The court affirmed that timelines in the IBBI Regulations are directory unless specified otherwise, allowing for extensions under extraordinary circumstances like the COVID-19 pandemic.

JUDGMENT :

HIMA KOHLI, J.

A. BACKDROP

1. The appellant - V.S. Palanivel (shareholder/former Managing Director of M/s Sri Lakshmi Hotel Private Limited) has filed the present appeals against the judgment and order dated 16th September, 2022, passed by the National Company Law Appellate Tribunal, Chennai Bench¹[In short ‘Tribunal’] in three Company Appeals²[Company Appeal (AT) (CH) (Ins} No. 336 of 2021; Company Appeal (AT) (CH) (Ins) No. 339 of 2021 and Company Appeal (AT) (CH) (Ins) No. 343 of 2022) preferred by him. The details of the said Company Appeals are (i) Company Appeal No. 336 of 2021 (subject matter of Civil Appeal No. 9059 of 2022) filed against the common judgment dated 17th November, 2021 passed by the National Company Law Tribunal, Chennai Bench³[In short ‘Adjudicating Authority’] rejecting an application⁴[MA No. 120 of 2020] moved by the appellant praying inter alia that directions be issued to the Liquidator, Sri Lakshmi Hotel Private Limited to stall all proceedings in respect of the e-auction conducted by him on 23rd December, 2019, to work on an alternative manner of dividing the property put to auction and sell only a part of the land and for grant of sufficient time to make payment to the financial creditor. (ii) Company Appeal No. 339 of 2021 (subject matter of Civil Appeal No. 9060 of 2022) arose from the common order dated 17th November, 2021 passed by the Adjudicating Authority on an Interim Application⁵[IA SR No. 944 of 2020 on 25th September, 2020] seeking recall of its order dated 05th May, 2020 passed on an application⁶[IA 335 of 2020 in MA/689/2019 in CP/1140/IB/2018] filed by the appellant. (iii) Company Appeal No. 343 of 2021 (subject matter of Civil Appeal No. 9061 of 2022) filed by the appellant on 27th October, 2021 under Section 61 of the Insolvency and Bankruptcy Code, 2016⁷ [In short ‘IBC’] against order dated 05th May, 2020 passed by the Adjudicating Authority allowing an application moved by the successful bidder, M/s KMC Speciality Hospitals (India) Limited⁸[In short ‘Auction Purchaser’] for extension of time to deposit the balance sale consideration after the Central/State lockdown was lifted. All the aforesaid appeals were dismissed by the Tribunal under the impugned judgment and order dated 16th September, 2022.

2. It may be noted at the outset that Civil Appeal No. 9059 of 2022 does not survive inasmuch as the auction proceedings have already been concluded and upon the Auction Purchaser depositing the sale amount, the Liquidator has executed a Sale Deed in its favour. Therefore, the scope of the present judgment is confined to Civil Appeals No. 9060 and 9061 of 2022.

B. SEQUENCE OF EVENTS

3. The facts of the case lie in a narrow compass. Sri Lakshmi Hotels Private Limited⁹[In short ‘company/Corporate Debtor’], a family held concern having four shareholders namely, the appellant herein, his wife, his son and his daughter-in-law purchased an immovable property¹⁰[situated at Old No. 3A, New No. 27, Alexandria Road, Cantonment, Tiruchirappalli-620001 at Tiruchirappalli measuring 67,533 sq. ft. The company started running a hotel and a bar from the said premises. In the year 2006, the company took a loan from a financial creditor to the tune of Rs.1,57,25,000/- (Rupees One crore fifty seven lakh twenty five thousand only). When disputes arose between the company and the financial creditor, the latter invoked the arbitration clause governing the parties. The Arbitral Tribunal passed an award on 27th December, 2014, for a sum of Rs. 2,21,08,244/- (Rupees Two crore twenty one lakh eight thousand two hundred and forty four only) in favour of the financial creditor along with interest at the rate of 24 % per annum from the date of claim petition till the date of realisation. The company challenged the said award¹¹[Original Petition No.137 of 2015] under Section 34 of the Arbitration and Conciliation Act, 1996, but the said petition was dismissed by the High Court of Madras vide order dated 16th N