BKP Enterprise Vs. Air India Limited - It is not mandatory to file an application in writing before relief can be granted under Section 5 of the Limitation Act and the Tribunal may on its own condone the delay, if sufficient cause is demonstrated.

NCLT New Delhi-II (02.11.2021) In BKP Enterprise Vs. Air India Limited   [ IA-3425/2021 in IB No. 332/ND/2021] held that;

• it is not mandatory to file an application in writing before relief can be granted under Section 5 of the Limitation Act and the Tribunal may on its own condone the delay, if sufficient cause is demonstrated.

• wherein the Hon'ble High Court of Delhi observed that it is incumbent upon the revisionist/petitioner to show that he was prevented by some sufficient cause which resulted in delay in filing of the appeal.

• for the purpose of condonation of delay, there must be some cause which can be termed as “Sufficient Cause”……. There should be some extenuating circumstances justifying the condonation of delay under Section 5 of the Limitation Act. There must be some compelling reasons for the court to condone the delay.

• “The expression “sufficient cause” cannot be erased from Section 5 of the Limitation Act by adopting excessive liberal approach which would defeat the very purposes of Section 5 of the Limitation Act. There must be some cause which can be termed as a sufficient one for the purpose of delay in condonation….”

Excerpts of the order;

# 3. That this Application, filed under Section 9 of IBC, 2016, was listed for the first time before this Adjudicating Authority on 09.07.2021. That during the preliminary hearing on 09.07.2021, it was noticed that the Applicant has mentioned ‘the date of default’ as 11.03.2013 in the Part-IV of its Application, whereas the Application was filed on 30.06.2021. Therefore, the Applicant was advised to convince this Bench on the point of Limitation. That the Applicant was further directed to convince this Bench on the point of limitation and maintainability of the application. The matter was posted to 06.08.2021 for further hearing.

 

# 4. That on 06.08.2021, an Interlocutory Application registered as IA-3425 of 2021 filed by the Applicant for Condonation of delay under Section 5 of the Limitation Act came before this Bench. The Applicant was heard and directed to file a short-written synopsis referring to the page no.’s upon which the Applicant was placing reliance in terms of the provisions contained under Section 18 of the Limitation Act and the basis on which the Applicant submitted that the debt was acknowledged by the Competent Authority of the Respondent.

 

# 7. Since limitation is an issue in the petition herein, by filing IA-3425/2021, the Operational Creditor has admitted that the Petition has not been filed within 03 years for which it has filed the IA for condonation of delay. Therefore, we would like to examine whether there is any ground made out for condonation of delay by the Operational Creditor.

 

# 9. Further, the Operational Creditor has placed reliance on the Judgment of Hon’ble Supreme Court passed in the matter of Asset Reconstruction Company (India) Limited v. Bishal Jaiswal, reported in 2021 SCC OnLine SC 321, which is quoted below :

• “In an illuminating discussion on the reach of Section 18 of the Limitation Act, including the reach of the Explanation to the said Section, this Court, in Khan Bahadur Shapoor Fredoom Mazda v. Durga Prasad, (1962) 1 SCR 140 ["Shapoor Fredoom Mazda"], after referring to Section 19 of the Limitation Act, 1908, which corresponds to Section 18 of the 1963 Act, held:

• "... The statement on which a plea of acknowledgement is based must relate to a present subsisting liability though the exact nature or the specific character of the said liability may not be indicated in words. Words used in the acknowledgement must, however, indicate the existence of jural relationship between the parties such as that of debtor and creditor, and it must appear that the statement is made with the intention to admit such jural relationship. Such intention can be inferred by implication from the nature of the admission, and need not be expressed in words. If the statement is fairly clear then the intention to admit jural relationship may be implied from it. The admission in question need not be express but must be made in circumstances and in words from which the court can reasonably infer that the person making the admission intended to refer to a subsisting liability as at the date of the statement ...”

 

# 10. Additionally, it is stated by the Operational Creditor that the Hon’ble Supreme Court in the matter of Sesh Nath Singh and Anr. Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd. and Anr., reported in 2021 SCC OnLine SC 244, has held that it is not mandatory to file an application in writing before relief can be granted under Section 5 of the Limitation Act and the Tribunal may on its own condone the delay, if sufficient cause is demonstrated.

