Ashok Bhushan, J
1. This is an application (I.A. No. 5497 of 2023) filed by the Appellant praying for condonation of delay in filing the Appeal.
2. We have Heard Learned Counsel for the parties on the delay condonation application on 22nd December, 2023 and thereafter on 04th January, 2024.
3. The Appeal has been filed against the Order dated 20th March, 2023 passed by National Company Law Tribunal, New Delhi Bench (Court-II) in I.A. No. 3362 of 2020 which was filed by the Resolution Professional, Appellant aggrieved by the said order has come up in this Appeal.
4. This Appeal was e-filed on 02nd July, 2023, there being delay in filing the Appeal, an Application being I.A. No. 5497 of 2023 for condonation of delay has been filed. The ground taken in the Application for condonation is that the Order dated 20th March, 2023 passed by the Adjudicating Authority was passed without giving an opportunity to the Appellant. Appellant gained knowledge of the Order dated 20th March, 2023 only on 3rd April, 2023 when the Appellant was apprised of the Order by letter dated 3rd April, 2023 issued by the Respondent demanding amount of Rs. 74,48,820/-. Appellant after gaining knowledge of the same filed an application being I.A. No. 2337 of 2023 on 19th April, 2023 before the Adjudicating Authority under Section 60(5)(c) of the Code read with Rule 11 and Rule 49 of the NCLT Rules, 2016 seeking recalling of the order dated 20th March, 2023. The Application was dismissed by the Adjudicating Authority on 28th March, 2023 for non-prosecution. Appellant filed another Application being I.A. No. 3270 of 2023 on 10th May, 2023 under Section 60(5)(c) of the Code read with Rule 11 and Rule 49 of the NCLT Rules, 2016 seeking recalling of the order dated 20th March, 2023. Learned Counsel for the Appellant withdrew I.A. No. 3270 of 2023 and thus I.A. stood dismissed as withdrawn on 16th June, 2023.
5. Appellant have been bona fide exploring recall remedy available after coming to know about the Order dated 20th March, 2023 Appellant thereafter has filed this Appeal on 2nd July, 2023. In the Delay Condonation Application, Appellant has prayed for following relief:
“a. Condone the delay of 74 days in filing the present appeal against the impugned order dated 20.03.2023 passed Impugned Order dated 20.03.2023 passed by the Hon’ble National Company Law Tribunal, New Delhi Bench (Court-II) in I.A. No. 3362 of 2020 in Company Petition bearing No. (IB)-334(ND)/2018;
b. Pass any other order as deemed fit by this Hon’ble Tribunal.”
6. Learned Counsel for the Appellant in support of Delay Condonation Application submits that the period during which I.A. No. 2337 of 2023 and I.A. No. 3270 of 2023 remained pending before the Adjudicating Authority need to be excluded giving benefit of Section 14 of the Limitation Act and in event the said period is excluded Appeal has been filed within 43 days from getting knowledge of the Order hence the Appeal has been filed within condonable period of 45 days. It is submitted that Appellant having come to know about the Order on 3rd April, 2023 period from 21st March, 2023 to 3rd April, 2023 also not be calculated for counting the limitation period. Learned Counsel for the Appellant in support of his submissions has relied on several judgments of Hon’ble Supreme Court and this Tribunal which we shall notice hereinafter.
7. Learned Counsel for the Respondent now representing the Liquidator of the Corporate Debtor refuting the submissions of Appellant submits that Appellant is not entitled for the benefit of Section 14 of the Limitation Act on the strength of filing I.A. No. 2337 of 2023 and I.A. No. 3270 of 2023. Learned Counsel for the Respondent has relied on Judgment of this Tribunal in Harish Kumar vs. Solitaire Infomedia Private Limited & Anr. in C.A.(AT) ins. No. 348 of 2023 in support of this submission that Appellant is not entitled for exclusion of period during which application was pending before the Adjudicating Authority. Learned Counsel for the Liquidator further contended that even if for argument sake the period during which the aforesaid application were pending is excluded, the Appeal filed is beyond 45 days from the order. It is submitted that Appeal having not been filed within condonable period, delay condonation application deserves to be rejected.
8. The main submission which has been pressed by Learned Counsel for the Appellant is that Appellant is entitled to exclude period during which I.A. No. 2337 of 2023 and I.A. No. 3270 of 2023 was pending before the Adjudicating Authority as noted above. Order dated 20th March, 2023 was passed by the Adjudicating Authority on I.A. No. 3362 of 2020 which was filed by the Resolution Professional seeking a direction to the Respondent (Appellant herein) to pay the entire outstanding dues without any adjustment. In I.A. No. 3362 of 2020, the Adjudicating Authority has recorded that no one has appeared on behalf of Respondent (Appellant herein) despite service of notice in terms of Order dated 03.01.2023. The Respondent was set ex-parte and by the Impugned Order, direction was issued to contribute the amount of Rs. 74,48,828/-. Appellant’s case is that he came to know about the Order only when Respondent sent a letter on 3rd April, 2023. Appellant filed an I.A. No. 2337 of 2023 on 19th April, 2023 where Appellant prayed for following relief:
“(a) recall the exparte order dated 20.03.2023, in view of the above said facts and circumstances, and also in the interest of justice.
(b) Pass any such order(s) which this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of the case, in the interest of justice.”
9. The above application was dismissed for non-prosecution by the Adjudicating Authority on 28th April, 2023. After dismissal of the said application for non-prosecution, Appellant filed another Application I.A. No. 3270 of 2023 on 10th May, 2023 where again following prayers were made:
“(a) recall the exparte order dated 20.03.2023, in view of the above said facts and circumstances, and also in the interest of justice.
