Logistical and Financial Difficulties Not Enough to Excuse 172-Day Delay in Refiling: NCLAT [Read Order]
NCLAT refuses to condone a 172-day refiling delay, ruling that logistical and financial difficulties were not valid grounds
Financial Difficulties
Financial Difficulties
The Principal New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) ruled that logistical and financial difficulties are not enough to excuse a 172-day delay in refiling an appeal.
Technio Business Solutions Private Limited filed an application praying for condonation of the delay in refiling. The appellant’s counsel argued that the delay was caused by logistical challenges in obtaining additional documents from its client in Dehradun, communication gaps, the need for further clarifications and approvals from the client, and the client’s financial difficulties.
The respondent did not appear.
The two-member bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) examined the records and heard the appellant’s counsel. The tribunal observed that defects in the appeal and interim applications had been pointed out by the Registry, and under NCLAT Rules, these defects should have been cured within seven days. Instead, they were cured after 172 days.
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The tribunal explained that multiple defects pointed out by the Registry are common and do not justify such a long delay.
Regarding the logistical difficulties, the tribunal observed that the locations of the client, the adjudicating authority, and the appellate authority were not unforeseen factors and could not be accepted as valid grounds. The tribunal pointed out that the order being appealed against was passed on 12 July 2024, and there was no clear explanation as to how these geographical issues actually delayed the refiling.
On the claim of financial hardship, the tribunal observed that no details were provided to explain how such hardship prevented the timely curing of defects. Without specific facts, the tribunal found this explanation vague and lacking in substance.
The tribunal ruled that the delay did not arise from circumstances beyond the appellant’s control but instead showed signs of disinterest, negligence, and lack of diligence. It stated that the Insolvency and Bankruptcy Code aims to ensure the timely resolution of cases, and permitting such a delay would undermine this objective.
Based on these findings, the tribunal rejected the application for condonation of delay and the memo of appeal and all other interim applications were also rejected.
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