Case: National Spot Exchange Limited Vs. Mr. Anil Kohli, Resolution Professional for Dunar Foods Limited

2. The facts leading to the present appeal in nutshell are as under:That the State Bank of India has initiated the insolvency proceedings before the NCLT under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the IBC) against one Dunar Foods Limited (hereinafter referred to as the Corporate Debtor) on the ground that Corporate Debtor had taken credit limits by hypothecating the commodities kept in the warehouses of the appellant – National Spot Exchange Limited; that the NCLT admitted the petition and commenced the corporate insolvency resolution process against the corporate debtor under the provisions of the IBC. Interim Resolution Professional (for short, IRP) was appointed. IRP invited the claims from the creditors of the corporate debtor – Dunar Foods Limited on or before 17.01.2018; that the appellant herein submitted its claim and also forwarded its claim through courier to IRP as per Form F of the IBC. At this stage it is required to be noted that the appellant herein earlier filed Money Suit against one PD Agro Processors Pvt. Ltd. (hereinafter referred to as PD Agro) and the corporate debtor being Commercial Suit No. 11 of 2014 before the High Court of Judicature at Bombay. The High Court vide order dated 11.04.2014 in Notice of Motion 807 of 2014 in CS No. 328 of 2014 injuncted PD Agro and the Corporate Debtor from disposing of, alienating, encumbering, parting with possession of and/or otherwise creating third party rights in respect of its movable/immovable properties/assets; that one FIR No. 216 of 2013 was also lodged against PD Agro and subsequently the same came to be transferred to the Economic Offence Wing, Mumbai for further investigation; that the provisions of Maharashtra Protection of Depositors Act (MPID) Act, 1999 were also invoked; that it is the case on behalf of the appellant that the investigation report submitted by the investigating agency revealed that PD Agro has siphoned off funds to the tune of Rs.455 crores during the year 2011-12 and Rs. 289 crores during the year 2012-13 to the Corporate Debtor; that the High Court of Bombay passed a decree in Commercial Suit No. 11 of 2014 against PD Agro for Rs. 633,66,98,350.40 with 9% interest from the date of accrual of the course of action/default. The aforesaid shall be dealt with hereinafter.2.1 That in response to the public announcement by the IRP inviting the claims from the creditors of the Corporate Debtor (Dunar Foods Limited) dated 6.1.2018, the appellant submitted the claim of Rs. 673.85 crores; that it was the case on behalf of the appellant that a decree has been passed against PD Agro for an amount of Rs.633,66,98,350.40 and on investigation by the Directorate of Enforcement, it is found that Rs. 744 crores have been siphoned off by PD Agro to the Corporate Debtor. IRP rejected the claim of the appellant on 18.06.2018 on the ground that there is no privity of contract between the appellant and the corporate debtor and that there is no letter or guarantee issued by the corporate debtor in favour of the appellant. That the rejection of the claim by IRP came to be challenged by the appellant before NCLT being Miscellaneous Application No. 603 of 2018 and the NCLT by order dated 6.3.2019 rejected the said application and upheld the decision of the IRP not to include the claim of the appellant as a creditor.3. Being aggrieved and dissatisfied with the order passed by the NCLT dated 6.3.2019, the appellant herein preferred an appeal before the NCLAT. There was a delay of 44 days in preferring the said appeal. The appeal before the NCLAT was required to be filed within a maximum period of 45 days (30 days + 15 days). However, there was a further delay of 44 days beyond a total period of 45 days. Therefore, considering sub-section (2) of Section 61 of the IBC which provides for powers to the Appellate Tribunal to condone the delay of only 15 days which it can condone over the period of 30 days, if there is a sufficient cause, by the impugned order, the learned Appellate Tribunal has dismissed the appeal on the ground that the Appellate Tribunal has no jurisdiction to condone the delay beyond 15 days and thereby the appeal is barred by limitation.4. Feeling aggrieved and dissatisfied with the impugned order passed by the learned NCLAT in dismissing the appeal on the ground of limitation and refusing to condone the delay which was beyond the period of 15 days, which the Appellate Tribunal could have condoned, the appellant – National Spot Exchange Limited has preferred the present appeal.

