SESH NATH SINGH & ANR. versus BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK LTD. AND ANR.

Citation: [2021] 3 S.C.R. 806 · Decided: 22-03-2021 · Supreme Court of India · Bench: INDIRA BANERJEE · Disposal: Dismissed

Cited by 4 judgment(s) · cites 10 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 3 S.C.R.
   [2021] 3 S.C.R. 806
806
SESH NATH SINGH & ANR.
v.
BAIDYABATI SHEORAPHULI CO-OPERATIVE BANK
LTD. AND ANR.
(Civil Appeal No. 9198 of 2019)
MARCH 22, 2021
[INDIRA BANERJEE AND HEMANT GUPTA, JJ.]
Insolvency and Bankruptcy Code, 2016: Object and Reasons
of the enactment of the Code – Held : Is to consolidate and amend
the laws relating to reorganisation and insolvency resolution of
corporate persons, partnership firms and individuals in a time bound
manner, for maximization of the value of the assets of such persons,
to promote entrepreneurship, availability of credit and to balance
the interest of all the stakeholders.
Insolvency and Bankruptcy Code, 2016: s.7 – Application
under – When any corporate debtor commits a default, a financial
creditor, an operational creditor or the corporate debtor itself may
initiate corporate insolvency resolution process in respect of such
corporate debtor, in such manner as provided in Chapter II of the
IBC – A financial creditor may either by itself or jointly with other
financial creditors, as may be notified by the Government, file an
application for initiation of the corporate insolvency resolution
process against a corporate debtor before the Adjudicating
Authority, when a default has occurred – The trigger point for an
application under s.7 of the IBC is the occurrence of a default.
Insolvency and Bankruptcy Code, 2016: Applicability of
Limitation Act to application made under the Code before the NCLT
– Held: There is no specific period of limitation prescribed in the
Limitation Act, 1963 for an application under the IBC before the
NCLT – An application for which no period of limitation is provided
anywhere else in the Schedule, is governed by Art.137 of the Schedule
to the Limitation Act – Under Art.137 of the Schedule to the
Limitation Act, the period of limitation prescribed for such an
application is three years from the date of accrual of the right to
apply – Limitation Act, 1963 – Art.137.
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Limitation Act, 1963: s.5 – Delay in filing appeal/any
application – s.5 of the Limitation Act provides that any appeal or
any application, other than an application under any of the
provisions of Order XXI of the Code of Civil Procedure, 1908, may
be admitted after the prescribed period of limitation, if the appellant
or the applicant satisfies the Court, that he had sufficient cause for
not preferring the appeal or making the application within such
period – Explanation in s.5 of the Limitation Act clarifies that, the
fact that the appellant or the applicant may have been misled by
any order, practice or judgment of the High Court in ascertaining
or computing the prescribed period, may be sufficient cause within
the meaning of this Section.
Limitation Act, 1963: s.5 – Condonation of delay in filing an
application or appeal – The condition precedent for condonation
of the delay in filing an application or appeal, is the existence of
sufficient cause – Whether the explanation furnished for the delay
would constitute ‘sufficient cause’ or not would depend upon facts
of each case – There cannot be any straight jacket formula for
accepting or rejecting the explanation furnished by the applicant/
appellant for the delay in taking steps – Acceptance of explanation
furnished should be the rule and refusal an exception, when no
negligence or inaction or want of bona fides can be imputed to the
defaulting party.
Limitation Act, 1963: s.5 – Requirement to file application,
not mandatory – s.5 of the Limitation Act does not speak of any
application – Although, it is the general practice to make a formal
application under s.5, in order to enable the Court or Tribunal to
weigh the sufficiency of the cause for the inability of the appellant/
applicant to approach the Court/Tribunal within the time prescribed
by limitation, there is no bar to exercise by the Court/Tribunal of its
discretion to condone delay, in the absence of a formal application
– A plain reading of s.5 makes it amply clear that it is not mandatory
to file an application in writing before relief can be granted under
the said section – Had such an application been mandatory, s.5 of
the Limitation Act would have expressly provided so.
Limitation Act, 1963: s.14(2) – Exclusion of period for
commutation of limitation period – Held: In computing the period
of limitation for any application, the time during which the petitioner
SESH NATH SINGH  v. BAIDYABATI SHEO

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