 

# 11. It is further submitted by the Operational Creditor that in view of the above, it has shown sufficient cause to this Tribunal to condone the delay as the Operational Creditor has been acting bona fide and delay in presenting the captioned petition was solely due to the reasons not attributable to the Operational Creditor. That the Tribunal may appreciate the fact that the Operational Creditor, even after being registered MSME, has been vigilantly fighting for its cause in order to receive the admitted outstanding sums from the Corporate Debtor from the year 2013 and whereas the acts of the Corporate Debtor, being a Union Government Company, have been in complete deviance with principles of fairness and suffers from the vice of arbitrariness.

 

# 12. After going through the submissions made by the Ld. Counsel and averments made in the IA-3425/2021, this Bench observes that the Operational Creditor has nowhere in its IA has specified/detailed the number of days’ of delay, which is prayed to be condoned.

 

# 13. Further, there is no specific averment made by the Applicant that as to what prevented the Operational Creditor to file the Section 9 application in time and what are the specific reasons along with the corresponding number of days of delay in filing the Petition. However, taking note of the Writ Petition filed by the Operational Creditor before the Hon’ble High Court of Delhi against the Corporate Debtor (as mentioned Supra as part of the list of Acknowledgement of Debt by the operational creditor), which was dismissed vide order dated 28.11.2018, we would like to dwell upon the time spent in the said Writ Petition/proceedings and examine whether that is a sufficient cause for condonation of the delay as prayed for.

 

# 14. That basing on the details of the Writ Petition W.P.(C) 5823/2018 titled as BKP Enterprise and Ors. Vs. Air India Limited as given in the Additional Affidavit dated 20.07.2021 filed in the present CP, we accessed the order dated 28.05.2018 passed in the aforesaid Writ Petition from the website of the Hon’ble Delhi High Court. From the order, we observe that the Operational Creditor had informed the Hon’ble High Court that “….the respondent has been served with the notice under the Insolvency & Bankruptcy Code, 2016”, which clearly demonstrates that the Operational Creditor had then attempted to initiate action against the Corporate Debtor under IBC during the pendency of the said Writ Petition. Therefore, in our considered view, the pendency of the said Writ Petition in Hon’ble Delhi High Court cannot be taken as a ground or a reason for delay in not filing the Petition before this Adjudicating Authority.

 

# 15. We further observe that the Operational Creditor has not given any specific reason/ground, which prevented him from filing the Section 9 petition under IBC before this Adjudicating Authority in the period between the date of dismissal of the said Writ Petition by Hon’ble Delhi High Court on 28.11.2018 and 15.03.2020, since when the Hon’ble Supreme Court enlarged the period of limitation in the Suo Motu Writ Petition (Civil) No. 3/2020.

 

# 16. That here, we would like to refer to the Judgement in the matter of Amardeep Vs State of Delhi & Anr., Crl. Revision Petition no. 573/14 decided on 14/01/2015, wherein the Hon'ble High Court of Delhi observed that it is incumbent upon the revisionist/petitioner to show that he was prevented by some sufficient cause which resulted in delay in filing of the appeal.

 

# 17. Further, in the matter of Inder Industries Vs. Gemco Electrical Industries, 147 (2008) DLT 305, it was observed by the Hon’ble High Court of Delhi that for the purpose of condonation of delay, there must be some cause which can be termed as “Sufficient Cause”……. There should be some extenuating circumstances justifying the condonation of delay under Section 5 of the Limitation Act. There must be some compelling reasons for the court to condone the delay. Similarly, Hon'ble High Court of Mumbai (Aurangabad Bench) in Writ Petition No. 2165/2006, titled as SOW, Kamalbai v. Ganpat, MANU/MH/0865/2006, has held that :

• “The expression “sufficient cause” cannot be erased from Section 5 of the Limitation Act by adopting excessive liberal approach which would defeat the very purposes of Section 5 of the Limitation Act. There must be some cause which can be termed as a sufficient one for the purpose of delay in condonation….”

 

# 18. In view of the aforesaid discussion, we conclude that the Operational Creditor has failed to demonstrate the “sufficient cause” for condoning the delay in filing the present IB petition, hence, we are not inclined to allow the Interlocutory Application. Accordingly, the IA-3425/2021 is dismissed.

 

# 19. The Petition IB-332/2021 is accordingly Dismissed being barred by limitation.

 

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