Reasoning: 7.1 In the present case, even the appellant applied for the certified copy of the order passed by the adjudicating authority on 8.4.2019, i.e., after a delay of 34 days. Therefore, even the certified copy of the order passed by the adjudicating authority was applied beyond the prescribed period of limitation, i.e., beyond 30 days. The certified copy of the order was received by the appellant on 11.04.2019 and the appeal before the NCLAT was preferred on 24.06.2019, i.e., after a delay of 44 days. As the Appellate Tribunal can condone the delay up to a period of 15 days only, the Appellate Tribunal refused to condone the delay which was beyond 15 days from completion of 30 days, i.e., in the present case delay of 44 days and consequently dismissed the appeal. Therefore, as such, it cannot be said that the learned Appellate Tribunal committed any error in not condoning the delay of 44 days, which was beyond the delay of 15 days which cannot be condoned as per Section 61(2) of the IB Code.8. An identical question came to be considered by this Court in the case of Popular Construction Co. (supra). While considering Section 34 of the Arbitration and Conciliation Act, 1996 which provided that an application for setting aside of the award cannot be made after three months and it further provided that if the court is satisfied that the applicant was prevented by sufficient cause from making an application within the said period of three months, it may entertain the application within a further period of thirty days, but not thereafter, after considering Section 29 (2) of the Limitation Act and after observing that Arbitration & Conciliation Act, 1996 is a special law and that Section 34 of the Arbitration & Conciliation Act, 1996 provides for a period of limitation different from that prescribed under the Limitation Act, ultimately this Court held that Section 5 of the Limitation Act shall not be applicable as the legislature has prescribed a special limitation for the purpose of the appeal as provided under Section 34 of the Arbitration & Conciliation Act, 1996. In paragraphs 11 & 12, it is observed and held as under:11. Thus, where the legislature prescribed a special limitation for the purpose of the appeal and the period of limitation of 60 days was to be computed after taking the aid of Sections 4, 5 and 12 of the Limitation Act, the specific inclusion of these sections meant that to that extent only the provisions of the Limitation Act stood extended and the applicability of the other provisions, by necessary implication stood excluded.12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are but not thereafter used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the court could entertain an application to set aside the award beyond the extended period under the proviso, would render the phrase but not thereafter wholly otiose. No principle of interpretation would justify such a result.8.1 An identical question came to be considered by a Constitution Bench of this Court in the case of Hilli Multipurpose Cold Storage Private Limited (supra). The question before the Constitution Bench was, whether the District Forum has the power to extend the time for filing of response to the complaint beyond the period of 15 days, in addition to 30 days, as envisaged under Section 13(2)(a) of the Consumer Protection Act? After approving the decision of this Court in the case of J.J. Merchant v. Shrinath Chaturvedi, reported in (2002) 6 SCC 635   and after considering the various decisions of this Court on the point, the Constitution Bench has ultimately concluded that the District Forum has no jurisdiction and/or power to extend the time for filing of response to the complaint beyond the period of 15 days, in addition to 30 days, as envisaged under Section 13(2)(a) of the Consumer Protection Act.10. In the case of Rohitash Kumar (supra), this court observed and held as under:-23. There may be a statutory provision, which causes great hardship or inconvenience to either the party concerned, or to an individual, but the Court has no choice but to enforce it in full rigor. It is a well settled principle of interpretation that hardship or inconvenience caused, cannot be used as a basis to alter the meaning of the language employed by the legislature, if such meaning is clear upon a bare perusal of the Statute. If the language is plain and hence allows only one meaning, the same has to be given effect to, even if it causes hardship or possible injustice. (Vide: Commissioner of Agricultural Income Tax, West Bengal v. Keshab Chandra Mandal, AIR 1950 SC 265 ; and D. D. Joshi & Ors. v. Union of India & Ors., (1983) 2 SCC 235 ).24. In Bengal Immunity Co. Ltd. v. State of Bihar & Ors., AIR 1955 SC 661  it was observed by a Constitution Bench of this Court that, if there is any hardship, it is for the legislature to amend the law, and that the Court cannot be called upon, to discard