(b) Pass any such order(s) which this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of the case, in the interest of justice.”
10. The Application I.A. No. 3270 of 2023 came for consideration on 16th June, 2023 on which date the Adjudicating Authority passed following order:
“I.A.-3270/2023: Ld. Counsel appearing for the Applicant seeks to withdraw the present application. In view of the stand taken by the Ld. Counsel, the I.A. is dismissed as withdrawn.”
11. The question to be considered is as to whether Appellant is entitled for benefit of Section 14 of the Limitation Act for excluding the period during which aforesaid two applications were pending before the Adjudicating Authority.
12. Appellant’s case is that he was bona fide prosecuting the applications hence the said period needs to be excluded extending the benefit of Section 14 of the Limitation Act which submission has been refuted by Learned Counsel for the Respondent as noticed above.
13. From the submissions of Learned Counsel for the parties, the question to be answered is as to whether the period during which I.A. No.2337 of 2023 and 3270 of 2023 were pending before the Adjudicating Authority need to be excluded extending the benefit of Section 14 of the Limitation Act.
14. The benefit of Section 14 is available in Appeal filed under Section 61 of the IBC is now no longer res integra. Hon’ble Supreme Court in (2021) 10 SCC 401, Kalpraj Dharamshi Vs Kotak Investment Advisors Ltd. had occasion to consider Section 14 of the Limitation Act in reference to Appeal filed under Section 61 of the Code before the Appellate Tribunal. In the above case, Appeal was filed before the Appellate Tribunal against the Order dated 20th November, 2019 on 18.02.2020. The Appellate Tribunal had granted the benefit of Section 14 of the Limitation Act by excluding the period from 11.12.2019 to 28.01.2020 during which the writ petition was filed in the High Court. The grant of benefit of Section 14 in the Appeal was questioned before the Hon’ble Supreme Court. The arguments advanced by Learned Sr. Counsel challenging the extension of benefit of Section14 was noticed in paragraph 19 to 20 of the Judgment which are to the following effect:
“19. Shri Rohatgi further submitted that as held by this Court in Innoventive Industries Ltd. v. ICICI Bank [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 : (2018) 1 SCC (Civ) 356] , the I&B Code is a complete code in itself. He submitted that Section 61(2) of the I&B Code provides that the decision of the adjudicating authority (i.e. NCLT) may be challenged before NCLAT within 30 days. He submitted that an appeal would be tenable within a further period of 15 days, only when NCLAT comes to a satisfaction that there was a sufficient cause for not filing the appeal within a period of 30 days. He submitted that since the I&B Code is a complete Code, neither Section 5 nor Section 14 of the Limitation Act, 1963 (hereinafter referred to as “the Limitation Act”) would be applicable. He submitted that the judgment of NCLT was delivered on 28-11-2019 [Connect Residuary (P) Ltd. v. Ricoh (India) Ltd., 2019 SCC OnLine NCLT 14842] ; certified copies of the same were made available to KIAL on 18-12-2019; and appeals came to be filed on 18-2-2020. He submitted even if KIAL was given the benefit of the period of 20 days for obtaining the certified copies, still the appeals ought to have been filed on 65th day from the order of NCLT. It would be somewhere on 1-2-2020/2-2-2020. However, the appeals were filed on 18-2-2020.
20. Shri Rohatgi submitted that the litigant like KIAL, which has a team of legal experts at its disposal cannot be heard to say, that they were not aware of the alternate remedy and had bona fide filed the writ petition before the High Court. He submitted that KIAL is not entitled to the benefit of the exclusion of period between 11-12-2019 i.e. the date of filing of the writ petition and 28-1-2020 i.e. the date of dismissal of the writ petition by the High Court. He submitted that provisions of Section 14 of the Limitation Act would not at all be applicable and that NCLAT has totally erred in law, in entertaining the appeals which were ex facie beyond limitation.”
15. The Hon’ble Supreme Court considered the submissions, noticed the ambit and scope of the Section 14 of the Limitation Act and after noticing the judgments of the Hon’ble Supreme Court in MP Steel
Corporation Vs. CCE (2015) 7 SCC 58 and Consolidated Engineering Enterprises Vs. Irrigation Deptt. (2008) 7 SCC 169 held that benefit of Section 14 of the Limitation Act can be extended in Appeal filed under Section 61 of the IBC. Ultimately after elaborate discussion and after noticing the facts of the present case, it was held that Appellant was entitled to exclusion of period during which he was bona fide prosecuting before the High Court with due diligence. In paragraph 97 to 100, following was laid down:
“97. In the present case, the facts are totally contrary. KIAL had approached the High Court of Bombay making a specific grievance, that NCLT had adopted a procedure which was in breach of the principles of natural justice. It is specifically mentioned in the writ petition, that though an alternate remedy was available to it, it was approaching the High Court since the issue with regard to functioning of NCLT also fell for consideration. The proceedings before the High Court were hotly contested and by an elaborate judgment, the High Court dismissed [Kotak Investment Advisors Ltd. v. Krishna Chamadia, 2020 SCC OnLine Bom 197] the writ petition relegating the petitioner therein i.e. KIAL to an alternate remedy available in law. It is thus apparently clear, that KIAL was bona fide prosecuting a remedy before the High Court in good faith and with due diligence. In a given case, the High Court could have exercised jurisdiction under Article 226 of the Constitution inasmuch as, the grievance was regarding procedure followed by NCLT to be in breach of principles of natural justice. That would come within the limited area earmarked by this Court for exercise of extraordinary jurisdiction under Article 226 despite availability of an alternate remedy.
