Iifl Finance Ltd Formerly India ... vs Avj Developers India Pvt Ltd And Anr ...
- CitationCompany Appeal (AT) (Insolvency) No. 110 of 2021
Ratio decidendi
The rule this decision rests on
The Adjudicating Authority, having reserved and re-listed an application (I.A. No. 1261(PB)/2020) that was directed to be disposed of within a fixed time by an earlier appellate order and by the Supreme Court, may not extend the CIRP period on the footing that the application is still pending; the pendency of such an application arising from its own non-compliance with the time-bound directions does not justify extension of the insolvency timeline. Where a Committee of Creditors is considering a resolution plan while a financial creditor's claim raised in a pending application remains undecided, the Adjudicating Authority must dispose of that application before the COC takes a decision on approval of the plan, and the COC is restrained from considering the plan until then.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No. 110 of 2021 In the matter of: IIFL Finance Ltd. (Formerly India Infoline Finance ....Appellant Ltd.) Vs. AVJ Developers (India) Pvt. Ltd. and Anr. (through ....Respondents RP) Present: Appellant: Mr. Amit Singh Chadha, Senior Advocate with Mr. Suresh Dutt Dobhal, Mr. Nirmal Goenka, Advocates. Respondent: Mr. Abhishek Anand, Mr. Kunal Godhwani, Mr. Viren Sharma, Advocates for R1&2
ORDER
(Through Virtual Mode) 15.02.2021: The Adjudicating Authority (National Company Law
Tribunal), New Delhi, Principal Bench, has in terms of the impugned order
dated 11th January, 2021 extended Corporate Insolvency Resolution Process
(CIRP) period up to 60 days w.e.f 27th December, 2020 keeping in view the
Committee of Creditors' (COC) Resolution dated 19th December, 2020. It is
gathered from the impugned order that the extension of CIRP period was
sought on the ground that order in I.A No. 1261(PB)/2020 was yet to be
passed. The impugned order is assailed in the instant appeal merely on the
ground that the Appellant's- Financial Creditor's claim has to be considered
before taking of any decision by the COC in regard to approval of Resolution
Plan.
2. Mr. Abhishek Anand, Advocate appearing on behalf of Respondents
submits that the Appellant is not a member of the COC which is seized of the
Contd/-........
-2-
matter and Resolution Plan in respect of the Corporate Debtor is under
consideration. It is submitted by him that time has been extended to enable
the CIRP to be brought to logical conclusion by enabling the COC to take a
decision in regard to the Resolution Plan pending before it for approval.
3. Mr. Amit Singh Chadha, Senior Advocate representing the Appellant has
invited our attention to two orders, one passed by the Adjudicating Authority
on 12th November, 2020 in terms whereof, along with other applications, order
came to be reserved in regard to I.A No. 1261(PB)/2020 and the second order
referred to by him is dated 9th December, 2020 passed by the Adjudicating
Authority which reveals that along with some other applications, I.A No.
1261(PB)/2020 has been adjourned for further hearing to 14th December, 2020
as the learned counsel had not concluded submissions. Responding thereto,
Mr. Abhishek Anand, learned counsel for the Respondents submits that some
clarification was sought, that is why the matter was re-opened for hearing
further submissions.
4. Mr. Amit Singh Chadha, Senior Advocate representing the Appellant has
further invited our attention to the order passed on 14th December, 2020 to
demonstrate that order in respect of I.A No. 1261(PB)/2020 was again reserved
on that date. Our attention has also been invited to order dated 10th
September, 2020 passed by this Appellate Tribunal in Company Appeal (AT)
(Insolvency) No. 772 of 2020 by virtue whereof this Appellate Tribunal had
Company Appeal (AT) (Insolvency) No. 110 of 2021 -3-
directed the Adjudicating Authority to hear applications including I.A No.
1261(PB)/2020 and make all endeavors to dispose off the same within two
weeks.
5. It is further demonstrated that the matter has even travelled to the
Hon'ble Apex Court where in Civil Appeal No. 3512 of 2020 their Lordship
passed order dated 26th November, 2020 directing the Adjudicating Authority
to deliver judgment in keeping with the order of this Appellate Tribunal within
a period of one week. It is pointed out that the Adjudicating Authority has not
only failed to adhere to the timelines prescribed under 'I&B Code' but also
failed to comply with the direction of this Appellate Tribunal as also of the
Hon'ble Apex Court.
6. After hearing learned counsel for the parties and fathoming through the
records, we are of the opinion that the matter has not been dealt with in the
manner as it ought to have been. The Adjudicating Authority should have
accorded priority to the matter and ensured that directions passed by this
Appellate Tribunal and the Hon'ble Apex Court are observed in strict
compliance and I.A No. 1261(PB)/2020 is disposed off well before the COC
takes a decision in regard to approval of the Resolution Plan pending for
consideration before it. In the given circumstances, we are of the considered
opinion that this appeal can be disposed off by directing the Adjudicating
Authority to dispose of I.A No. 1261(PB)/2020 within one week from today and
report compliance to this Appellate Tribunal. Till then the COC shall not
Company Appeal (AT) (Insolvency) No. 110 of 2021 -4-
consider the Resolution Plan pending before it.
A copy of this order be communicated to the Adjudicating Authority
forthwith.
[Justice Bansi Lal Bhat] Acting Chairperson
[Dr. Ashok Kumar Mishra] Member (Technical)
AR/g
Company Appeal (AT) (Insolvency) No. 110 of 2021
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free