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In Re: Cognizance for Extension of Limitation

Citation

Date

Brief

REED 2021 SC 09011

Court

Supreme Court

Subject 

Suo Moto Cognizance for Extension of Limitation

September 22, 2021

Bench

N.A.

Applicable Law

Sections 23(4), 29A, Arbitration and Conciliation Act, 1996
Section 12A, Commercial Courts Act, 2015
Sections 138(b), 138(c), Negotiable Instruments Act, 1881

The Apex Court has recalled the suo motu order of April 27, 2021, which had extended with effect from March 14, 2021 the limitation period for filing of cases in view of the COVID second wave. The Court observed that the suo motu extension of limitation period will stand withdrawn with effect from 2 October 2021. The Supreme Court disposed the M.A. No.665 of 2021 with the following directions:
(I) In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 02.10.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2021, if any, shall become available with effect from 03.10.2021; (II) In cases where the limitation would have expired during the period between 15.03.2020 till 02.10.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03.10.2021. In the event the actual balance period of limitation remaining, with effect from 03.10.2021, is greater than 90 days, that longer period shall apply; (III) The period from 15.03.2020 till 02.10.2021 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings; (IV) The Government of India shall amend the guidelines for containment zones, to state. “Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements.”

In the Matter of: Sundaresh Bhat, Liquidator of ABG Shipyard Limited

Citation

Date

Brief

REED 2021 NCLAT Del 09545

Court

NCLAT

Subject 

Corporate Insolvency - Liquidation - Appeal filed by the Liquidator against the order of AA, by which the AA declined to give the benefits of provisions as per amended clause 12 of Schedule I of IBBI (Liquidation Process) Regulations, 2016

September 19, 2021

Bench

New Delhi

Applicable Law

Sections 7, 196, 196(1), 196(1)(p), 196(1)(t), 240, 241, Insolvency and Bankruptcy Code, 2016
Section 230, Companies Act, 2013
Regulation 32, Regulation 33, Schedule I(12), Schedule I(13), IBBI (Liquidation Process) Regulations, 2016
IBBI Circular dated 26.08.2019

Perusing the Liquidation Regulations and Clause 12 of Schedule I as was subsequently introduced on 25.07.2019, the substituted Regulation which has been brought by way of amendment does not show that the Regulation is to be applied only prospectively. It is open ended provision relating to procedural law which in no way states that it will not apply to pending liquidation processes on the date of substitution. The Circular dated 26.08.2019 could not interpret the Regulations in the manner it was done. Power of Board under Section 196(1) (p) or (t) to issue guidelines couldn't be expanded to interpreting provisions made. That is job of Courts to interpret and apply law. Reading the Regulation as amended the appellate Tribunal found it must be held to be applicable to liquidation process which were pending, and the provision can be applied considering stage of the process, irrespective of the date whether the liquidation process started before 25.07.2019 or on or after 25.07.2019 when Clause 12 Schedule I of the Regulations was substituted. This was not to say that sales already cancelled before 25.07.2019 for default of payment under earlier existing clause 12 can be reopened. Liquidators can rely on the amendment at the time of issue of Auction Notice being issued, irrespective of date of liquidation order of Adjudicating Authority. The Circular dated 26.08.2019, was not legally enforceable to interpret applicability. Such Circular cannot be in the nature of substituting existing Regulation in the name of guidelines. The guidelines which are inconsistent with the subordinate legislation would not be enforceable. If provision is clear, external aid, that too inconsistent, cannot be applied. The provision has to be enforced by Tribunal as it is. The AA in the impugned order had partly allowed the Application permitting prayer (iv) i.e. to sell by Private Sale. For the reasons mentioned above, the Appellate authority modified the order passed by the AA and held that the Appellant- Liquidator would be at liberty to apply and enforce amended Clause 12 of Schedule I of the Liquidation Regulations to the liquidation process even though initiated before 25.07.2019.

Jayesh N. Sanghrajka, Erstwhile R.P. of Ariisto Developers Pvt. Ltd. v. The Monitoring Agency nominated by the Committee of Creditors of Ariisto Developers Pvt. Ltd.