98. This Court recently in the judgment of Embassy Property Developments (P) Ltd. v. State of Karnataka [Embassy Property Developments (P) Ltd. v. State of Karnataka, (2020) 13 SCC 308] had an occasion to consider a similar issue. We find it apposite to refer to the question framed by this Court, which reads thus: (SCC p. 315, para 1)
“1. … (i) Whether the High Court ought to interfere, under Articles 226/227 of the Constitution, with an order passed by the National Company Law Tribunal in a proceeding under the Insolvency and Bankruptcy Code, 2016, ignoring the availability of a statutory remedy of appeal to the National Company Law Appellate Tribunal and if so, under what circumstances.”
99. It will also be apposite to reproduce the answer given by this Court: (Embassy Property Developments case [Embassy Property Developments (P) Ltd. v. State of Karnataka, (2020) 13 SCC 308], SCC p. 334, para 46)
“46. Therefore, in fine, our answer to the first question would be that NCLT did not have jurisdiction to entertain an application against the Government of Karnataka for a direction to execute supplemental lease deeds for the extension of the mining lease. Since NCLT [Vasudevan v. State of Karnataka, 2019 SCC OnLine NCLT 681] chose to exercise a jurisdiction not vested in it in law, the High Court of Karnataka was justified [State of Karnataka v. Tiffins Barytes Asbestos & Paints Ltd., 2019 SCC OnLine Kar 2463] in entertaining the writ petition, on the basis that NCLT was coram non judice.”
100. We, therefore, have no hesitation to hold, that KIAL was entitled to extension of the period during which it was bona fide prosecuting a remedy before the High Court with due diligence.”
16. The above judgment of Hon’ble Supreme Court thus clearly establishes that benefit of Section 14 of the Limitation Act can be extended in Appeal filed under Section 61 of the IBC. Thus the applicability of Section 14 of the Limitation Act with regard to Appeal under Section 61 is no more res integra.
17. We need to notice Section 14 of the Limitation Act which provides as follows:
“14. Exclusion of time of proceeding bona fide in court without jurisdiction.—(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.”
18. Ambit and scope of Section 14 of the Limitation Act came for consideration before several judgments of the Hon’ble Supreme Court. We need to notice few judgments where contents of section 14 of the limitation act was examined and principles were laid down for applicability of Section 14 of the Limitation Act.
19. In (1975) 4 SCC 628, Roshanlal Kuthalia & Ors. Vs R.B. Mohan Singh Oberoi, ingredients of Section 14 were considered and following was laid down in paragraph 25-27:
“25. Section 14, which neatly fits in, is simple in its ingredients, to the extent we are called upon to consider.
26. It is a sine qua non of a claim under Section 14 that the earlier proceeding is prosecuted in good faith. It is beyond cavil that before launching on execution of the Pakistani decree Shri Oberoi had taken advice from two leading Indian lawyers and set about the job diligently. Bona fides is thus writ large in his conduct. The controversy is that the defect of non-executability of the foreign decrees by virtue of the Governor-General's Order does not savour of a jurisdictional or like error but of a mere misconstruction of law. We need not labour the obvious that here the prosecution of the execution proceedings was repelled because and only because the institution of such proceeding on the execution side was without jurisdiction. Normally, a money claim due under a foreign decree can be enforced on the original side by a suit under Sections 9, 13 and 26 CPC, in the appropriate court and the executing court has no jurisdiction to straightway levy execution under Order 21 CPC. An exception is provided in this regard by the Governor-General's Order and a special forum viz. the High Court is indicated when the decree to be executed is of the Supreme Court of Pakistan. All this pertains to jurisdiction and in the Associated Hotels case this Court negatived executability solely on grounds jurisdictional or quasi-jurisdictional. Section 14 thus comes to the rescue of the defendant in this suit.
27. Certainly, Section 14 is wide enough to cover periods covered by execution proceedings (See1959 SCR 811 at 818 [Raghunath Das v. Gokul Chand, AIR 1958 SC 827, 831 : 1959 SCR 811, 818] ). After all Section 47 itself contemplates transmigration of souls as it were of execution petitions and suits. The substantial identity of the subject-matter of the lis is a pragmatic test. Moreover, the defects that will attract the provision are not merely jurisdictional strictly so called but others more or less neighbours to such deficiencies. Any circumstance legal or factual, which inhibits entertainment or consideration by the Court of the dispute on the merits, comes within the scope of the section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right [See(1971) 2 SCR 397 at 401 [India Electric Works Ltd. v. James Mantosh, AIR 1971 SC 2313, 2316 : (1971) 2 SCR 397, 401] ]. In the Associated Hotels case (i. e. the very lis in its earlier round on the execution side) this Court pointed out [(1961) 1 SCR 259 at 272 [Associated Hotels of India Ltd. v. R.B. Jodhu Mal Kuthalia, AIR 1961 SC 156, 163] that the question was one of initial jurisdiction of the Court to entertain the proceedings. Thus in this very matter, the obstacle was jurisdictional and the exclusionary operation of Section 14 of the Limitation Act was attracted.”
20. The next judgment where Section 14 was elaborately considered is the Judgment of Hon’ble Supreme Court in (2004) 3 SCC 458, Union of India & Ors. Vs. West Coast Paper Mills Ltd. & Anr. In paragraph 14 of the Judgment, following was laid down:
“14. In the submission of Mr Malhotra, placing reliance on CST v. Parson Tools and Plants [(1975) 4 SCC 22 : 1975 SCC (Tax) 185] to attract the applicability of Section 14 of the Limitation Act, the following requirements must be specified: (SCC p. 25, para 6)
“6. (1) both the prior and subsequent proceedings are civil proceedings prosecuted by the same party;
(2) the prior proceedings had been prosecuted with due diligence and in good faith;
(3) the failure of the prior proceedings was due to a defect of jurisdiction or other cause of a like nature;
(4) both the proceedings are proceedings in a court.”
