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Judgment
O R D E R
28.02.2023: This is an application praying for condonation of 493 days delay in filing the appeal. This appeal has been filed against the order passed by the Adjudicating Authority dated 31st August, 2021 in an application filed under Section 60(5) by the Respondent No.1. This Appeal has been filed in this Tribunal on 05.02.2023 challenging the order dated 31.08.2021.
Learned Sr. Counsel for the Appellant submits that the period of moratorium during which the Appellant was under moratorium i.e. 15.01.2020 to 23.12.2022 has to be excluded giving the benefit of under Section 60(6) of the ‘Insolvency and Bankruptcy Code, 2016’ (hereinafter referred as to ‘the Code’).
Learned Sr. Counsel for the Appellant submits that the Corporate Insolvency Resolution Process (hereinafter referred as to ‘CIRP’) was initiated in CP (IB) No.563 of 2018 against M/s.E-Complex Pvt Ltd, a subsidiary of the Appellant.
Learned Sr. Counsel for the Appellant in support of the submission submits that the period from 15.01.2020 till 23.12.2022 when the Appellant was in CIRP, should be excluded from the period of limitation for filing this appeal.
Learned Sr. Counsel for the Appellant in support of the submission, has relied upon the judgment of Hon’ble Supreme Court in ‘New Delhi Municipal Council Vs. Minosha India Limited’1 as well as judgment of this Tribunal in ‘Company Appeal (AT) (Ins) No. 240 of 2022’ decided on 16.09.2022.
The order dated 31.08.2021 was passed on the application of Respondent No.1 where the Adjudicating Authority has directed the claim of Respondent No.1, has to be accepted. It is submitted that limitation in filing the appeal under Section 61 of the Code need to be extended for the aforesaid period. Hence, the appeal is within time.
Section 61 (1)&(2) of the Code provides for limitation for filing an appeal. Section 61 (1)&(2) of the Code is as follows:
“61.(1) Notwithstanding anything to the contrary contained under the Companies Act 2013, any person aggrieved by the order of the Adjudicating Authority under this part may prefer an appeal to the National Company Law Appellate Tribunal.
(2)Every appeal under sub-section (1) shall be filed within thirty days1 before the National Company Law Appellate Tribunal Provided that the National Company Law Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days.”
Against the order passed by the Adjudicating Authority dated 31.08.2021 which is sought to be appealed in the present appeal ‘any person aggrieved has right to file an appeal within 30 days’. Admittedly, no appeal was filed by the Appellant within 30 days and this appeal has been filed with delay of 493 days. The submission which has been placed by the Appellant is on the basis of Section 60 sub-Section 6 of the Code which provides as follows:
“60 (6) Notwithstanding anything contained in the Limitation Act, 1963 or in any other law for the time being in force, in computing the period of limitation specified for any suit or application by or against a corporate debtor for which an order of moratorium has been made under this Part, the period during which such moratorium is in place shall be excluded.”
Section 60 sub-Section 6 of the Code has been enacted in the Code for a purpose and object. The benefit of limitation has been extended for any suit or application by or against a Corporate Debtor for which an order of moratorium has been made to enable the Corporate Debtor to prosecute any proceeding or any proceeding to be prosecuted against the Corporate Debtor giving the benefit of the period of moratorium for a specific purpose and object. The Object is to protect the Corporate Debtor who is unable to institute proceedings during the moratorium period and object is also to protect those who want to initiate action against the Corporate Debtor who are unable to initiate action due to moratorium. The present is a case of limitation for filing an appeal under Section 61 of the Code which is 30 days from order of the Adjudicating Authority. The order passed by the Adjudicating Authority dated 31.08.2021 could have been appealed within 30 days and the benefit of Section 60(6) of the Code which is sought to be claimed in the present case is not applicable nor the Appellant can claim that in the period of limitation for filing the appeal, this period should be added.