Citation

Date

Brief

REED 2021 NCLAT Del 09543

Court

NCLAT

Subject 

Corporate Insolvency - Appeal filed by the RP against the order of AA, wherein the AA disagreed with the CoC which has approved 'success fee' to the RP of an amount of Rs. 3 Crore

September 19, 2021

Bench

New Delhi

Applicable Law

Sections 5(13), 5(27), 22, 30(2), 196(109aa), 196(10(h), 196(1)(p), 206, 208(2), 208(2)(a), Insolvency and Bankruptcy Code, 2016
Regulations 31, 31(c), 34, 34A, IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

Although the fees of the valuer had been ratified by the CoC, in the facts of the matter where CIRP had been set aside, the Supreme Court held that the Adjudicating Authority has power to determine the amount payable to an expert valuer as an intrinsic part of the CIRP. The Learned Amicus Curiae has further rightly pointed out that the Appellant claiming that he had done excessively well to deserve Rs. 3 Crores of success fees, the Adjudicating Authority had made comments as to what was the scenario when it was supervising the CIRP. The Appellate authority considered the observations of the AA in impugned para 23 of the impugned order. The AA was at the ground level monitoring the progress of CIRP and its observations cannot be simply ignored. The Appellate Authority observed for the above reasons, the ‘success fees’ which was more in the nature of contingency and speculative is not part of the provisions of the IBC and the Regulations and the same was not chargeable. Apart from this, even if it was to be said that it was chargeable in the present matter, the manner in which, it was last minute pushed at the time of approval of the Resolution Plan and the quantum were both improper and incorrect. The argument that the AA should have sent the matter back to the CoC if it was not approving the success fee deserves to be discarded as the AA while not accepting the success fee merely asked proportionate distribution which would even otherwise have happened if “success fee” was set aside as the money would become available improving percentage of other creditors’ dues. For such reasons, the Appellate Tribunal did not find that there was any substance in the Appeal.

The Deputy Commissioner Division-VII, Central GST, Ahmedabad South v. Kiran Shah, Resolution Professional

Citation

Date

Brief

REED 2021 NCLAT Del 09527

Court

NCLAT

Subject 

Corporate Insolvency - Appellant aggrieved by the order of AA, preferred this Appeal under section 61(1)

September 15, 2021

Bench

New Delhi

Applicable Law

Sections 12, 15, 18, 21(1), 61(1), Insolvency and Bankruptcy Code, 2016
Regulations 6(2)(c), 12(2), IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016
Regulation 40, IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

Supreme Court has noted that the model timelines provided in Regulation 40A of the CIRP Regulations should be followed as closely as possible. In this case, on account of lockdown and pandemic the last date was extended from 31.03.2020 to 16.08.2020 to facilitate all creditors to file their claims. In the background of this factual matrix, the Appellate Authority held that the delay/latches are on behalf of the Appellant and there was no dereliction of duty on behalf of the IRP/PR as provided under Sections 18 and 21(1) of the Code.

Justice (Retd) Ashok Iqbal Singh Cheema v. Union of India and Others

Citation

Date

Brief

REED 2021 SC 09536

Court

Supreme Court

Subject 

Petition - Filed by the Officiating Chairperson, NCLAT to - Issue a Writ of Mandamus or in the nature of Mandamus or any other appropriate Writ - Directing the Respondent no.1 to include the period from 11.09.2021 to 20.09.2021 as part of continuous service of the Petitioner in terms of communication dated 16.07.2021 bearing no.A- 40012/1/2020 – Ad.IV (Annexure P/12) and pay all service benefits accordingly

September 15, 2021

Bench

N.A.

Applicable Law

During the course of hearing, learned Attorney General fairly stated that respondent No.1 – Union of India has no objection in accepting the prayer `C’ made by the petitioner Justice A.I.S. Cheema, in the present writ petition and to allow the petitioner to work upto 20.09.2021 as the Officiating Chairperson, National Company Law Appellate Tribunal, New Delhi to enable him to pronounce the judgments prepared by him. Learned Attorney General further submitted that after acceptance of the above-mentioned prayer ‘C’ made by the petitioner in the instant writ petition, consequential order will be passed by the respondents forthwith. It is also the submission of the learned Attorney General that respondent No.3 will proceed on leave upto 20.09.2021. Taking note of the submissions advanced by the learned Attorney General for India, the writ petition was disposed of in the above terms.

Assets Reconstruction Company (India) Limited v. Tulip Star Hotels Limited and Others

Citation

Date

Brief

REED 2021 SC 09537

Court

Supreme Court

Subject 

September 15, 2021

Bench

N.A.

Applicable Law

Upon hearing the counsel the Supreme Court directed, "No further adjournments shall be granted under any circumstances."

CFM Asset Reconstruction Private Limited v. Unison Hotels Private Limited and Others

Citation

Date

Brief

REED 2021 Tel 09539

Court

High Court

Subject 

Corporate Insolvency - Petition u/s 151 of CPC praying to suspend the order
of the NCLT pending disposal WP No. 22667 of 2021, on the file of the High Court

September 15, 2021

Bench

Telangana

Applicable Law

Section 151, Code of Civil Procedure, 1908

The High Court observed that, "It is settled principle that 'justice should not only be done, but it must be seen to be done' and since prima facie it does not appear so in this case, there shall be interim suspension as prayed for."

