Dismissal of Writ Petition Challenging NCLT Liquidation Order

The court dismissed the writ petition challenging the NCLT order dated 30.03.2021, which initiated liquidation after dismissing an interlocutory application under Section 60(5) of the IBC. The court found the application under Section 7 of the IBC not barred by limitation due to debt acknowledgment within the limitation period. Non-disclosure of material facts and failure to join a necessary party led to the petition's dismissal. The court highlighted the availability of an alternative remedy under Section 61 of the IBC, emphasizing the importance of adhering to statutory limitation periods. The interim order was vacated, and no costs were awarded.

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Issues Involved:

1. Legality and validity of the NCLT order dated 30.03.2021.
2. Bar of limitation under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016.
3. Non-joinder of necessary party.
4. Availability of alternative remedy under Section 61 of IBC.

Summary:

1. Legality and validity of the NCLT order dated 30.03.2021:
The petitioner challenged the NCLT order dated 30.03.2021, which dismissed the interlocutory application filed under Section 60(5) of the IBC. The petitioner sought dismissal of the application under Section 7 of the IBC as being barred by limitation. NCLT had initiated the Corporate Insolvency Resolution Process (CIRP) on 20.09.2019 and later ordered liquidation on 22.02.2021.

2. Bar of limitation under Section 7 of the IBC:
The petitioner argued that the application under Section 7 of the IBC was barred by limitation as the default date was 31.05.2011, and the application was filed in 2019. However, the court found that the financial creditor had acknowledged the debt in writing within the initial three-year period, thus extending the limitation period. The court referred to the Supreme Court's decision in Rajendra Narottamdas Sheth v. Chandra Prakash Jain, which held that Section 18 of the Limitation Act, 1963 applies to applications under Section 7 of the IBC.

3. Non-joinder of necessary party:
The court noted that the petitioner had not disclosed material facts, including the sale of the corporate debtor to M/s. Mahashiv Shakti Trading Company. This non-disclosure and non-joinder of the necessary party were grounds for dismissal of the writ petition.

4. Availability of alternative remedy under Section 61 of IBC:
The court emphasized that the petitioner had the remedy of filing an appeal under Section 61 of the IBC against the NCLT order dated 20.09.2019 but failed to do so within the prescribed limitation period. The court referred to the Supreme Court's decision in Glaxo Smith Kline Consumer Health Care Limited, which held that High Courts should not entertain petitions under Article 226 after the exhaustion of the statutory limitation period.

Conclusion:
The court dismissed the writ petition, stating that it was thoroughly misconceived. The interim order passed on 21.12.2021 was vacated, and no order as to costs was made.

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