Indian Bank vs P.C.Dey And Son Distributors ...
- CitationCompany Appeal (AT) (Insolvency) No. 510 of 2024
Ratio decidendi
The rule this decision rests on
The period from 15.03.2020 to 28.02.2022 stands excluded in computing limitation for an application under Section 7 of the Insolvency and Bankruptcy Code, in accordance with the Supreme Court's directions in the Suo Motu extension-of-limitation order dated 10.01.2022, so that the limitation period is computed by excluding that interval from the date of default. Where the date of default falls before the excluded period, only the time elapsed up to 15.03.2020 is counted against the limitation period, and an application filed after the excluded period is within time if the balance of the period remaining after that exclusion has not expired. An adjudicating authority that rejects a Section 7 application as time-barred without applying that exclusion to the computation of limitation commits an error warranting the setting aside of its order and the revival of the petition for hearing afresh.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Indian Bank ...Appellant Versus P.C. Dey & Sons Distributors Pvt. Ltd. ...Respondent
Present: For Appellant : Mr. Arjun Asthana, Mr. Sidhartha Sharma and Mr. Nachiket Chawala, Advocates.
For Respondent :
ORDER
(Hybrid Mode)
26.11.2024 : Heard Counsel for the Appellant.
2. Notices were issued to Respondents, who were served by publication,
but no one has appeared on behalf of the Respondents nor Reply has been
filed by Respondent.
3. This Appeal has been filed against an Order dated 12.01.2024 passed
by the Learned Adjudicating Authority (National Company Law Tribunal,
Kolkata Bench, Court No. II, Kolkata) in C.P. (IB) No. 78/KB/2023, by which
Order, Section 7 Application filed by the Appellant has been rejected on the
ground that it is barred by Limitation.
4. Brief facts necessary to be noticed for deciding the Appeal are:
i. The date of default has accepted by the Adjudicating Authority is
01.10.2019.
ii. Application under Section 7 was filed by the Appellant on 02.03.2023.
iii. Adjudicating Authority took a view that period of Limitation expired on
27.01.2023, hence the Application is barred by time.
5. Counsel for the Appellant challenging the Order of the Adjudicating
Authority contends that Adjudicating Authority misrepresented the Order
passed by the Hon'ble Supreme Court in `RE: Cognizance for Extension of
Limitation' in Suo Motu Writ Petition (C) No. 03/2020 dated 10.01.2022.
He submits that the entire period from 15.03.2020 till 28.02.2022 was to be
excluded and after exclusion of the said period, the Application which was
filed by the Appellant on 02.03.2023 was not beyond Limitation.
6. We have considered the submissions of Counsel for the Appellant and
perused the record.
7. The Order of the Hon'ble Supreme Court dated 10.01.2022, in
Paragraph 5 directed as follows:
"5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with 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 form 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,
Comp. App. (AT) (Ins.) No. 510 of 2024 & I.A. No. 1781 of 2024 2 of 4 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."
8. The Adjudicating Authority in the Impugned Order has noticed about
the exclusion of the said period in Paragraph 31 of the Order however has
held the Application filed on 02.03.2023 as barred by time and admitted the
date of default is 01.10.2019.
9. When we exclude the period from 15.03.2020 to 28.02.2022 which is
15 days less than two years period, the Application filed on 02.03.2023 cannot
be said to be barred by time. The entire period from 15.03.2020 to 28.02.2022
has to be excluded and by 15.03.2020 from 01.10.2019 only 5 months and
15 days have elapsed.
10. Thus, when we exclude the said period there was balance period for
filing the Application and the Adjudicating Authority committed error in
rejecting the Application as barred by time.
11. We allow the Appeal, set aside the Order dated 12.01.2024 revive the
C.P. (IB) No. 78/KB/2023 to be heard afresh. Fresh Notice be issued to
Respondent by the Adjudicating Authority.
Comp. App. (AT) (Ins.) No. 510 of 2024 & I.A. No. 1781 of 2024 3 of 4 Appeal is disposed of accordingly.
[Justice Ashok Bhushan] Chairperson
[Barun Mitra] Member (Technical)
[Arun Baroka] Member (Technical) himanshu/nn
Comp. App. (AT) (Ins.) No. 510 of 2024 & I.A. No. 1781 of 2024 4 of 4
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