In the submission of the learned Senior Counsel, filing of civil writ petition claiming money relief cannot be said to be a proceeding instituted in good faith and secondly, dismissal of writ petition on the ground that it was not an appropriate remedy for seeking money relief cannot be said to be “defect of jurisdiction or other cause of a like nature” within the meaning of Section 14 of the Limitation Act. It is true that the writ petition was not dismissed by the High Court on the ground of defect of jurisdiction. However, Section 14 of the Limitation Act is wide in its application, inasmuch as it is not confined in its applicability only to cases of defect of jurisdiction but it is applicable also to cases where the prior proceedings have failed on account of other causes of like nature. The expression “other cause of like nature” came up for the consideration of this Court in Roshanlal Kuthalia v. R.B. Mohan Singh Oberoi [(1975) 4 SCC 628] and it was held that Section 14 of the Limitation Act is wide enough to cover such cases where the defects are not merely jurisdictional strictly so called but others more or less neighbours to such deficiencies. Any circumstance, legal or factual, which inhibits entertainment or consideration by the court of the dispute on the merits comes within the scope of the section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right.”
21. The Hon’ble Supreme Court in above case considered expression “other cause of a like nature” as referred to in Judgment of Roshanlal Kuthalia (supra). A three judge bench in Consolidated Engineering Enterprises (supra) had occasion to consider legislative policy of Section 14 and conditions which are required to be fulfilled for attracting the Section 14. Hon’ble Supreme Court laid down five conditions which are necessary for pressing in service of Section 14. Paragraph 21-22 of the Judgment, following has been laid down:
“21. Section 14 of the Limitation Act deals with exclusion of time of proceeding bona fide in a court without jurisdiction. On analysis of the said section, it becomes evident that the following conditions must be satisfied before Section 14 can be pressed into service:
(1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party;
(2) The prior proceeding had been prosecuted with due diligence and in good faith;
(3) The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature;
(4) The earlier proceeding and the latter proceeding must relate to the same matter in issue and;
(5) Both the proceedings are in a court.
22. The policy of the section is to afford protection to a litigant against the bar of limitation when he institutes a proceeding which by reason of some technical defect cannot be decided on merits and is dismissed. While considering the provisions of Section 14 of the Limitation Act, proper approach will have to be adopted and the provisions will have to be interpreted so as to advance the cause of justice rather than abort the proceedings. It will be well to bear in mind that an element of mistake is inherent in the invocation of Section 14. In fact, the section is intended to provide relief against the bar of limitation in cases of mistaken remedy or selection of a wrong forum. On reading Section 14 of the Act it becomes clear that the legislature has enacted the said section to exempt a certain period covered by a bona fide litigious activity. Upon the words used in the section, it is not possible to sustain the interpretation that the principle underlying the said section, namely, that the bar of limitation should not affect a person honestly doing his best to get his case tried on merits but failing because the court is unable to give him such a trial, would not be applicable to an application filed under Section 34 of the Act of 1996. The principle is clearly applicable not only to a case in which a litigant brings his application in the court, that is, a court having no jurisdiction to entertain it but also where he brings the suit or the application in the wrong court in consequence of bona fide mistake or (sic of) law or defect of procedure. Having regard to the intention of the legislature this Court is of the firm opinion that the equity underlying Section 14 should be applied to its fullest extent and time taken diligently pursuing a remedy, in a wrong court, should be excluded.”
22. We thus need to examine whether the aforesaid five conditions as mentioned in the above judgment are fulfilled in the facts of the present case to extend the benefit of Section 14 in exclusion of time during which applications were pending.
23. We now proceed to examine the conditions as laid down in the above Judgment in seriatim.
i. Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party. There is no dispute that in the present case, the applications before the Adjudicating Authority being I.A. No. 2337 of 2023 and 3270 of 2023 as well as this Appeal has been prosecuted by the same Appellant hence the condition No. (i) is fulfilled.
ii. The prior proceeding had been prosecuted with due diligence and in good faith. The Appellant’s case is that immediately after coming to know about the order dated 20th March, 2023 by email received from Respondent No. 1 on 3rd April, 2023, he filed the application for recall of the Impugned Order on 19th April, 2023 which was dismissed for non-prosecution on 28th April, 2023 thereafter another application I.A. No. 3270 of 2023 was filed which was dismissed as withdrawn. There is nothing on record on which it can be said that Appellant has not been prosecuting before the Adjudicating Authority with due diligence and good faith. We thus hold that second condition is also fulfilled.
iii. The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature. The above Condition No. (iii) is based on statutory requirement as contained in Section 14(1) and Section 14(2) of the limitation act. The statutory requirement as contained in Section 14 is “which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it”. Thus the exclusion of which is sought was not entertained by the Court due to defect of jurisdiction or other cause of a like nature. Present is not a case where it is contended that there was any defect of jurisdiction in the Adjudicating Authority in entertaining the recall application. Recall Application was filed by the Appellant to recall the ex-parte order under Rule 60(5)(c) read with Rule 11 and 49 of NCLT Rules, 2016. The expression “other cause of a like nature” came for consideration in Roshanlal Khutalia (supra) where Hon’ble Supreme Court held following in para 27:
“27……Moreover, the defects that will attract the provision are not merely jurisdictional strictly so called but others more or less neighbours to such deficiencies. Any circumstance legal or factual, which inhibits entertainment or consideration by the Court of the dispute on the merits, comes within the scope of the section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right”
Thus, it is not only the defect of jurisdiction which attracts applicability of Section 14 but other cause is that which are more or less neighbours to such deficiencies as has been held in the above case by the Hon’ble Supreme Court.
