Adjudicating Authority & Appeals

The period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings – In Re: Cognizance for Extension of Limitation – Supreme Court

Hon’ble Supreme Court issues the following directions:
I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings.
II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.
III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply.
IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

The period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings – In Re: Cognizance for Extension of Limitation – Supreme Court Read Post »

Whether the Adjudicating Authority while considering Application of Pre-packaged Insolvency under Section 54C of the Code can, before admission of the Application, hear Objectors/Interveners – Krrish Realtech Pvt. Ltd. – NCLAT New Delhi

This Appeal raises a limited issue as to whether the Adjudicating Authority while considering Application of pre-packaged insolvency(PPIRP) under Section 54C of the Code can, before admission of the Application, hear Objectors/ Interveners.
NCLAT held that the statutory scheme delineated by Chapter III-A of the Code as well as the Regulations, 2021 as observed above does not indicate any prohibition on the Adjudicating Authority to hear any objector or intervener before admitting an application of PPIRP. When there is no prohibition in hearing an objector or interveners by the Adjudicating Authority, the orders passed by the Adjudicating Authority giving time to the objectors to file objection cannot be said to be in breach of any statutory provisions. We may hasten to add that hearing of objectors or interveners in each case where PPIRP application has been filed is not a matter of course and has to be limited to exceptional cases. We are cautious that proceeding under the Code are time bound procedure where unnecessary delay has to be avoided by the Adjudicating Authority and giving time to objections which are meritless and giving time to objectors and interveners has to be exercised on sound discretion on valid grounds.

Whether the Adjudicating Authority while considering Application of Pre-packaged Insolvency under Section 54C of the Code can, before admission of the Application, hear Objectors/Interveners – Krrish Realtech Pvt. Ltd. – NCLAT New Delhi Read Post »

It is trite law that commercial wisdom of the CoC has been given paramount status without any judicial intervention, for ensuring completion of the processes within the timelines prescribed by the IBC – Ngaitlang Dhar Vs. Panna Pragati Infrastructure Pvt. Ltd. & Ors. – Supreme Court

Hon’ble Supreme Court set aside NCLAT order and held that it is trite law that ‘commercial wisdom’ of the CoC has been given paramount status without any judicial intervention, for ensuring completion of the processes within the timelines prescribed by the IBC. It has been consistently held that it is not open to the Adjudicating Authority (the NCLT) or the Appellate Authority (the NCLAT) to take into consideration any other factor other than the one specified in Section 30(2) or Section 61(3) of the IBC. It has been held that the opinion expressed by the CoC after due deliberations in the meetings through voting, as per voting shares, is the collective business decision and that the decision of the CoC’s ‘commercial wisdom’ is non­ justiciable, except on limited grounds as are available for challenge under Section 30(2) or Section 61(3) of the IBC. This position of law has been consistently reiterated in a catena of judgments of this Court.

It is trite law that commercial wisdom of the CoC has been given paramount status without any judicial intervention, for ensuring completion of the processes within the timelines prescribed by the IBC – Ngaitlang Dhar Vs. Panna Pragati Infrastructure Pvt. Ltd. & Ors. – Supreme Court Read Post »

If the right of lessor to recover rent are affected on account of moratorium, the lessor is entitled to recover the rent and which shall include in CIRP costs – Prerna Singh Vs. CoC of M/s Xalta Food and Beverages Pvt. Ltd. – NCLAT New Delhi

NCLAT held that it is not disputed that this Appellate Tribunal does not have power to punish for contempt of its own order. The objection is only about the invoking of inherent powers under Rule 11 of NCLAT Rules, 2016. Mere mentioning a wrong provision in the Application will not affect the merits of the case and therefore, we find no substance in this preliminary objection. As per CIRP Regulation 31 Insolvency Resolution Process costs under Section 5(13)(e) mean defined in clause (a) to (e). for the present case, Regulation 31(b) is relevant which provides that amounts due to a person whose rights are prejudicially affected on account of the moratorium imposed under Section 14(1) (d). Due to moratorium period the lessor could not recover the possession of the property from the Corporate Debtor. Thus, the right of lessor to recover rent are affected on account of moratorium. Therefore, the lessor is entitled to recover the rent and which shall include in CIRP costs. Thus, we find no substance in the argument that the rent cannot be included in the CIRP costs.

If the right of lessor to recover rent are affected on account of moratorium, the lessor is entitled to recover the rent and which shall include in CIRP costs – Prerna Singh Vs. CoC of M/s Xalta Food and Beverages Pvt. Ltd. – NCLAT New Delhi Read Post »

Adjudicating Authority must either admit or reject an application filed u/s 7 of IBC, it cannot compel a party to the proceedings before it to settle a dispute – E S Krishnamurthy & Ors. Vs. M/s Bharath Hi Tech Builders Pvt. Ltd. – Supreme Court

Hon’ble Supreme Court set aside judgment of NCAT and NCLT and held that the Adjudicating Authority must either admit the application under Section 7(5)(a) or it must reject the application under Section 7(5)(b). The statute does not provide for the Adjudicating Authority to undertake any other action, but for the two choices available. The Adjudicating Authority is empowered only to verify whether a default has occurred or if a default has not occurred. Based upon its decision, the Adjudicating Authority must then either admit or reject an application respectively. These are the only two courses of action which are open to the Adjudicating Authority in accordance with Section 7(5). The Adjudicating Authority cannot compel a party to the proceedings before it to settle a dispute. What the Adjudicating Authority and Appellate Authority, however, have proceeded to do in the present case is to abdicate their jurisdiction to decide a petition under Section 7 by directing the respondent to settle the remaining claims within three months and leaving it open to the original petitioners, who are aggrieved by the settlement process, to move fresh proceedings in accordance with law. Such a course of action is not contemplated by the IBC. Thus, while the Adjudicating Authority and Appellate Authority can encourage settlements, they cannot direct them by acting as courts of equity.

Adjudicating Authority must either admit or reject an application filed u/s 7 of IBC, it cannot compel a party to the proceedings before it to settle a dispute – E S Krishnamurthy & Ors. Vs. M/s Bharath Hi Tech Builders Pvt. Ltd. – Supreme Court Read Post »

Regulation 47 of Liquidation Process deals with only model timelines which are directory and not mandatory, extension of time under Liquidation can be allowed in exceptional circumstances – Prakash Chandra Kapoor Vs. Vijay Kumar Iyer, (Liquidator) – NCLAT New Delhi

NCLAT held that it just & expedient to exercise our inherent powers under Rule 11 of the NCLAT Rules, 2016 to extend the period by six weeks to enable the Liquidator to attempt the Sale as a Going Concern. The timelines under Regulation 47 for Liquidation Process, are directory. Procedural law should not be construed as an obstruction but as an aid to Justice. Extension of time under Liquidation may be allowed only on the satisfaction that there exists exceptional circumstances. What is mandated in the Code in Section 35(1)(e) is to ‘carry on business’ for its ‘beneficial Liquidation’. The Regulation therefore cannot override the objective of ‘beneficial liquidation’ provided for in Section 35(1)(e) of the Code.

Regulation 47 of Liquidation Process deals with only model timelines which are directory and not mandatory, extension of time under Liquidation can be allowed in exceptional circumstances – Prakash Chandra Kapoor Vs. Vijay Kumar Iyer, (Liquidator) – NCLAT New Delhi Read Post »

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