Status as on- 25/01/2023
The Hon’ble National Company Law Appellate Tribunal (NCLAT), New Delhi bench in its recent order in the matter of Maharashtra State Electricity Distribution Company Ltd. v NRC Ltd. & Anr. has held that the Section 17(1) of Limitation Act, 1963 which deals with the period of limitation when fraud or mistake has been committed does not come into play when the specific limitation period is mentioned for an appeal in the present legislations.
Background:
National Rayon Corporation Ltd. (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (“CIRP”). On 13.03.2020 the Adjudicating Authority (NCLT) approved the Resolution Plan submitted by Adani Properties Pvt, Ltd. (“Successful Resolution Applicant”)
Maharashtra State Electricity Distribution Company Ltd. (“MSEDCL”) had submitted its claim towards electricity dues after the prescribed time of 90 days and thus, the Resolution Professional didn’t admit their claim and didn’t include it in the approved Resolution Plan either. Aggrieved by this decision, the MSEDCL approached the Appellate Tribunal, NCLAT, New Delhi on 22.11.2022, i.e., a delay of 244 days.
Argument by the Petitioner:
MSECL argued that it was only brought to their attention that the order needs to be challenged when the Successful Resolution Applicant filed a writ against the petitioner seeking directions for rejection of its claim. Hence, they claimed that the limitation period was extended in accordance with Section 17(1)(c) of the Limitation Act, 1963, which reads as follows:
Effect of fraud or mistake—
(1) Where, in the case of any suit or application for which a period of limitation is prescribed by this Act—
(a) the suit or application is based upon the fraud of the defendant or respondent or his agent; or
(b) the knowledge of the right or title on which a suit or application is founded is concealed by the fraud of any such person as aforesaid; or
(c) the suit or application is for relief from the consequences of a mistake; or
(d) where any document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him,
the period of limitation shall not begin to run until the plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence, have discovered it; or in the case of a concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production
NCLAT’s Verdict
The 2 judge’s Principal bench observed that Section 61 clearly specifies the limitation period of 30 days to file an appeal. Section 61(2) further makes way for the condonation of delaying the filing of such an application for another 15 days. Thus, since a specific limitation period for filing such an appeal is clearly mentioned, Section 17 of the Limitation Act could not be applied here. As a result, the condonation of delay application was not entertained in this matter and the Appeal was subsequently dismissed by the Hon’ble Tribunal.
Disclaimer: The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinions before relying upon the article. For more information, please contact us at ibc@centrik.in.
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