Bhim Sain Goyal vs The American Swan Lifestyle Co Pvt Ltd ...
- CitationCompany Appeal (AT) (Insolvency) No. 1067 of 2020
Ratio decidendi
The rule this decision rests on
The Supreme Court's suo motu extension of limitation dated 23 March 2020, which extended limitation for filing petitions, applications, suits, appeals and other proceedings from 15 March 2020 until further orders, is confined in its direct terms to the filing of such proceedings; but the spirit of that direction, recognising the hardship caused by the COVID-19 lockdown, applies by analogy to other time-bound proceedings under the Insolvency and Bankruptcy Code, such as the reckoning of the Corporate Insolvency Resolution Process period. An adjudicating authority that declines to exclude time from the Corporate Insolvency Resolution Process period, while giving no reasons addressing the grounds advanced for exclusion, passes a non-speaking order which cannot be sustained. Where restrictions on movement arising from the lockdown impeded the Interim Resolution Professional from performing its functions, the period of such impediment may be excluded in reckoning the 180-day Corporate Insolvency Resolution Process period, and the Appellate Tribunal may grant such exclusion on the basis of a Committee of Creditors recommendation, without prejudice to a further application for extension on cogent reasons.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Bhim Sain Goyal ....Appellant
Vs
The American Swan Lifestyle Co. Pvt. Ltd. (Under CIRP) ....Respondent
Present: For Appellant: Mr. Pramod K. Sachdeva, Advocates with Mr. Bhim Sain Goyal, IRP in person. For Respondent:
ORDER
(Through Virtual Mode)
15.12.2020: This appeal is preferred by the Interim Resolution Professional -
Shri Bhim Sain Goyal, appointed to conduct the Corporate Insolvency Resolution
Process in respect of the Corporate Debtor - 'American Swan Lifestyle Co. Pvt.
Ltd.', against impugned order dated 23rd October, 2020 passed by the
Adjudicating Authority (National Company Law Tribunal) New Delhi, Court II by
virtue whereof the Adjudicating Authority, while declining exclusion of 167 days
allowed exclusion only to the extent of 68 days from initial period of 180 days of
Corporate Insolvency Resolution Process.
2. Learned counsel for the Appellant submits that the impugned order is a
non-speaking order and the Adjudicating Authority has failed to appreciate that
the Hon'ble Apex Court has extended limitation in suo moto proceedings from
15th March, 2020 till further orders.
Cont'd..../ -2-
3. After hearing Shri P. K. Sachdeva, Advocate representing the Appellant -
Interim Resolution Professional, we find that the order passed by the Hon'ble
Apex Court in suo moto Writ Petition (Civil) No. 3/2020 on 23rd March, 2020
concerns only filing of petitions/ applications/ suits/ appeals and other
proceedings for which period of limitation has been extended w.e.f. 15th March,
2020 till further orders irrespective of the limitation prescribed under the general
law or special laws. Though, this direction given by the Hon'ble Apex Court
under Article 142 r/w Article 141 of Constitution of India has not been
specifically made applicable to matters other than filing of petition, applications,
suits, appeals, etc, the spirit behind it holds good in other proceedings as well.
The Hon'ble Apex Court has taken note of the difficulties arising out of the
imposition of lockdown in the wake of outbreak of COVID 19 pandemic and the
directions came to be passed to obviate such difficulties.
4. In the instant case, we find that the Adjudicating Authority has declined
to exclude 167 days while reckoning the period of Corporate Insolvency
Resolution Process by making an observation that the reasons stated are not
plausible. The reasons assigned for seeking such exclusion and why the same
did not prevail with the Adjudicating Authority have not been addressed. The
impugned order to this extent can safely be termed to be a non-speaking order
and cannot be supported.
Company Appeal (AT) (Insolvency) No. 1067 of 2020 -3-
5. It is submitted by Mr. P. K. Sachdeva, learned counsel for the Appellant
that lockdown was imposed on 25th March, 2020 and even though the unlock
process was stated in a phased manner after 30th June, 2020, many restrictions
were continuing in the entire NCR area where the Corporate Debtor and its
Registered Office is located. The Interim Resolution Professional and his team
could not perform its function due to restrictions on movement.
6. Judicial notice has been taken of the hardship caused, curbs on movement
and normal business activities which is evident from order passed by the Hon'ble
Apex Court in suo moto proceedings. Therefore, following the spirit of the dictum
of Hon'ble Apex Court, we are of the considered opinion that to obviate the
difficulties faced by the Appellant - Interim Resolution Professional in taking
steps necessary for carrying forward the Corporate Insolvency Resolution
Process, the prayer for exclusion of time w.e.f. 20th March, 2020 to 2nd
September, 2020 based on recommendation of Committee of Creditors dated 9th
September, 2020 was warranted.
7. For the reasons stated hereinabove, we set aside the impugned order and
while allowing the prayer direct exclusion of time w.e.f 20th March, 2020 to 2nd
September, 2020 in reckoning of the ordinary Corporate Insolvency Resolution
Process period viz. 180 days. Beyond that, if an occasion arises for seeking
Company Appeal (AT) (Insolvency) No. 1067 of 2020 -4-
extension of time based on cogent reasons, the Resolution Professional shall be
at liberty to seek the same from the Adjudicating Authority. The appeal is
accordingly allowed with direction to the Appellant - Interim Resolution
Professional to carry forward the Corporate Insolvency Resolution Process with
expedition.
8. A copy of this order be communicated to the Adjudicating Authority
(National Company Law Tribunal), New Delhi, Court II forthwith.
[Justice Bansi Lal Bhat] Acting Chairperson
[Justice Anant Bijay Singh] Member (Judicial) am/gc
Company Appeal (AT) (Insolvency) No. 1067 of 2020
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