K.N. Rajakumar v. V. Nagarajan and Others

Citation

Date

Brief

REED 2021 SC 09525

Court

Supreme Court

Subject 

Corporate Insolvency - Appellant challenged the NCLT order of admitting Application and direction to RP to convene a meeting of CoC consisting of members, who constituted CoC originally in the year 2017 - NCLAT dismissed the Appeal - Appellant challenged the NCLAT Appeal in Supreme Court through this Appeal

September 14, 2021

Bench

N.A.

Applicable Law

Section 271(1)(a), Companies Act, 2013
Sections 7, 8, 8(1), 9, 10, 12A, 24(6), 25(2)(e), Insolvency and Bankruptcy Code, 2016
Regulation 16, IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016

One of the principal objects of IBC is, providing for revival of the Corporate Debtor and to make it a going concern. Every attempt has to be first made to revive the concern and make it a going concern, liquidation being the last resort.

In the Matter of: GCCL Infrastructure and Projects Limited

Citation

Date

Brief

REED 2021 NCLT Amd 09524

Court

NCLT

Subject 

Pre-packaged Insolvency Resolution Process - Corporate Debtor filed Application u/s 54A to initiate Pre-packaged IRP

September 13, 2021

Bench

Ahmedabad

Applicable Law

Sections 14, 14(1), 19(2), 29A, 54A, 54A(1), 54A(2)(d), 54A(2)(e), 54A(2)(f), 54A(2)(g), 54A(3), 54B(1)(a), 54C, 54C(3)(b), 54C(3)(c), 54F, 54F(5), 54H, 54H(b), 54H(c), 54J, (Insolvency and Bankruptcy Code, 2016
Regulations 14(5), 16(2), IBBI (Pre-packaged IRP) Regulation, 2021

The Corporate Debtor was a MSME and the requisite certificate was annexed. The Corporate Debtor was eligible to file this application as per the Section 54A(l) of the Code. A Special Resolution by the members of the Corporate Debtor to initiate the Pre-Packaged Insolvency Resolution Process (PPIRP) u/s 54A(2)(g) of the Code was passed. The Financial Creditor approved the decision of the directors to file the application as contemplated under Section 54A(3) of the Code and appointed the RP to conduct PPRIP and to discharge duties before initiation of PPIRP. The declaration regarding existence of avoidance of transactions relating to the company-and its directors as per Section 54C(3)(c) of the Code read with Regulation 16(2) of IBBI (Pre-packaged IRP) Regulation, 2021, was produced. Affidavit of the Corporate· Debtor regarding its eligibility under Section 29A of the Code to submit Resolution Plan has been filed. Thus, the provisions of Section 54A(2)(d) of the Code were complied with. On perusal of the proceedings, the Adjudicating Authority found that the Corporate Debtor has produced all the required documents and materials in order to comply the provisions of Law making this application liable to be admitted under Section 54A of the Code to initiate PPIRP.

National Spot Exchange Limited v. Anil Kohli, Resolution Professional for
Dunar Foods Limited

Citation

Date

Brief

REED 2021 SC 09526

Court

Supreme Court

Subject 

Corporate Insolvency - Condonation of Delay - Appellant aggrieved and dissatisfied with the NCLT order preferred this Appeal

September 13, 2021

Bench

N.A.

Applicable Law

Sections 7, 61(2), Insolvency and Bankruptcy Code, 2016
Sections 4, 5, 12, 29(2), Limitation Act, 1963
Section 50, PML Act, 2002
Section 125, Electricity Act, 2003
Section 34, Arbitration and Conciliation Act, 1996
Section 27, Forward Contracts (Regulation) Act, 1952
Section 13(2)(a), Consumer Protection Act, 1986
Article 142, Constitution of India, 1950

Considering the statutory provisions which provide that delay beyond 15 days in preferring the appeal is uncondonable, the same cannot be condoned even in exercise of powers under Article 142 of the Constitution. In view of the afore-stated settled proposition of law and even considering the fact that even the certified copy of the order passed by the adjudicating authority was applied beyond the period of 30 days and as observed hereinabove there was a delay of 44 days in preferring the appeal which was beyond the period of 15 days which maximum could have been condoned and in view of specific statutory provision contained in Section 61(2) of the IBC, it cannot be said that the NCLAT has committed any error in dismissing the appeal on the ground of limitation by observing that it has no jurisdiction and/or power to condone the delay exceeding 15 days.