The NCLAT has stayed the initiation of the Corporate Insolvency Resolution Process (CIRP) due to delays in filing the petitions beyond the limitation period.
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench, comprising Justice Yogesh Khanna (Judicial Member) and Indevar Pandey (Technical Member), stayed the initiation of the Corporate Insolvency Resolution Process (CIRP) due to challenges concerning the timeliness of filing the company petitions, specifically focusing on whether sufficient cause was shown for the delay beyond the statutory limitation period.
The appeals were filed challenging the orders dated 17.05.2024. The appellant's learned counsel argued that loans were granted to M/s Amay Home Services Ltd. and M/s Ruby Build Estates Pvt. Ltd. in 2008, with disbursements occurring until March 2009. A demand notice was issued by the respondent on 13.01.2010, and the respondent corporation took physical possession of the mortgaged property on 23.03.2010. Although an auction was scheduled for 2010, it was stayed by the Jaipur Bench of the Rajasthan High Court on 04.05.2010.
Company Petitions Nos. 84/7/JPR/2021 and 83/7/JPR/2021 were filed on 12.08.2021. The appellant contended that these petitions were time-barred, having been filed over three years after the enactment of the Insolvency and Bankruptcy Code, 2016, and alleged that the impugned orders lacked sufficient grounds to condone the delay under Section 5 of the Limitation Act, 1963. The respondent corporation was accused of misusing the COVID-19 pandemic's judicial benefits, arguing that the petitions should have been filed between January 2019 and March 2020. The respondent argued that the debt was not contested by the appellant and noted that the respondent had unsuccessfully attempted to auction the mortgaged property on at least seventy occasions.
The Tribunal issued a notice and directed the respondent corporation to file a reply affidavit within four weeks, with the appellant required to file a rejoinder three weeks thereafter. The matters were scheduled to be listed on 22nd July 2024, with the operation of the impugned orders related to the initiation of the Corporate Insolvency Resolution Process (CIRP) being stayed until then.
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