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Judgment
O R D E R
05.05.2022: I.A. No. 2812 of 2021 has been filed by the Appellant in CA (AT) (Ins) No. 842 of 2021 under Rule 31 and Rule 11 of the NCLAT, Rules, 2016 for condoning the delay of 536 days in filing the Appeal.
In this Appeal, the Appellant has challenged the order dated 17.03.2020 passed by the Ld. Adjudicating Authority (NCLT, Ahmadabad Bench, Ahmadabad) in I.A. No. 91 of 2020 in CP (IB) No. 188/NCLT/AHM/2019.
Heard Ld. Counsel for the Appellant and Respondents.
The Appellant has filed the I.A. No. 2812 of 2021 with a prayer which is as under:-
“c)The Applicant submits that the matter was next listed for hearing on 18.11.2021. The learned counsel appearing for the applicant submitted that the order of the Adjudicating Authority impugned in the appeal is dated 17.03.2020. The order passed by the Hon’ble Supreme Court in Suo Motu Writ Petition (Civil) No(s) 3 of 2020 was placed for perusal of the Hon’ble Appellate Tribunal, wherein it has been ordered that period of limitation shall stand suspended with effect from 15.03.2020. It was submitted that in view of the order of the Hon’ble Supreme Court suspending the period of limitation with effect from 15.03.2020 and the impugned order having been passed on 17.03.2020, the period of limitation for filing appeal had actually not begun to run and in that context the ratio of decision in the case of V Nagarajan Versus SKS Ispat and Power Ltd. & Ors. shall have no application to the facts of the present case.
d)Considering these submissions this Hon’ble Appellate Tribunal by order dated 18.11.2021 directed the applicant to place on record orders passed by the Hon’ble Supreme Court in Suo Motu Writ Petition (Civil) No(s) 3 of 2020 and file a formal application for condonation of delay, if any.
e)The applicant submits that the Hon’ble Supreme Court to obviate the difficulty faced by litigants in filing the applications/appeals within the period of limitation on account of outbreak of COVID-19 Coronavirus passed an order on 23.03.2020 in Suo Motu Writ Petition (Civil) No(s) 3 of 2020 declaring that “period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s”. The said order was again continued by order dated 27.04.2021. By virtue of the order of the Supreme Court, the limitation period stood extended with effect from 15.03.2020. since the impugned order has been passed during the period of suspension of limitation, the benefit of orders passed by the Hon’ble Apex Court would accrue to the applicant. Copy of order dated 23.03.2020 and 27.04.2021 passed in Suo Motu Writ Petition (Civil) No(s) 3 of 2020is annexed herewith and marked as Annexure A-1 (colly). f) The applicant submits that in view of the order of the Hon’ble Supreme Court suspending the operation of period of limitation in filing appeal, the present appeal filed before this Hon’ble Appellate Tribunal is within time, and does not suffer from any delay which can be said to be fatal for consideration of the appeal. The applicant submits that as such the appeal is within time, as per the order of the Hon’ble Supreme Court of India. Without prejudice, it is submitted that since the appeal has been filed beyond the period of 30 days prescribed in the Code for filing of appeal, a formal application is being moved praying for formal condonation of delay in preferring the appeal.”
Ld. Counsel for the Appellant also referred to pg. 10 of the I.A. in which the Hon’ble Supreme Court has passed the orders in Miscellaneous Application No. 665 of 2021 in Suo Motu Writ Petition (C) No. 3 of 2020.
With the aforesaid, the Ld. Counsel for the Appellant submits that the delay may be condoned in filing the Appeal.
Ld. Counsel for the Respondent No. 1 and 2 has referred to in his reply affidavit at Para 4 (i) (ii) (iii) (iv) which are as under:-
“i)The Hon’ble Supreme Court in catena of judgments was plased to hold that time is of the essence under the IBC. See Ebix Singapore Private Limited versus Committee of Creditors of Educomp Solutions Limited [2021 SCC Online SC 707]. In Mobilox Inovations Private Ltd. Vs. Kirusa Software Private Ltd. [2018 1 SCC 253], the Hon’ble Supreme Court observed, in the context of appeals, that timelines are sacrosanct under the IBC as it is in the best interest of all the stakeholders of the process that resolution or liquidation of the company happens in a time-bound manner and is not protracted;
ii) The law on limitation with respect to IBC is settled and emphatic in its denunciation of delays. The power to condone delay is tightly circumscribed and conditional upon showing sufficient cause, even within the period of delay which is capable of being condoned. The IBC is a watershed legislation which seeks to overhaul the previous bankruptcy regime which was afflicted by delays and indefinite legal proceedings. The IBC sought to structure and streamline the entire process of insolvency, right from the initiation of insolvency to liquidation, as a one stop mechanism. Section 12 (3) of the IBC prescribes a strict timeline for the completion of the corporate insolvency resolution process of 180 days which is extendable by 90 days. The proviso to section 12(3) imposes an outer-limit of 330 days including time taken in legal proceedings. It is stated that the insolvency proceedings the present case are nearing competition in terms of the timeline given in the Code.
iii) An appeal being a creature of statue must have the clear authority of law. The IBC envisages a comprehensive dispute resolution process in Chapter VI. The NCLT is the empowered ‘adjudicating authority’ under Section 60 of the IBC with the jurisdiction to entertain any proceeding in relation to insolvency resolution or liquidation proceedings under the IBC. Under 61 an appeal within n a period of 30 days lies before NCLAT.
iv) The order which is sought to be challenged by the Appellant herein is passed by NCLT relying on the judgements of the Hon’ble Supreme Court. The issue raised before the NCLT was whether the Appellant were a secured creditor or not. After detailing the definitions of “Secured Creditor”, “Operational Creditor”, “Financial Creditor” and “Operational Debt” NCLT relying on the judgment of this in Swiss Ribbons Ltd. & Anr. vs. UOI & Ors. reported in (2019) 4 SCC 17 held that dues of Government, Central and or State Government or any legal authority fall under the category of “Operational Debt”. The Hon’ble Supreme Court I the said judgment has categorically held that “an ‘Operational Debt’ would include a claim in respect of the provision of goods or service, including employment, or a debt in respect of payment of goods or services, arising under any law and payable in to the government or any local authority. Statutory dues such as income tax, value added tax and other statutory dues arising out of law will arise only if the company/corporate debtor is operational and, therefore, such dues have a direct Nexus with the company”
With the aforesaid, Ld. counsel for the Respondent No. 1 and 2 has opposed the prayer for condoning the delay.
we have heard Ld. Counsel for the parties and in view of the directions passed by the Hon’ble Supreme Court which have been filed in application, the delay of 536 days is hereby condoned and I.A. No. 2812 of 2021 is allowed.
Ld. counsel for the Respondent No. 1 and 2 are directed to file the hard copy of the Reply Affidavit on merits within three weeks. Rejoinder, if any, may be filed by the Appellant within one week thereafter. List this Appeal ‘For Admission (After Notice)’ 12th July, 2022.