the cardinal rule of interpretation for the purpose of mitigating such hardship. If the language of an Act is sufficiently clear, the Court has to give effect to it, however, inequitable or unjust the result may be. The words, dura lex sed lex which mean the law is hard but it is the law. may be used to sum up the situation. Therefore, even if a statutory provision causes hardship to some people, it is not for the Court to amend the law. A legal enactment must be interpreted in its plain and literal sense, as that is the first principle of interpretation.25. In Mysore State Electricity Board v. Bangalore Woolen, Cotton & Silk Mills Ltd. & Ors., AIR 1963 SC 1128 , a Constitution Bench of this Court held that, inconvenience is not a decisive factor to be considered while interpreting a statute. In Martin Burn Ltd. v. The Corporation of Calcutta, AIR 1966 SC 529 , this Court, while dealing with the same issue observed as under:–A result flowing from a statutory provision is never an evil. A Court has no power to ignore that provision to relieve what it considers a distress resulting from its operation. A statute must of course be given effect to whether a Court likes the result or not. (See also: The Commissioner of Income Tax, West Bengal I, Calcutta v. M/s Vegetables Products Ltd., (1973) 1 SCC 442 ; and Tata Power Company Ltd. v. Reliance Energy Limited & Ors., (2009) 16 SCC 659 ).26. Therefore, it is evident that the hardship caused to an individual, cannot be a ground for not giving effective and grammatical meaning to every word of the provision, if the language used therein, is unequivocal.10.2 In the case of Raghunath Rai Bareja (supra), in paras 30 to 37, this Court observed and held as under :-30. Thus, in Madamanchi Ramappa & Anr. vs. Muthaluru Bojjappa, AIR 1963 SC 1633  (vide para 12) this Court observed:[W] what is administered in Courts is justice according to law, and considerations of fair play and equity however important they may be, must yield to clear and express provisions of the law31. In Council for Indian School Certificate Examination vs. Isha Mittal & Anr., 2000 (7) SCC 521 (vide para 4) this Court observed:Considerations of equity cannot prevail and do not permit a High Court to pass an order contrary to the law.32. Similarly in P.M. Latha & Anr. vs. State of Kerala & Ors. 2003(3) SCC 541 (vide para 13) this Court observed:13. Equity and law are twin brothers and law should be applied and interpreted equitably, but equity cannot override written or settled law. (Emphasis supplied)33. In Laxminarayan R. Bhattad & Ors. vs. State of Maharashtra & Anr. 2003(5) SCC 413 (vide para 73) this Court observed:73. It is now well settled that when there is a conflict between law and equity the former shall prevail.34. Similarly in Nasiruddin & Ors. vs. Sita Ram Agarwal, 2003(2) SCC 577 (vide para 35) this Court observed:35. In a case where the statutory provision is plain and unambiguous, the court shall not interpret the same in a different manner, only because of harsh consequences arising therefrom.35. Similarly in E. Palanisamy vs. Palanisamy (Dead) by Lrs. & Ors., 2003(1) SCC 123 (vide para 5) this Court observed:Equitable considerations have no place where the statute contained express provisions.36. In India House vs. Kishan N. Lalwani, 2003(9) SCC 393 (vide para 7) this Court held that:The period of limitation statutorily prescribed has to be strictly adhered to and cannot be relaxed or departed from by equitable considerations. (Emphasis supplied)37. In the present case, while equity is in favour of the respondent-Bank, the law is in favour of the appellant, since we are of the opinion that the impugned order of the High Court is clearly in violation of Section 31 of the RDB Act, and moreover the claim is time-barred in view of Article 136 of the Limitation Act read with Section 24 of the RDB Act. We cannot but comment that it is the Bank itself which is to blame because after its first Execution Petition was dismissed on 23.8.1990 it should have immediately thereafter filed a second Execution Petition, but instead it filed the second Execution Petition only in 1994 which was dismissed on 18.8.1994. Thereafter, again, the Bank waited for 5 years and it was only on 1.4.1999 that it filed its third Execution Petition. We fail to understand why the Bank waited from 1990 to 1994 and again from 1994 to 1999 in filing its Execution Petitions. Hence, it is the Bank which is responsible for not getting the decree executed well in time.In the case before this Court, the claim made by the Bank was found to be time barred and to that this Court observed that while the equity is in favour of the Bank, the law is not in favour of the borrower, however, since the claim is time barred, as the execution petition was barred by the limitation, this court set-aside as such the execution petition.10.3 In the case of Popat Bahiru Govardhane & Others (supra), this