NCLAT stresses the importance of a timeline
NCLAT stresses the importance of a timeline
The bench dismisses the appeal due to the lackadaisical approach of the petitioner
The Chennai Bench of the National Company Law Appellate Tribunal (NCLAT) has reiterated the importance of adhering to timelines under the Insolvency & Bankruptcy Code (IBC), 2016.
The bench of Justice M Venugopal and Justice Kanthi Narahari stated, "In IBC, 'speed' is the essence. The 'time wasted' or 'lost' cannot be revisited or regained. Also, the process of liquidation is time-bound, to be completed within one year. Undoubtedly, IBC is inbuilt and self-contained and its objective is that a time-barred 'debt' cannot be resurrected or given a fresh tenure of life."
The tribunal, while rejecting a condonation of a delayed appeal, held, "Just because the appellant is a statutory organization, no 'indulgence' or 'latitude' can be shown since the 'law' applies to one and all in a level playing field."
The appellant's grievance was that the corporate debtor had failed to remit the employees' contribution to the Employees Provident Fund (EPF), amounting to over Rs.1.17 crores. The respondent company went into liquidation, after which the appellant sent repeated communications to the Resolution Professional informing him of the employees' due amount.
It was contended that the EPF amount was not an asset of the operational creditor but was an asset of the employees. Hence, it could not be included in the liquidation assets and could not be used for recovery in terms of the liquidation. The amount due to the Employees Provident Fund Organization was exempted under IBC.
However, the National Company Law Tribunal (NCLT) dismissed the appellant's plea on grounds of delay.
The appellant then filed an appeal before the NCLAT against the decision of NCLT after a delay of 116 days. The ground of the appeal was that NCLT did not provide the appellant a proper opportunity of being heard.
Seeking condonation of the delay, the appellant submitted that being a government organization, it catered to workmen's interests in line with the larger public interest. If the delay was not condoned, it would suffer irreparable loss and hardship.
The bench noted that a tribunal or court would be reluctant to excuse the delay on the part of a litigant who was guilty of inaction or negligence.
Thus, NCLAT ruled, "An unpardonable lackadaisical approach/attitude of the 'party' in pursuing a matter before the tribunal is not acceptable. The 'law of limitation' being harsh, will affect a 'litigant' but it must be pressed into service with all its vigor and rigor."
After evaluating the facts and circumstances of the case, the bench upheld the NCLT order and dismissed the appeal.