Learned Counsel for the Appellant has relied on Judgement of Hon’ble Supreme Court in M.P. Steel Corporation Vs. CCE (supra) where Hon’ble Supreme Court had occasion to consider Section 14 of the Limitation Act. Hon’ble Supreme Court noticed Section 14 and also referred to Judgment of Union of India Vs. West Coast (supra) and in paragraph 49 to 51, following was laid down:
“49. The language of Section 14, construed in the light of the object for which the provision has been made, lends itself to such an interpretation. The object of Section 14 is that if its conditions are otherwise met, the plaintiff/applicant should be put in the same position as he was when he started an abortive proceeding. What is necessary is the absence of negligence or inaction. So long as the plaintiff or applicant is bona fide pursuing a legal remedy which turns out to be abortive, the time beginning from the date of the cause of action of an appellate proceeding is to be excluded if such appellate proceeding is from an order in an original proceeding instituted without jurisdiction or which has not resulted in an order on the merits of the case. If this were not so, anomalous results would follow. Take the case of a plaintiff or applicant who has succeeded at the first stage of what turns out to be an abortive proceeding. Assume that, on a given state of facts, a defendant-appellant or other appellant takes six months more than the prescribed period for filing an appeal. The delay in filing the appeal is condoned. Under Explanation (b) of Section 14, the plaintiff or the applicant resisting such an appeal shall be deemed to be prosecuting a proceeding. If the six month period together with the original period for filing the appeal is not to be excluded under Section 14, the plaintiff/applicant would not get a hearing on merits for no fault of his, as he in the example given is not the appellant. Clearly therefore, in such a case, the entire period of nine months ought to be excluded. If this is so for an appellate proceeding, it ought to be so for an original proceeding as well with this difference that the time already taken to file the original proceeding i.e. the time prior to institution of the original proceeding cannot be excluded. Take a case where the limitation period for the original proceeding is six months. The plaintiff/applicant files such a proceeding on the ninetieth day i.e. after three months are over. The said proceeding turns out to be abortive after it has gone through a chequered career in the appeal courts. The same plaintiff/applicant now files a fresh proceeding before a court of first instance having the necessary jurisdiction. So long as the said proceeding is filed within the remaining three month period, Section 14 will apply to exclude the entire time taken starting from the ninety-first day till the final appeal is ultimately dismissed. This example also goes to show that the expression “the time during which the plaintiff has been prosecuting with due diligence another civil proceeding” needs to be construed in a manner which advances the object sought to be achieved, thereby advancing the cause of justice.
50. Section 14 has been interpreted by this Court extremely liberally inasmuch as it is a provision which furthers the cause of justice. Thus, in Union of India v. West Coast Paper Mills Ltd. [(2004) 3 SCC 458] , this Court held: (SCC p. 464, para 14)
14. “… In the submission of the learned Senior Counsel, filing of civil writ petition claiming money relief cannot be said to be a proceeding instituted in good faith and secondly, dismissal of writ petition on the ground that it was not an appropriate remedy for seeking money relief cannot be said to be ‘defect of jurisdiction or other cause of a like nature’ within the meaning of Section 14 of the Limitation Act. It is true that the writ petition was not dismissed by the High Court on the ground of defect of jurisdiction. However, Section 14 of the Limitation Act is wide in its application, inasmuch as it is not confined in its applicability only to cases of defect of jurisdiction but it is applicable also to cases where the prior proceedings have failed on account of other causes of like nature. The expression ‘other cause of like nature’ came up for the consideration of this Court in Roshanlal Kuthalia v. R.B. Mohan Singh Oberoi [(1975) 4 SCC 628] and it was held that Section 14 of the Limitation Act is wide enough to cover such cases where the defects are not merely jurisdictional strictly so called but others more or less neighbours to such deficiencies. Any circumstance, legal or factual, which inhibits entertainment or consideration by the court of the dispute on the merits comes within the scope of the section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right.”
51. Similarly, in India Electric Works Ltd. v. James Mantosh [(1971) 1 SCC 24] , this Court held: (SCC pp. 28-29, para 7)
7. “It is well settled that although all questions of limitation must be decided by the provisions of the Act and the courts cannot travel beyond them the words ‘or other cause of a like nature’ must be construed liberally. Some clue is furnished with regard to the intention of the legislature by Explanation III in Section 14(2). Before the enactment of the Act in 1908, there was a conflict amongst the High Courts on the question whether misjoinder and non-joinder were defects which were covered by the words ‘or other cause of a like nature’. It was to set at rest this conflict that Explanation III was added. An extended meaning was thus given to these words. Strictly speaking misjoinder or non-joinder of parties could hardly be regarded as a defect of jurisdiction or something similar or analogous to it.”
Hon’ble Supreme Court has repeated that the Section 14 is a beneficial provisions and it should be liberally interpreted to give relief to a litigant who was bona fide prosecuting the legal remedy. The above judgment of the Hon’ble Supreme Court has reiterated the principles which were well settled by earlier judgements as referred therein.