Court has observed and held that it is a settled legal position that the law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the Statute so prescribes. The Court has no power to extend the period of limitation on equitable grounds. It is further observed that the statutory provision may cause hardship or inconvenience to a particular party but the Court has no choice but to enforce it by giving full effect to the same.We are afraid what cannot be done directly considering the statutory provisions cannot be permitted to be done indirectly, while exercising the powers under Article 142 of the Constitution of India.11.1 At this stage, decision of this Court in the case of Oil & Natural Gas Corporation Limited (supra) is required to be referred to. Before this Court, the question was with respect to delay beyond 120 days in preferring the appeal under Section 125 of the Electricity Act and the question arose whether the delay beyond 120 days in preferring the appeal is condonable or not. After considering various earlier decisions of this Court on the point and considering the language used in Section 125 [2] of the Electricity Act which provided that delay beyond 120 days is not condonable, this Court has observed and held that it is not condonable and it cannot be condoned, even taking recourse to Article 142 of the Constitution. While observing and holding so in para-16, this Court has observed and held as under:-16. From the aforesaid decisions, it is clear as crystal that the Constitution Bench in Supreme Court Bar Association [AIR 1988 SC 1895] [Supra] has ruled that there is no conflict of opinion in Antulays case [AIR 1988 SC 1531 ] or in Union Carbide Corporations case with the principle set-down in Prem Chand Garg & Anr. v. Excise Commissioner, AIR 1963 SC 996 . Be it noted, when there is a statutory command by the legislation as regards limitation and there is the postulate that delay can be condoned for a further period not exceeding sixty days, needless to say, it is based on certain underlined, fundamental, general issues of public policy as has been held in Union Carbide Corporations case. As the pronouncement om Chhattisgarh State Electricity Board [AIR 2010 SC 2061 ] (Supra) lays down quite clearly that the policy behind the Act emphasizing on the constitution of a special adjudicatory forum, is meant to expeditiously decide the grievances of a person who may be aggrieved by an order of the adjudicatory officer or by an appropriate Commission. The Act is a special legislation within the meaning of Section 29 (2) of the Limitation Act and, therefore, the prescription with regard to the limitation has to be the binding effect and the same has to be followed regard being had to its mandatory nature. To put it in a different way, the prescription of limitation in a case of present nature, when the statute commands that this Court may condone the further delay not beyond 60 days, it would come within the ambit and sweep of the provisions and policy of legislation. It is equivalent to Section 3 of the Limitation Act. Therefore, it is uncondonable and it cannot be condoned taking recourse to Article 142 of the Constitution.11.2 In the case of Teri Oat Estates (P) Ltd. v. U.T. Chandigarh, reported in (2004) 2 SCC 130 , in paragraphs 36 & 37, it is observed as under:36. We have no doubt in our mind that sympathy or sentiment by itself cannot be a ground for passing an order in relation whereto the appellants miserably fail to establish a legal right. It is further trite that despite an extraordinary constitutional jurisdiction contained in Article 142 of the Constitution of India, this Court ordinarily would not pass an order which would be contravention of a statutory provision.37. As early as in 1911, Farwell, L.J. In Latham v. Richard Johnson & Nephew Ltd. (1911-12) All ER Rep 117 observed: (All ER p. 123E)We must be very careful not to allow our sympathy with the infant plaintiff to affect our judgment. Sentiment is a dangerous will o the wisp to take as a guide in the search for legal principlesThus, considering the statutory provisions which provide that delay beyond 15 days in preferring the appeal is uncondonable, the same cannot be condoned even in exercise of powers under Article 142 of the Constitution.12. In view of the afore-stated settled proposition of law and even considering the fact that even the certified copy of the order passed by the adjudicating authority was applied beyond the period of 30 days and as observed hereinabove there was a delay of 44 days in preferring the appeal which was beyond the period of 15 days which maximum could have been condoned and in view of specific statutory provision contained in Section 61(2) of the IB Code, it cannot be said that the NCLAT has committed any error in dismissing the appeal on the ground of limitation by observing that it has no jurisdiction and/or power to condone the delay exceeding 15 days.