NCLAT restored a Section 9 petition previously dismissed as time-barred, holding that the COVID-19 period from March 15, 2020, to February 28, 2022, must be excluded from the limitation period under the IBC.
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench comprising Justice Yogesh Khanna (Judicial Member) and Technical Member Mr. Ajai Das Mehrotra reviewed an appeal held that the period from 15.03.2020 to 28.02.2022, as per the Supreme Court's directive in In Re: Cognizance for Extension of Limitation, must be excluded when calculating the limitation period under the IBC, resulting in an extended timeline for filing legal proceedings, including Section 9 petitions. Consequently, the NCLAT held that the appellant's petition was within limitation and restored it for adjudication.
The National Company Law Appellate Tribunal (NCLAT) addressed an appeal against an order dated 16.10.2023 passed by the Adjudicating Authority, New Delhi, which dismissed a Section 9 petition under the Insolvency and Bankruptcy Code (IBC), 2016, as time-barred. The appellant argued that the Adjudicating Authority misinterpreted the Supreme Court’s judgment in In Re: Cognizance for Extension of Limitation, which excluded the period from 15.03.2020 to 28.02.2022 from limitation due to the COVID-19 pandemic. The appellant contended that excluding this period extended the limitation period, making the petition filed on 31.08.2023 within the prescribed time.
The NCLAT reviewed the Supreme Court’s judgment, which explicitly stated that the period from 15.03.2020 to 28.02.2022 must be excluded from limitation calculations under general or special laws. Further reliance was placed on the Delhi High Court’s decision in Captain Sudhanshu Bhardwaj v. Air India Limited and the Supreme Court’s judgment in Prakash Corporate v. Dee Vee Projects Limited, REEDLAW 2022 SC 02564, affirming that the excluded period enlarged the time for filing legal proceedings.
The Tribunal calculated that excluding the specified 23 months and 15 days shifted the expiry of the limitation period to 17.10.2024, well beyond the date of filing the Section 9 petition. Accordingly, the NCLAT held that the petition was filed within limitation and restored it to its original number before the Adjudicating Authority. The appeal was allowed, and pending applications were disposed of.
Mr. Anand Shankar Jha, Ms Meenakshi S Devgan, Mr. Sachin Mintri and Mr. Abhilekh Tiwari, Advocates represented the Appellant.
No representation was made on behalf of the Respondent.
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