SC says no power to condone delay in NSEL appeal

By: |
September 15, 2021 2:23 AM

A Bench led by Justice MR Shah said Parliament has not carved out any exception to a situation where limitation to file an appeal beyond a statutory period could be condoned.

It also said that NCLAT has no jurisdiction and/or power to condone the delay exceeding 15 days.It also said that NCLAT has no jurisdiction and/or power to condone the delay exceeding 15 days.

Dismissing the National Spot Exchange’s (NSEL) plea to condone the delay in filing its appeal against rejection of its claim for Rs 673.85 crore from the debt-laden Dunar Foods, the Supreme Court on Tuesday said courts have no power to do so, as it would amount to legislation.

A Bench led by Justice MR Shah said Parliament has not carved out any exception to a situation where limitation to file an appeal beyond a statutory period could be condoned.

It said there may be situations where a party may have genuine reasons like illness/ accident and is not in a position to file an appeal within the statutory period of limitation, and even within the extended maximum period of appeal which could be condoned.

“… it may cause hardship, however, unless Parliament has carved out any exception by a provision of law, the period of limitation has to be given effect to. Such powers are only with the Parliament and the legislature. The courts have no jurisdiction and/or authority to carve out any exception. If the courts carve out an exception, it would amount to legislate which would in turn might be inserting the provision to the statute, which is not permissible,” the apex court said.

Rejecting the NSEL’s plea for condonation of delay on the ground that the amount involved is huge, the top court said, “… 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.”

It also said that NCLAT has no jurisdiction and/or power to condone the delay exceeding 15 days.

In this case, NSEL had preferred an appeal before the NCLAT after a delay of 44 days, which was beyond the maximum 15 days period that could be condoned under Section 61(2) of the IBC. The appellate tribunal had dismissed the appeal on the ground of limitation by observing that it has no jurisdiction and/or power to condone the delay exceeding 15 days.

The NCLT had admitted SBI’s plea for initiating the insolvency proceedings against Dunar Foods on the ground that the corporate debtor had taken credit limits by hypothecating the commodities kept in the warehouses of NSEL.

In response to the public announcement by the Interim Resolution Professional (IRP) for inviting claims from creditors, NSEL had submitted a claim of `673.85 crore. Besides, it had informed the IRP about a decree that was passed against PD Agro for Rs 633.66 crore as the ED had found that Rs 744 crore had been siphoned off by PD Agro Processors to Dunar Foods.

The IRP had rejected the NSEL’s claim on the ground that there was no privity of contract between the spot exchange and Dunar Foods. The NCLT had upheld the IRP’s decision not to include the claim of the appellant as a creditor. NSEL had then filed an appeal before the NCLAT after a delay of 44 days.

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