NCLAT: Tribunal is to assess the 'due diligence' of parties craving for condonation of delayThe National Company Law Appellate Tribunal (NCLAT) has allowed the Appeal filed by M/s ArihantUnitech Realty Projects Limited(Appellant/Petitioner/Transferor Company),in respect of the order passed by the National Company Law Tribunal, Division Bench-I, Chennai which had dismissed the petition...
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NCLAT: Tribunal is to assess the 'due diligence' of parties craving for condonation of delay
The National Company Law Appellate Tribunal (NCLAT) has allowed the Appeal filed by M/s ArihantUnitech Realty Projects Limited(Appellant/Petitioner/Transferor Company),in respect of the order passed by the National Company Law Tribunal, Division Bench-I, Chennai which had dismissed the petition for condonation of delay of 201 days filed by the Appellant.
Assailing the validity, correctness and legality of the impugned order passed by the Tribunal, the Appellant submitted that the Scheme of Amalgamation is in the final stage of consideration and if such delay was not condoned, it would cause a significant adverse impact on the business operations of the Transferor as well as the Transferee Company.
The prime plea of the Appellant was that the 'Scheme of Amalgamation' was formulated in the best interest of the Shareholders, Employees, Creditors and other Stakeholders of the Companies and as a result thereof, they should not be deprived of the benefits under the scheme, if the delay in filing the petition was not condoned.
It was also submitted that the Tribunal had failed to appreciate the fact that the period of delay cannot be construed to measure the negligence on the part of the Appellant for the purpose of condoning the delay. Moreover, the Appellant was not inactive and was not negligent in taking steps for filing the Application for sanctioning of Scheme of Amalgamation. That apart, there was no gross negligence on the part of the Appellant in filing the Petition before the Tribunal.
The Appellate Tribunal observed that as regards the aspect of Condonation of Delay, the Tribunal is to adopt/take lenient/liberal view of course, based on the facts and circumstances of given case. Further, the very approach of the Tribunal ought to be pragmatic and justice oriented.
Further, the Tribunal is to assess the 'due diligence' of parties craving for condonation. In fact, failure to adopt/resort to vigilance or extra vigilance by the concerned party ought not to be a ground for ousting it from Litigation.
As far as the present case is concerned, the Appellant Company's main prayer was for the condonation of delay of 201 days in filing the connected Company Petition and in the Application it had come out with reasons that the delay in filing the Company Petition was not an act wantonly and that the delay was due to their pre-occupation with internal compliance and closure of audit/accounts.
The Tribunal held that the aforementioned reasons ascribed by the Appellant Company did not smack of mala fide. Viewed in that perspective, the observation of the NCLT, Division Bench-I, Chennai in the impugned order, to the effect that the 'Perusal of the circumstances resulting in the delay in filing the Company Petition had failed to clearly explain the delay caused in filing of the Petition' etc. and finally dismissing the Application/Petition was clearly unsustainable in the eye of Law.
Therefore, this Tribunal, to prevent an aberration of justice and to secure the ends of justice interfered with the impugned order passed by the NCLT, Division Bench -I, Chennai and allowed the instant Appeal by condoning the delay in question.
A direction was also given to the Appellant to file the certified copy of the impugned order dated 13.02.2020 of the NCLT, Division Bench -I, Chennai within three weeks from the date of this Judgement.