The Judgment of the Hon’ble Supreme Court on which reliance has been placed i.e. ‘New Delhi Municipal Council’ (supra) was a case where the proceedings were initiated under Section 11(6) of the ‘Arbitration and Conciliation Act, 1996’ and the benefit under Section 60(6) of the Code was sought to be claimed. Facts of such case has been noticed in para 2 of the judgment which reads thus:
“2.Pursuant to an agreement dated 20.02.2015, the appellant placed a purchase order of Rs.16,20,00,000/- with the respondent. The appellant, however, issued a termination notice to the respondent on account of its alleged inaction and conduct which is described as non-responsive. This led to the respondent approaching the High Court of Delhi which finally culminated in a direction by the High Court to afford an opportunity of hearing to the respondent and to consider its representation. The appellant, however, rejected the representation by communication dated 17.05.2016. Invoking the provision in the contract providing for arbitration, the respondent addressed communication dated 07.06.2016. The appellant sent its reply on 20.7.2016 where it, inter alia, did not consent for either of the names suggested by the respondent and instead proposed to proceed for arbitration through the Delhi International Arbitration Centre (DIAC). On 14.5.2018 the National Company Law Tribunal (NCLT) Mumbai admitted an application under Section 10 of the IBC and declared the moratorium. On 28.11.2019, a resolution plan was approved by the NCLT. On 25.11.2020, the respondent filed an application under Section 11(6) of the 1996 Act.”
The Hon’ble Supreme Court after considering the Section 60(6) of the Code laid down following in paragraphs 32, 34 & 35:
“32.As far as understanding the meaning of Section 60(6) is concerned, there cannot be a slightest doubt that the period of Moratorium is excluded even in the case of a suit or application brought by a corporate debtor, viz., in regard to the period of the moratorium. It is true that on the one hand what is tabooed in Section 14 when a Moratorium is put into place is inter alia the institution of suits or continuance of pending suits or proceedings against the corporate debtor including proceeding in execution of inter alia, the decree or order of an arbitration panel. So, also the provision prohibits any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002. Still further, the recovery of any property by an owner or lessor in the occupation of the corporate debtor is forbidden. These provisions do not in any manner appear to stand in the way of the corporate debtor instituting or proceeding with a suit or a proceeding against others. Section 60(6) on the other hand excludes the period during which the Moratorium under Section 14 is in place in computing the period of limitation. An ambiguity is introduced, namely the need to exclude the period of limitation for a suit or an application, at the instance of the corporate debtor when a Moratorium ushered in by an order under Section 14 does not pose any bar against a suit or an application at the instance of the corporate debtor. The words for which an order of Moratorium has been made under this part is intended to be the point of reference or the premise for the exclusion of the time for the purpose of computing the period of limitation. Besides being the point of reference and being the sine qua non for applying Section 60(6), it also specifies the period of time which will be excluded in computing of the period of limitation. In other words, present an order of Moratorium under Section 14, the entire period of the Moratorium is liable to be excluded in computing the period of limitation even in a suit or an application by a corporate debtor.
34.In other words, notwithstanding the period of limitation under the Limitation Act, the Law Giver has thought it fit to provide that in respect of a corporate debtor if there has been an order of moratorium made in Part II, the period during which such moratorium was in place shall be excluded. ‘For which an order of moratorium’ cannot bear the interpretation which is sought to be placed by the appellant. The interpretation placed by the appellant is clearly against the plain meaning of the words which have been used. We have already undertaken the task of understanding the purport of the Code and the context in which section 60(6) has been put in place. This Court cannot possibly sit in judgment over the wisdom of the Law Giver. The period of limitation is provided under the Limitation Act. The law giver has contemplated that when a moratorium has been put in place, the said period must be excluded. We cannot overlook also the employment of words ‘any suit or application’. This is apart, no doubt, from the words ‘by a corporate debtor’. Interpreting the statute in the manner which the appellant seeks would result in our denying the benefit of extending the period of limitation to the corporate debtor, a result, which we think, would not be warranted by the clear words used in the statute.
35.Therefore, we are of the view that section 60(6) of the IBC does contemplate exclusion of the entire period during which the moratorium was in force in respect of corporate debtor in regard to a proceeding as contemplated therein at the hands of the corporate debtor.”
The case before the Hon’ble Supreme Court was a case where a benefit of Section 60(6) was extended to the Corporate Debtor and the Resolution Applicant in respect to the proceedings under the Arbitration and Conciliation Act, 1996. The case before the Hon’ble Supreme Court was not a case for limitation for filing an appeal under Section 61 of the Code and the Court was concerned with the benefit of Section 60(6) of the Code in proceedings under 1996 Act.
The present appeal is filed under section 61(1) of the Code with delay of 493 days. Our jurisdiction to condone the delay under Section 61(2) of the Code proviso is only 15 days. We are thus unable to condone the delay of 493 days in filing the appeal. The Application for condonation of delay is dismissed. Consequently, memo of appeal is rejected. No order as to costs.
Footnotes
- 1.(2022) 8 SCC 384