2022 (3) TMI 637 - Tri - Insolvency and Bankruptcy

High Court Directs Appeal Filing & Stay on Creditor Meetings

Alchemist Asset Reconstruction Company Ltd. Versus Jaipur Metals & Electricals Ltd.

The High Court directed the filing of an appeal within five days and stayed Committee of Creditors meetings for a week. NCLAT instructed the Resolution ... Seeking exclusion of time period of 170 days from 06.07.2021 to 22.12.2021 from the total period of completion of CIRP process - HELD THAT:- In view of the situation of the COVID-19 pandemic, the Hon'ble Supreme Court of India in Re: cognizance for extension of Limitation, [2020 (5) TMI 418 - SC ORDER] where it was held that To obviate the difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunals across the country including this Court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings. Similarly, the Insolvency and Bankruptcy Board of India vide notification dated 20.04.2020, inserted Regulation 40C to the Insolvency and Bankruptcy Board of India (Resolution Process for Corporate Persons) Regulations, 2016 and the said regulation held that the period of lockdown imposed by the Central Government in the wake of Covid-19 outbreak shall not be counted for the purpose of computation of the timeline for any task that could not be completed due to such lockdown, in relation to any CIRP. After the grant of the exclusion period of 238 days, the period of CIRP i.e. 270 days, will end on 08.09.2022. Further, the applicant herein had published an invitation for the resolution plan and pursuant to the same, the Resolution Professional has received prospective resolution plans from the two prospective resolution applicants - application allowed. Issues involved:- Challenge to order passed by NCLT, Jaipur Bench- Stay on meeting of Committee of Creditors (CoC)- Appeal before NCLAT, Principal Bench, New Delhi- Exclusion of time period from CIRP process- Impact of COVID-19 pandemic on legal proceedings- Request for physical hearing- Decision on exclusion period applicationChallenge to order passed by NCLT, Jaipur Bench:The State of Rajasthan challenged an order before the High Court, leading to directions for filing an appeal within five working days and a stay on CoC meetings for a week. Subsequently, an appeal was filed before NCLAT, which directed the Resolution Professional not to convene any CoC meeting until certain pending applications were disposed of. The NCLAT emphasized that further steps should only be taken after the applications were resolved, leaving the final decision to NCLT, and the matter was to be expedited within three months.Exclusion of time period from CIRP process:An application was filed seeking exclusion of 170 days due to COVID-19 impact, supported by Supreme Court and NCLAT orders extending limitation periods. The Resolution Professional later requested exclusion of 238 days, which was granted by considering the pandemic's effect on legal proceedings. This exclusion extended the CIRP period, allowing for resolution plan consideration.Impact of COVID-19 pandemic on legal proceedings:Various legal bodies, including the Supreme Court, NCLAT, and IBBI, issued orders and notifications extending limitation periods and excluding lockdown periods for CIRP computations. These measures aimed to mitigate hardships faced by stakeholders and ensure the continuity of legal processes during the pandemic.Request for physical hearing:A request was made for a physical hearing, but due to logistical challenges, the matter was listed for a later date. The Registry sought guidance on following a hybrid mode of hearing, and a special bench was constituted for the upcoming hearings.In conclusion, the judgment addressed challenges to NCLT orders, the impact of the pandemic on legal timelines, and the exclusion of time periods for CIRP processes, ensuring fairness and procedural compliance amidst exceptional circumstances.