Appeal against NCLT’s Order Rejected as Appellant-Director Disregarded HC’s Direction to File an Appeal within 2 Weeks

Case Details: M.K. Resely v. Union Bank of India - [2023] 149 taxmann.com 409 (NCLAT - Chennai)

Judiciary and Counsel Details

• • M. Venugopal, Judicial Member and Naresh Salecha, Technical Member  
  • S. Easwaran, Adv. for the Appellant.Varun Srinivasan, Shinu J. Pillai and A.G. Sathyanarayana, Advs. for the Respondent.

Facts of the Case

In the instant case, the CIRP application filed by respondent No. 1 (i.e. financial creditor) against the corporate debtor was admitted by the Adjudicating Authority (NCLT) and the liquidator was appointed.

After verifying the received claims, the liquidator observed that the land owned by the appellant (i.e. promoter/director of the corporate debtor) was in possession of respondent no. 1 bank.

The liquidator filed an application before the National Company Law Tribunal (NCLT) seeking directions for respondent No. 1 to surrender the possession of properties into the liquidate estate of the corporate debtor. The NCLT allowed the said application.

Aggrieved by the said order, the appellant filed a writ petition before the High Court on 26-01-2022. However, the High Court by an order dated 22-6-2022, disposed of the said writ petition.

Further, the High Court by an order dated 22-6-2022 directed the appellant to prefer an appeal within two weeks and further directed the NCLT to pass an order afresh.

However, the NCLT affirmed its previous order. The appellant filed an instant appeal before the National Company Law Appellate Tribunal on 6-7-2022.

The appellant sought the exclusion of the period from 25-1-2022 to 22-6-2022 for filing an instant appeal, as the time was spent pursuing a remedy in the High Court.

NCLAT Held

The NCLAT held that the period from 25-1-2002 till 22-6-2022 was to be excluded in computing the period of limitation.

The NCLAT, further held that since, in terms of the High Court’s order, the last date for filing an instant appeal expired on 5-7-2022, the appeal filed on 6-7-2022 was filed beyond the prescribed time limit granted by the High Court.

The NCLAT also held that the appellant had failed to adhere to the tenor and spirit of the judgment of the High Court in a meticulous and scrupulous manner. Accordingly, the appeal was to be rejected.

Case Review

• • C.A. Mahalingam Suresh Kumar v. Union Bank of India [2023] 149 taxmann.com 408 (NCLT – Kochi.) (para 41) affirmed [See Annex].
  • Rajkishore Mohanty v. Kangali Maharana AIR 1972 Ori 119 (para 38) followed.

List of Cases Referred to

• • MK Resely v. Union Bank of India [WP(C) No. 2832 of 2022, dated 22-4-2022],
  • MK Resely Son M.S. Kochuthamp v. Union Bank of India [WA No. 537 of 2022, dated 22-6-2022],
  • Kalpraj Dharamshi v. Kotak Investment Advisors Ltd. [2021] 10 SCC 401,
  • State Bank of India v. Visa Steel Ltd. [IA No. 774 of 2020, dated 15-3-2021],
  • V. Nagarajan v. Sks Ispat and Power Ltd. [2021] 131 taxmann.com 258 (SC),
  • Johnson Lifts (P.) Ltd. v. Tracks & Towers Infratech (P.) Ltd. [Company Appeal (AT) (CH) (Insolvency) No. 370 of 2022, dated 19-10-222],
  • Exide Industries Ltd. v. Jitender Kumar Jain, Resolution Professional of Morakhia Copper & Alloys (P.) Ltd. [Company Appeal (AT) (Insolvency) No. 1169 of 2022, dated 12-10-2022],
  • Noida Infratech (Two) (P.) Ltd. v. Enforcement Directorate Kolkata Zone Office [Company Appeal (AT) (Insolvency) No. 877 of 2022, dated 26-8-2022],
  • Prakash Chandra Kapoor v. Edelweiss Asset Reconstruction Company Ltd. [Company Appeal (AT) (Insolvency) No. 335 of 2020, dated 15-1-2022],
  • Chhote Lal Gupta, Proprietor Tirupati Enterprises v. Jai Balaji Jyoti Steels Ltd. [Company Appeal (AT) (Insolvency) No. 955 of 2022, dated 10-8-2022],
  • Central Board of Trustee, Employees Provident Fund Organization v. Shri Dutta India (P.) Ltd. [Company Appeal (AT) (Insolvency) No. 527 of 2021, dated 4-1-2022] and Rajkishore Mohanty v. Kangali Maharana AIR 1972 Ori 119 and Inacio Martini v. Narayan Hari Nayak [2010] 6 SCR 857.