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2024 Supreme(Online)(NCLAT) 1446

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
ASHOK BHUSHAN, J
Mr. Sanjay Jain – Appellant
Versus
State Bank of India – Respondent
Company Appeal (AT) (Insolvency) No. 822 of 2024



Advocates:
For the Appellant: Ms. Ranjana Gawai, Ms. Shankari Mishra, Ms. Jyoti Khurana, Mr. Pervinder, Mr. Shikher
For the Respondents: Ms. Anika Bajpai, Mr. Anand M. Mishra

Tribunal lacks jurisdiction to condone delay in appeal beyond 15 days under Section 61(2) of the IBC.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 61(2) - Condonation of delay - Jurisdiction of Tribunal to condone delay limited to 15 days beyond 30 days from order date - In the current case, the Appellant's delay of 26 days is beyond this jurisdiction. (Paras 9, 14, 18)

(B) Natural Justice - Requirement of proper service of notice before an order is passed against a party - Appellant argued that notice was sent to an outdated address, hence service was invalid, and a fraud was played by the Bank. (Paras 6, 7, 12)

(C) Legal Principles - Condonation of delay requires sufficient cause, and past judgments emphasize failing to serve notices properly can lead to rejection of ex-parte orders. (Paras 4, 15, 16)

Facts of the case:
This appeal arises against an order where the Adjudicating Authority admitted a Section 95 Application against the Appellant without proper notification. Appellant claims lack of service at the correct address, leading to an ex-parte order.

Findings of Court:
The request for condoning a delay of 26 days was rejected as the Tribunal lacks jurisdiction to exceed a 15-day extension.

Issues: The key issue pertains to the validity of notice served and the possibility of unjust ex-parte orders based on insufficient service.

Ratio Decidendi: The Tribunal reiterated the jurisdiction limits in condoning appeal delays and emphasized the need for proper service.

Result: The Application for condonation of delay of 26 days is rejected.

Table of Content
1. appellant requests condonation of delay in appeal filing. (Para 1 , 2 , 3)
2. determination of delay condonation jurisdiction limits and argument justification. (Para 4 , 5 , 10 , 11)
3. discussion on service of notice validity and argument of fraud against the appellant. (Para 6 , 7 , 12)
4. court's determination regarding jurisdiction limits under section 61(2). (Para 9 , 14 , 18)

ORDER

ASHOK BHUSHAN, J.

I.A. No. 2971/2024 has been filed by the Appellant praying for condonation of 26 days delay in filing the Appeal. The Adjudicating Authority by Impugned Order dated 26.02.2024 admitted the Section 95 Application filed by the State Bank of India (SBI) against the Appellant, Sanjay Jain filed under Section 95.

2. In Section 95 Application, Notices were issued to the Appellant on 06.01.2023, which returned unserved. Adjudicating Authority had passed an Order permitting substituted service by Publication in the Newspapers. Notices were published in the 2 Newspapers. Adjudicating Authority passed an Order on 23.11.2023 holding that despite service of Notice by substituted mode, no one has appeared, and the Personal Guarantor is set an Ex-Parte. After the said Order, Section 95 Application was admitted by Order dated 26.02.2024.

3. This Appeal has been e-filed by the Appellant on 22.04.2024 with delay of 26 days. Appellant in his I.A. No.2971/2024 has prayed for following prayers:

“1) Pass an Order for condonation of delay of 26 days in filing the Captioned Appeal;

2) Pass any other further order as this Appellate Tribunal may deem appropriate in the facts and circumstances of the instant case.”

4. Notices were issued on delay condonation Application by Order dated 22.05.2024. A Reply to the delay condonation Application was filed.

Rejoinder Affidavit has also been filed by the Appellant to the Reply filed by the Bank. Written Submissions has also been filed by the Parties.

5. We have heard Mrs. Ranjana Gavai, Learned Counsel for the Appellant and Ms. Ankita Bajpai for the SBI and Mr. Anand M. Mishra Counsel for the Resolution Professional (RP).

6. Learned Counsel for the Appellant submits that the Appellant came to know about the Impugned Order only on 30.03.2024 when Appellant had approached the Punjab National Bank (PNB) for One Time settlement (OTS). Appellant thereafter has filed the Appeal within 30 days of the knowledge. It is submitted that Appeal having been filed within 30 days from date of knowledge is not barred by time. Learned Counsel for the Appellant submits that Appellant was never served any Notice in Section 95 Application which was filed by the SBI. It is submitted that the Notices which were issued in Section 95 Application where notice sent on address of the Appellant which is 1–42, Phase–I, Ashok Vihar, New Delhi, which was address given in the Guarantee Deed executed in the Year 2011–12. Notice sent on the said address had received back unserved. Appellant has not resided on the said address, since the said Assets were sold in the Year 2012 itself, which has been noted by the Order dated 05.03.2019, passed by the Debt Recovery Tribunal (DRT) in the matter of `Bank of Baroda’ Vs. ‘M/s. Allied Perfumers Pvt. Ltd. reported in RC/327/2015 in OA/203/2013. It is submitted that Bank was well aware that said address is no more address of the Appellant, but Notices were sent at wrong address to suppress and oust the rights of the Appellant. In the proceeding before the DRT, Appellant has shown its address which was different from Ashok Vihar’s address. Appellant having never been served, service by any other substituted mode is invalid, since there was no basis to suggest that defendant was avoiding service. A fraud was played by the Bank and without serving the Appellant, the Ex-Parte Order has been passed.

7. Learned Counsel for the Bank refuting the submissions of the Counsel for the Appellant submits that Appellants have given its address i.e., I–42, Phase–I, Ashok Vihar, New Delhi to the Bank, which was me

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