024, with the following directions: ``In light of the above observations and discussion of the law, this Authority issues the following directions: i. M/s. Omkara Assets Reconstruction Private Limited and Bank of India, as first charge holders, are directed to tender the surplus amount of Rs.96.28 crores to the Liquidation Account.

ii. The Liquidator is authorized to distribute the surplus amount among the secured financial creditors in proportion to their admitted claims, as detailed in paragraph 12 of the application.

iii. M/s. Omkara Assets Reconstruction Private Limited and Bank of India are directed to reimburse costs amounting to Rs.90,70,048/- incurred for the protection and preservation of the Fixed Assets to the Liquidation Estate.’’

Aggrieved by this Order, the Appellant has proceeded to file the instant Appeal.

3. According to the report of the Registry, the Company Appeal was e-filed on 14.09.2024. The Registry has reported that there is a delay of 16 days in filing the instant Appeal.

4. The Appellant has filed a Condone Delay Application being IA No. 1012 / 2024, praying for condonation of 16 days of delay, which has chanced in filing the Appeal.

5. The Appellant has contended that, the Impugned Judgment was rendered on 29.07.2024, that he got the knowledge of order only on 19.08.2024; and that immediately after getting the knowledge of the impugned order dated29.07.2024, on 19.08.2024, he has taken action and has filed the appeal on14.09.2024 i.e. well within the condonable period as contemplated under Section 61(1) of I & B Code, 2016.

6. He has submitted that for obtaining the Certified copy of the Impugned Judgment, he filed an application on 08.10.2024. but t

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2024 Supreme(Online)(NCLAT) 982

NATIONAL COMPANY LAW APPELLATE TRIBUNALJustice Sharad Kumar Sharma (Member(Judicial)) , Mr. Jatindranath Swain (Member (Technical)) ,Omkara Assets Reconstruction Private Limited – AppellantVersusMR. Yadavalli Sai Karunakar – Respondent368/CN/2024 COMPANY APPEAL(AT)(INS)

The limitation period for filing an appeal under the IBC is calculated from the date of judgment, not from the date of knowledge of the order.

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Justice Sharad Kumar Sharma (Member(Judicial)) , Mr. Jatindranath Swain (Member (Technical)) ,
Omkara Assets Reconstruction Private Limited – Appellant
Versus
MR. Yadavalli Sai Karunakar – Respondent
368/CN/2024 COMPANY APPEAL(AT)(INS)