1. Claim filing in Corporate Insolvency Resolution Process — Condonation of delay — Application under Section 60(5) of the Insolvency and Bankruptcy Code. (Para 1 , 8 , 10 , 11 )
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2021 Supreme(SC) 1032
SUPREME COURT OF INDIA
Indira Banerjee, J.K. Maheshwari, JJ.
GPR Power Solutions Private Limited Through Mr. S. Damodaran, CEO – Appellant
Versus
Mr. Supriyo Chaudhuri (RP of Rohit Ferro Tech Limited) and Ors. – Respondents
Civil Appeal No. 6553 of 2021
Decided On : 29-11-2021
Important Points
The Supreme Court held that the limitation period extension granted in Suo Motu Writ Petition (Civil) No. 3 of 2020, which excluded the period from 15.03.2020 to 14.03.2021, applies to filing claims under the IBC, and such claims cannot be rejected for delay occurring during this period.
Subject
Insolvency and Bankruptcy - Condonation of Delay in Filing Claim
Act Referred
ARBITRATION AND CONCILIATION ACT: S.11, S.31(7), S.34, S.23(4), S.29(a)
Commercial Courts Act: S.12(a)
CONSTITUTION OF INDIA: Art.142, Art.141
Insolvency and Bankruptcy Board of India Insolvency Process for Corporate Persons Regulations: Reg.7
Insolvency and Bankruptcy Code: S.62, S.7, S.60(5), S.61
NEGOTIABLE INSTRUMENTS ACT: S.138(b)
Commercial Courts Act: S.12(a)
CONSTITUTION OF INDIA: Art.142, Art.141
Insolvency and Bankruptcy Board of India Insolvency Process for Corporate Persons Regulations: Reg.7
Insolvency and Bankruptcy Code: S.62, S.7, S.60(5), S.61
NEGOTIABLE INSTRUMENTS ACT: S.138(b)
Headnote
Insolvency and Bankruptcy Code 2016 – Section 62 – Condonation of delay – Appeal under Section 62 of Insolvency and Bankruptcy Code 2016, is against a judgment and order passed by Principal Bench of National Company Law Appellate Tribunal at New Delhi, dismissing appeal being Company Appeal (AT) (INS.) filed by Appellant against an order passed by Adjudicating Authority , in CP (IB) whereby learned Adjudicating Authority dismissed filed by Appellant seeking condonation of delay in filing its claim of against Corporate Debtor before Resolution Professional –Held, Since appellant was required to file its claim, and appellant actually filed claim well before, claim ought not to have been rejected – Order of this Court was subsisting and in force – In computing the limitation for any application, period is to be excluded – All litigants whose limitation expired would be entitled to extension of limitation – Learned NCLAT also did not notice orders passed by this Court in suo motu Writ Petition (Civil) – Learned Adjudicating Authority ought not to have rejected claim of appellant – Learned NCLAT erred in dismissing appeal, without even considering effect and impact of orders of this Court writ petition – Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Appellant sought condonation of delay due to pandemic-related hardships — Claim rejected as time-barred and Resolution Plan already approved by Committee of Creditors. (Para 9 , 10 , 12 , 13 )
3. The Adjudicating Authority and NCLAT failed to apply the Supreme Court's Suo Motu directions extending limitation periods during the COVID-19 pandemic. (Para 14 , 15 , 16 , 17 , 18 , 19 )
4. Limitation periods for legal proceedings are extended or excluded as per the Supreme Court's Suo Motu directions during the pandemic, binding all tribunals. (Para 15 , 16 , 18 )
5. Appeal allowed — Impugned orders set aside — Application for condonation of delay in filing claim under Section 60(5) of the IBC allowed. (Para 20 )
6. Does the Supreme Court's Suo Motu order on limitation during COVID-19 apply to IBC proceedings?
Yes, the order extending limitation periods during the pandemic is a binding order under Article 141 of the Constitution of India on all courts, tribunals, and authorities, including those adjudicating matters under the Insolvency and Bankruptcy Code. (Para 15 , 16 , 18 )
7. How is the limitation period calculated for proceedings affected by the COVID-19 pandemic according to the Suo Motu order?