Learned Counsel for the Appellant has also placed reliance on Judgment of the Hon’ble Supreme Court in State of Kerala & Ors. Vs. M.G. Presanna, (2011) 15 SCC 203 which was a case where a writ petition was allowed by a Ld. Single Judge on 08th April, 2009, review petition was filed in which there was a delay. Learned Single Judge has condoned the delay but ultimately dismissed the review petition. A Writ Appeal was filed. Division Bench dismissed the writ petition due to delay in filing the Appeal. Hon’ble Supreme Court in the above context took the view that delay in filing the review petition was satisfactory explained and Division Bench ought to have condoned the delay of entire period upto the disposal of the review petition. The Appellant having been bona fide pursuing other remedies, in paragraph 4 and 5, following was held:
“4. It is true that technically the Division Bench was not bound to accept the period in respect of which delay in filing the review petition had been condoned by the learned Single Judge, as a period in regard to which sufficient cause was made out for condoning the delay, while considering the question of delay, in filing the writ appeal. That is because the learned Single Judge was dealing with delay in filing the review petition, whereas the Division Bench was dealing in filing the writ appeal.
5. Nevertheless, if the delay of 305 days in filing the review petition had been condoned by the learned Single Judge, as having been satisfactorily explained and thereafter the review petition had been dismissed without prejudice to the right to file an appeal, the Division Bench in all fairness ought to have excluded the entire period up to the date of disposal of the review petition, as a period bona fide spent in pursuing other remedies. Of course, the position would be different if the Division Bench had found that filing of the review petition was not for bona fide reasons or there were other reasons to suspect the bona fides of the appellant. Be that as it may.”
Learned Counsel for the Appellant submits that above judgment fully supports the contention that period which was taken in prosecuting application before the Adjudicating Authority can be excluded since the Appellant has been bona fide prosecuting. The above judgment supports the submission that even if proceeding were before the same authority against which appeal was filed the said period can also be considered for extending the benefit of Section 14 of the Limitation Act but the question which was considered in the case was delay in filing the writ appeal. Division Bench has dismissed the writ appeal on the ground of delay which was reversed by the Hon’ble Supreme Court observing that delay in filing the review was condoned by Single Judge, Division Bench ought to have excluded the entire period upto the disposal of the review petition.
Learned Counsel for the Appellant has relied on State Bank of India Vs. Visa Steel Limited I.A. No. 774 of 2020 in C.A.(At) ins. No. 294 of 2020. In the above case, the review application was dismissed by the Adjudicating Authority. In paragraph 5 of the Judgment, following has been noted:
“The ‘Review Application’ was dismissed by the ‘Adjudicating Authority’ on the ground of ‘lack of jurisdiction’ without looking into the merits of the case.”
The Appeal was filed with delay and Hon’ble Supreme Court extended the benefit of Section 14 and condoned the delay in filing the Appeal. In paragraph 35 of the Judgment, following has been held;
“35. As far as the present case is concerned, the action of the Petitioner/Appellant in moving the Hon’ble Supreme Court of India in Civil Appeal No.3169 of 2019 after the ‘Impugned Order’ dated 25.6.2019 passed by the ‘Adjudicating Authority’, instead of preferring an ‘Appeal’ before this ‘Tribunal’ and later filing of the ‘Review Proceeding’ before the ‘Adjudicating Authority’, pursuant to the liberty granted by the Hon’ble Supreme Court as per order dated 29.7.2019 are bonafide, of course based on act of prudence or reasonable person in prosecuting the concerned proceeding with reasonable due diligence. Suffice it for this ‘Tribunal’ to point out that the ‘time spent’ in prosecuting the legal remedy by the Petitioner/Appellant/Bank is required to be excluded while computing the period of limitation as envisaged under section 61(2) of the ‘Insolvency & Bankruptcy Code, 2016, in the considered opinion of this ‘Tribunal’. In any event, the Petitioner/Appellant/Bank cannot be attributed with ‘Lack of Bonafides’ in resorting to the legal proceedings and time spent in this regard. Therefore, this ‘Tribunal’ by adopting a practical, purposeful, meaningful, a rational approach and by taking a pragmatic view of the matter in a lenient and liberal manner condones the delay of 193 days in furtherance of substantial cause of justice.”
Another Judgment relied is Mr. Bhaskar vs. M/s. Sai Precious Trexim Pvt. Ltd. C.A.(AT) Ins. No. 531 of 2020 where this Tribunal has condoned the delay in filing the Appeal on the ground that Appellant came to know about the Order on 04th March, 2020. In paragraph 1 and 2 of the Judgment, following has been held:
“Heard the Learned Counsel for the Applicant / Appellant in I.A. No. 1343 of 2020. As a matter of fact, the Applicant / Appellant prays for condonation of delay of 16 days in filing the Appeal, on the ground that the free copy of the impugned order dated 31.01.2020 passed by the National Company Law Tribunal, New Delhi Bench-VI, New Delhi in C.P. No. IB-3228 (ND)/2019 was not communicated as per Section 7(7) of the ‘I&B’ Code. Furthermore, the copy of the impugned order was communicated to the Applicant / Appellant by the representative of the first Respondent on 04.03.2020 and accordingly the Applicant / Appellant had produced the copy of the impugned order from the website of National Company Law Tribunal. Therefore, according to the Applicant / Appellant the instant Appeal was filed within the period of limitation, from the date of knowledge of passing the impugned order. The other plea taken on behalf of the Applicant / Appellant is that the ‘Corporate Debtor’ was never issued with a notice by the Tribunal, in the application filed by the First Respondent / ‘Financial Creditor’.
2. Taking note of the fact that the Applicant / Appellant had averred in I.A. No. 1343 of 2020 that the Appellant to know of the impugned order only on 04.03.2020 through the representative of the First Respondent on being communicated etc., this Tribunal by taking a practical, purposeful, meaningful, pragmatic view and result oriented approach condones the delay in question and disposes of the Interlocutory Application. No costs.”
The above Judgment is based on the ground that Appellant came to know about the order only on 04th March, 2020 hence the delay was condonable. In present case we are considering the question of exclusion of period during which I.As filed by the Appellant were pending. The above judgment does not in any manner help the Appellant in the facts of the present case.
