Delays in Resolving Interim Applications Impacting Creditors: Urgent Action Needed

The National Company Law Appellate Tribunal expressed concern over the delay in deciding Interim Applications (IAs) in a Corporate Insolvency Resolution Process (CIRP), impacting the Appellant and other Creditors. Despite setting a three-month deadline for the Adjudicating Authority to resolve the matter, the IAs remained pending, causing further delay. The Tribunal urged the Adjudicating Authority to expedite the process and prioritize the pending IAs to address the Appellant's concerns efficiently.

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Issues: Delay in deciding Interim Applications in Corporate Insolvency Resolution Process (CIRP) and the impact on the Appellant's claim.

In this judgment by the National Company Law Appellate Tribunal, the Appellant filed an appeal against an order passed by the Adjudicating Authority in relation to Interim Applications (IAs) in a Corporate Insolvency Resolution Process (CIRP) concerning a specific Corporate Debtor. The Appellant claimed that their filed claim was accepted by the Liquidator, which was challenged by Respondent No.1, the suspended Director of the Corporate Debtor, through IA No. 368 of 2020. The Adjudicating Authority passed an ex parte order directing parties to maintain status quo regarding fund distribution to Financial Creditors. Subsequently, the Appellant filed IA No. 555 of 2020 seeking recall of the ex parte order. Both IAs remained pending before the Adjudicating Authority without a decision. The Tribunal referred to a previous order in a similar matter and expressed concern over the delay, directing the Adjudicating Authority to expedite the process and dispose of the matter within three months. However, despite the three-month deadline passing, the IAs were still pending, causing further delay and disadvantage to the Creditors.

The Appellant's Counsel highlighted the prolonged delay in deciding the IAs, leading to a disadvantage for the Appellant and other Creditors. The Tribunal acknowledged the delay and expressed concern over the protracted nature of the proceedings. The Counsel mentioned the absence of a Member (Technical) at the Chandigarh Bench, resulting in operational challenges. Despite understanding the Tribunal's difficulties, the Counsel emphasized the Appellant's suffering due to the delays. The Tribunal, noting the elapsed three-month deadline from the previous order, expressed anguish over the continued delay. Consequently, the Tribunal disposed of the present Appeal with a request to the Adjudicating Authority to prioritize and promptly decide the pending IAs to address the Appellant's concerns and resolve the matter efficiently.

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