The period from 15.03.2020 to 14.03.2021 is excluded. For limitations expiring during this window, a period of 90 days from 15.03.2021 is provided, unless the actual balance period remaining was longer. (Para 16 , 18 )
8. Can a claim in CIRP be rejected as time-barred if it was filed during the period covered by the Supreme Court's limitation extension?
No, if the claim was filed within the extended period provided by the Supreme Court's Suo Motu directions, it should not be rejected on the grounds of being time-barred. (Para 17 , 19 )
JUDGMENT :
Indira Banerjee, J.
This appeal under Section 62 of the Insolvency and Bankruptcy Code 2016, hereinafter referred to as the ‘IBC’ is against a judgment and order dated 15.09.2021 passed by the Principal Bench of the National Company Law Appellate Tribunal at New Delhi, hereinafter referred to as the ‘NCLAT’ dismissing the appeal being Company Appeal (AT) (INS.) No.743 of 2021 filed by the Appellant against an order dated 9th July, 2021 passed by the Adjudicating Authority (National Company Law Tribunal, Kolkata Bench), in CP (IB) No. 1214/KB/2018 whereby the learned Adjudicating Authority dismissed IA/344(KB)/2021 filed by the Appellant seeking condonation of delay in filing its claim of Rs.1,13,38,651/-against the Corporate Debtor (the Respondent No.3) before the Resolution Professional.
2. The Appellant carries on business of Supply and Erection of Piping Systems. On or about 25th April, 2012 the Respondent No.3 being the Corporate Debtor contacted the Appellant at its office at Chennai, and placed Purchase Order No.C212425-001 on the Appellant for design, supply, erection and testing of LP piping system and the commissioning of an LDO (Light Diesel Oil) storage handling system for its IX 67.5 MW Power Plant (Unit-II) at Industrial Growth, Kolinga Nagar, Rabana, Post-Jakhapura, Odisha, for a consideration of Rs.5,37,75,761/-excluding taxes and duties. Later, the Corporate Debtor amended the said purchase order, to include additional work of the value of Rs.88,64,239/-excluding taxes and duties.
3. The Appellant contends that the Corporate Debtor failed and neglected to pay a sum of Rs.76,85,472/-due and payable to the Appellant in connection with the purchase order referred to above. The Appellant was therefore, constrained to invoke the Arbitration Clause in the contract between the Appellant and the Corporate Debtor.
4. The Appellant filed an application being AP No.840 of 2016 in the Calcutta High Court under Section 11 of the Arbitration and Conciliation Act, 1996 hereinafter referred to as the ‘A&C Act’ for appointment of an Arbitral Tribunal in respect of its aforesaid claim. By an order dated 29th September, 2016, a Single Bench of the Calcutta High Court appointed an Arbitrator to adjudicate the dispute that had arisen between the Appellant and the Respondent.
5. The Appellant filed its statement of claim and the Corporate Debtor filed its counter statement before the learned Arbitrator. The respective parties also filed documents in support of their respective contentions.
6. After hearing the respective parties, the learned Arbitrator made and published a final award on 30th November, 2018, the operative part whereof is set out here-in-below :-
“(a) The Claimant shall be awarded a sum of Rs.55,01,661/-as mentioned more fully and particularly in paragraph 46 hereof.
(b) The claiming shall be entitled to interest on the aforesaid sum at the rate of two percent higher than the current rate of interest prevalent on the date of the award on and from August 8, 2014 till the date of payment. The expression ‘current rate of interest’ shall have the same meaning ascribed to it in the explanation to section 31(7) of the said Act.
(c) The claimant shall be entitled to costs assessed at Rs.5,00,000/-”
7. The Appellant filed an Application for setting aside of the award under Section 34 of the A&C Act being Miscellaneous Case No. ARB 11 of 2019 before the Court of the learned District Judge at Alipore District, 24 South Parganas, which is still pending.
8. On or about 7th February, 2020 while the application filed by the Corporate Debtor under Section 34 of the A&C Act being Misc. Case No. ARB 11 of 2019 was pending in the Court of learned District Judge at Alipore, 24 South Parganas, the Respondent No.2 namely State Bank of India being a Financial Creditor of the Corporate Debtor, filed an application before the Kolkata Bench of National Company Law Tribunal under Section 7 of the IBC, for initiation of Corporate Ins