Learned Counsel for the Appellant has also relied on Judgment of Hon’ble Delhi High Court in Bank of India Vs. M/s. Mehta Brothers and Ors. ILR 1991 Delhi 374. The above was a case where an application under order 9 CPC Rule 13 proviso was filed for setting aside the ex-parte decree. In the above context, Hon’ble Delhi high Court held that although counsel did not appear and ex-parte decree was passed but there was sufficient cause for setting aside the ex-parte decree, in paragraph 27, following was held:
“27. The limitation which has been provided under Section 61(2) and Section 421 is the limitation for filing an appeal. The Rules, neither the Code nor the Companies Act, 2013 lay down any limitation for representation/refiling of the Appeal. Rule 26 of NCLAT Rules, 2016, which govern the re-presentation/refiling of the appeal does not provide for any limitation. When Sub-Rule (3) of Rule 26 empowers the Registrar to allow the parties concerned a reasonable time or to extend the time for compliance, which power is not hedged by any period of limitation, it can be safely said that no limitation is prescribed for re-presentation/refiling of an appeal.”
The above judgment was also on the sufficient cause for condoning the delay in filing the application under order 9 rule 13 along with delay condonation application and does not help the Appellant in the present case.
We have already noticed that one of the conditions to be fulfilled for extending the benefit of Section 14 is that failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature. We have noticed that in the present case first application was dismissed for non-prosecution and second application was dismissed as withdrawn.
Learned Counsel for the Appellant was present on 16th June, 2023 and Learned Counsel for the Appellant made a request to withdraw the Application which was allowed by the Adjudicating Authority.
The question is as to whether when Appellant himself withdrew the proceeding and proceeding are dismissed as withdrawn whether it is covered by the expression “other cause of like nature”. Hon’ble Supreme Court in Roshanlal Kuthalia (supra) has explained the expression stating that defects which attracting provisions are more or less neighbours to such deficiencies thus there has to be deficiency in the proceeding due to which it could not be entertained. The present is a case where application filed by the Appellant for recall of ex-parte order was fully maintainable and the Application was ultimately dismissed as withdrawn therefore it is clear that the 3rd condition that failure of prior proceeding was due to defect of jurisdiction or other cause of like nature is not fulfilled.
Learned Counsel for the Respondent has placed reliance on Judgment of this Tribunal in C.A.(AT) Ins. No. 348 of 2023 in I.A. No. 1174 of 2023, Harish Kumar Vs. Solitaire Infomedia Pvt. Ltd. in which Judgment also benefit of Section 14 was claimed on the basis of filing an application before the Adjudicating Authority which proceeding was ultimately withdrawn. This court took the view that benefit of Section 14 cannot be attracted. In paragraph 3 and 4 of the Judgment following has been held:
“3. Learned Counsel for the Appellant has placed reliance on the judgement of Hon’ble Supreme Court in Sesh Nath Singh & Anr. in Civil Appeal No. 9198 of 2019 Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd. & Anr. and the judgement of this Tribunal in IA no. 2315/2023 in Company Appeal (AT) Insolvency No. 694 of 2023 in the matter of Vikram Bhawanishankar Sharma, Member of the Suspended Board of Directors of Supreme Vasai Bhiwandi Tollways Pvt. Ltd. Versus SREI Infrastructure Finance Ltd. & Anr. The order on the basis of which the Appellant claims exclusion of time u/s 14 dated 13.02.2023 is to the following effect:-
“Heard the submissions made by Ld. Counsel for the Applicant. Ld. Counsel for the Applicant has prayed for grant of liberty to withdraw the present application i.e. Rest.A/24/20223 and to prefer an appeal against the order dated 22.12.2022. Prayer is granted and application stands disposed of as withdrawal.”
4. The present is a case where we cannot hold that the application filed for restoration was in a wrong forum which could not be decided for the defect of jurisdiction or of like nature. Conditions as contemplated u/s 14 are not attracted to extend the benefit u/s 14 to the Appellant. The judgement of Hon’ble Supreme Court in Sesh Nath Singh & Anr. in Civil Appeal No. 9198 of 2019 Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd. & Anr. was a case where the benefit was extended u/s 14 of the Limitation Act with regard to period during which writ petition was pending challenging the proceedings under SARFAESI Act. Hon’ble Supreme Court in the said judgement has taken the view that the benefit of the proceedings could have been extended for the purpose. In paragraph 85 following has been observed: -
“85. In the instant case, the proceedings under the SARFAESI Act may not have formally been terminated. The proceedings have however been stayed by the High Court by an interim order, on the prima facie satisfaction that the proceedings initiated by the financial creditor, which is a cooperative bank, was without jurisdiction. The writ petition filed by the Corporate Debtor was not disposed of even after almost four years. The carriage of proceedings was with the Corporate Debtor. The interim order was still in force, when proceedings under Section 7 of the IBC were initiated, as a result of which the Financial Creditor was unable to proceed further under SARFAESI Act.”
