Routine Administrative Reasons Cannot Justify Delay: NCLAT Dismisses Kotak Mahindra Bank's Appeal

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has refused to condone a 112-day delay in re-filing an appeal by Kotak Mahindra Bank Ltd. in the insolvency proceedings of DBM Geotechnics & Construction Pvt. Ltd., holding that routine administrative processes cannot justify such a prolonged delay and dismissing the appeal itself.

A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra said the explanation offered by the bank reflected nothing more than generalised internal difficulties.

“In the present case, the explanation furnished by the Applicant is that their efforts were lost in a maze of generalised and routine internal administrative processes,” the tribunal observed.

Kotak had moved an interlocutory application seeking condonation of delay in re-filing its appeal after the Registry pointed out several defects in its initial filing.

According to the bank, the appeal contained voluminous annexures, including forensic audit material, minutes of Committee of Creditors meetings, correspondence exchanged during the corporate insolvency resolution process, and IBBI disciplinary orders. It said many of these documents were not clearly legible and required rescanning, retyping, and re-compilation.

The bank also cited difficulties in retrieving original records located in Mumbai, stating that they were not readily traceable and required coordination across departments. It further submitted that complying with procedural requirements such as re-pagination, restructuring the index, cross-referencing annexures, and preparing typed copies of lengthy records took considerable time despite its efforts.

On this basis, Kotak argued that the delay of 112 days in re-filing the appeal was unavoidable and deserved to be condoned in the interest of justice.

The respondents opposed the plea, contending that the reasons cited were vague, routine, and unsupported by any material. They pointed out that no defect sheet had been placed on record and no specific defects or steps taken to cure them had been disclosed.

They further argued that most of the documents relied upon by the bank were either electronic records or already available on record and therefore did not require any elaborate exercise of retrieval or reconstruction.

After hearing both sides, the tribunal held that the decisive factor in condonation of delay is not the length of delay but whether sufficient cause has been shown.

It noted that Kotak had failed to place on record any defect sheet, disclose the specific defects flagged by the Registry, or provide a date-wise account of steps taken to cure them. In the absence of such particulars, the tribunal said it was not possible to assess whether the delay was genuinely unavoidable.

“The Respondent is not off the mark in contending that the Appellant cannot seek condonation on the basis of a generalized plea of logistical inconvenience and related difficulties, particularly when the Appeal was already filed and what remained to be done was curing of defects. This cannot legitimately explain a delay of as many as 112 days to invoke our discretion in favour of the Applicant's plea for refiling delay condonation. We are, therefore, constrained to hold that the explanation offered is insufficient to warrant condonation of the delay,” the bench held.

The tribunal also found merit in the respondents' contention that most of the annexures were already available and that only a limited number of documents required retrieval, making the explanation for such a prolonged delay unreasonable.

It concluded that the explanation furnished by the bank was general in nature, unsupported by material particulars, and demonstrated a lack of due diligence, with the appellant remaining inactive and inert for substantial periods.

Kotak's reliance on the Supreme Court's ruling in Ramachandra Dallaram Choudhary vs Adani Infrastructure & Developers Pvt. Ltd. was also rejected. The tribunal noted that the Supreme Court itself had clarified that the judgment is not to be treated as a judicial precedent and that condonation of delay must be assessed on the facts of each case.

Finding that no unavoidable or exceptional circumstances had been shown to justify the delay, the NCLAT dismissed the application for condonation.

Consequently, the appeal itself was also rejected.