CA Naren Sheth

The Appellant, in his status of a liquidator of M/s. Aster Private Limited, the Corporate Debtor, which is under liquidation, puts a partial challenge to the Impugned Order of 30.04.2024, as it was passed by the Ld. NCLT Hyderabad Bench in IA (IBC) 853/2024 as preferred in CP (IB) No. 199/7/HDB/2019. The issue involved herein is with regards to the denial of exclusion of the time period of 153 days, which has chanced owing to the operation of the Interim Order, which was passed by the Ld. NCLT for, which the Appellant contends that he cannot be attributed with any liability or a mistake, for delaying the liquidation proceedings in any manner whatsoever.

The appeal is accompanied with a Condone Delay Application, being IA No. 1237/2024, where the appellant has sought a condonation of 7 days of delay. After having gone through the reasons given in the Condone Delay Application, coupled with the fact that, the number of days of delay which has been sought to be condoned is falling well within the ambit of the proviso to Section 61(2), of I & B Code, would hereby stand condoned and accordingly IA No. 1237/2024, seeking ‘Condonation of Delay’ would hereby stand ‘disposed of’.

As agreed by the counsels of the respective parties, heard the Ld. Counsel for the Appellant on the merits of the appeal. The Ld. Counsel for the Appellant has submitted, that he has been appointed as a liquidator on 22.09.2021, with the initiation of the liquidation process of the Corporate Debtor, i.e. M/s. Aster Private Limited. He has stated that in the said case two interim orders of stay have been granted, one by the Hon’ble NCLAT and one by Ld. NCLT and the said orders were in operation for a total of 636 days, during which he could not proceed forward. Hence for the purposes of seeking its exclusion, he has preferred an interlocutory application being IA No. 853/2024 in CP (IB) No. 199/7/HDB/2019 before the Ld. NCLT praying for, that the aforesaid period of 636 days, which was inclusive of, the period of 153 days during which there operated a stay, granted by the Ld. NCLT on IA No. 1489/2023 with effect from 20.09.2023 to 20.02.2024, may be excluded from the total period during which he was expected to conclude the liquidation process. The said application came up for consideration before the Ld. Adjudicating Authority, and the Ld. Adjudicating Authority had passed the Impugned Order on 30.04.2024, granting the partial relief as prayed for, and ordered that the period of 483 days with effect from 28.10.2021 till 23.02.2023, during which the stay order granted by the Ld. NCLAT was in operation, will stand excluded from the period of liquidation.

But so far as the relief prayed for, the exclusion of 153 days from 20.09.2023 to 20.02.2024 during which the liquidation process could not be carried due to the stay order of Ld. NCLT, the same has been denied without assigning any reasons. After having heard the Ld. Counsel for the Appellant, we do not find any logical reasons, which have been assigned by the Ld. Tribunal while denying the said relief, which was prayed for in the IA No. 853/2024. We are of the view that liquidation process stood obstructed due to stay granted by the Ld. NCLT from the said 153 days from 20.09.2023 till 20.02.2024, and that it is not on account of any fault of the Appellant, and hence the Appellant cannot be attributed with for the said delay.

As the Ld. Adjudicating Authority while partially allowing the application i.e. IA No. 853/2024, denied the exclusion of 153 days, without assigning any justifiable reasons, as to what was the logic assigned to the denial, the Appeal would stand allowed and as a consequence thereto, the partial relief sought for is form of exclusion of 153 days from the liquidation period will be granted and the same would be treated to be excluded for the purposes of determining the total number of period of days taken for completion of the liquidation process. It is made clear that except for the part where the period of 153 days of delay was denied to be excluded for completing the liquidation process, we are not venturing into any other observation that has been made in the Impugned Order dated 30.04.2024. Accordingly, the ‘Appeal’ would stand partially allowed limited to the exclusion of 153 days only.