Learned Counsel for the Appellant has also relied on Judgment of the Sesh Nath Singh Vs. Baidyabati Sheoraphuli Coop. Bank Ltd., (2021) 7 SCC 313. In the said judgment, the Hon’ble Supreme Court had held that extending the benefit of period during which proceedings were pending under SARFAESI Act 2002 as well as in the Writ Petition, the said benefit was extended by the Hon’ble Supreme Court on the ground that SARFAESI proceedings were without jurisdiction which observation was made by Hon’ble High Court. In Paragraph 83, 84, 85, following was held by Hon’ble Supreme Court.:
“83. In the instant case, the proceedings under the SARFAESI Act may not have formally been terminated. The proceedings have however been stayed by the High Court by an interim order [Debitech Fabtech (P) Ltd. v. Baidyabati Seoraphully Coop. Bank Ltd., 2017 SCC OnLine Cal 9738] , on the prima facie satisfaction that the proceedings initiated by the financial creditor, which is a cooperative bank, was without jurisdiction. The writ petition filed by the corporate debtor was not disposed of even after almost four years. The carriage of proceedings was with the corporate debtor. The interim order [Debitech Fabtech (P) Ltd. v. Baidyabati Seoraphully Coop. Bank Ltd., 2017 SCC OnLine Cal 9738] was still in force, when proceedings under Section 7 IBC were initiated, as a result of which the financial creditor was unable to proceed further under the SARFAESI Act.Thus the Judgment of the Hon’ble Supreme Court does not in any manner help the Appellant in the present case.
84. In the instant case, even if it is assumed that the right to sue accrued on 31-3-2013 when the account of corporate debtor was declared NPA, the financial creditor initiated proceedings under the SARFAESI Act on 18-1-2014, that is the date on which notice under Section 13(2) was issued, proceeded with the same, and even took possession of the assets, until the entire proceedings were stayed by the High Court by its order dated 24-7-2017 [Debitech Fabtech (P) Ltd. v. Baidyabati Seoraphully Coop. Bank Ltd., 2017 SCC OnLine Cal 9738] . The proceedings under Section 7 IBC were initiated on 10-7-2018.
85. In our view, since the proceedings in the High Court were still pending on the date of filing of the application under Section 7 IBC in NCLT, the entire period after the initiation of proceedings under the SARFAESI Act could be excluded. If the period from the date of institution of the proceedings under the SARFAESI Act till the date of filing of the application under Section 7 IBC in NCLT is excluded, the application in NCLT is well within the limitation of three years. Even if the period between the date of the notice under Section 13(2) and date of the interim order [Debitech Fabtech (P) Ltd. v. Baidyabati Seoraphully Coop. Bank Ltd., 2017 SCC OnLine Cal 9738] of the High Court staying the proceedings under the SARFAESI Act, on the prima facie ground of want of jurisdiction is excluded, the proceedings under Section 7 IBC are still within limitation of three years.”
Thus the Judgment of the Hon’ble Supreme Court does not in any manner help the Appellant in the present case.
As noted above, Appellant having withdrawn the application before the Adjudicating Authority which was fully maintainable and the Application was dismissed not on account of defect of jurisdiction or other cause of like nature, the 3rd condition as per the Judgment of the Hon’ble Supreme Court in Consolidated Engineering Enterprises Ltd. (supra) is wanting in the present case thus we hold that 3rd condition is not fulfilled for giving benefit of Section 14 of the Limitation Act
iv. Coming to Condition No. IV “the earlier proceeding and the latter proceeding must relate to the same matter in issue and;”. This condition is clearly fulfilled.
v. Now coming to 5th Condition that Both the proceedings are in a court”. The applicability of Section 14 before this Tribunal is well settled as already noticed thus the condition no. V is also fulfilled.
24. Hon’ble Supreme Court in Kalpraj Dharamshi (supra) has also held that even if Section 14 is not strictly applicable, the principles under Section 14 are attracted. Section 14 of the Limitation Act is applicable in IBC proceeding which is now settled by several judgments of the Hon’ble Supreme Court as well as by virtue of Section 238A of the Code which clarifies about the applicability of limitation act.
25. We are also conscious of the judgment of the Hon’ble Supreme Court in J. Kumaradasan Nair and Anr. Vs. IRIC Sohan & Ors. (2009) 12 SCC 175 where it was held that even if sub-section 2 of section 14 of limitation act may per se not be applicable, principles can be applicable for the purpose of condonation of delay in terms of Section 5 thereof. Paragraph 18 of the Judgment is as follows:
“18. It is also now a well-settled principle of law that mentioning of a wrong provision or non-mentioning of any provision of law would, by itself, be not sufficient to take away the jurisdiction of a court if it is otherwise vested in it in law. While exercising its power, the court will merely consider whether it has the source to exercise such power or not. The court will not apply the beneficent provisions like Sections 5 and 14 of the Limitation Act in a pedantic manner. When the provisions are meant to apply and in fact found to be applicable to the facts and circumstances of a case, in our opinion, there is no reason as to why the court will refuse to apply the same only because a wrong provision has been mentioned. In a case of this nature, sub-section (2) of Section 14 of the Limitation Act per se may not be applicable, but, as indicated hereinbefore, the principles thereof would be applicable for the purpose of condonation of delay in terms of Section 5 thereof.”
26. We thus are of the view that even Section 14 is not attracted the benefit of Section 5 of the limitation act can be extended and the cause can be considered for condonation of delay by applying Section 5 but in the IBC there is a cap on the jurisdiction in condoning the delay as per Section 61(2) proviso, jurisdiction to condone the delay is only of 15 days. Period during which application was pending before the Adjudicating Authority is not excluded under Section 14 of the Limitation Act, the delay in filing the Appeal is beyond 15 days which is not within condonable limit. Thus, delay is beyond 15 days and cannot be condoned.
27. We thus are of the view that this Appeal has been filed on 2nd July, 2023 challenging the Order dated 20th March, 2023 beyond 45 days. Our jurisdiction to condone the delay being limited to 15 days and we having held that benefit of Section 14 of the Limitation Act cannot be extended to exclude period during which I.A. No. 2337 of 2023 and I.A. No. 3270 of 2023 remained pending before the Adjudicating Authority, the Delay Condonation Applications which prays condonation of 74 days delay deserves to be dismissed. Consequently, Memo of Appeal is also rejected.
