Full Judgment Text
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6553 OF 2021
GPR Power Solutions Private Limited
Through Mr. S. Damodaran, CEO ...Appellant(s)
of Appellant
Versus
Mr. Supriyo Chaudhuri
(RP Of Rohit Ferro Tech Limited)
and Ors. .…
Respondent(s)
J U D G M E N T
INDIRA BANERJEE, J.
This appeal under Section 62 of the Insolvency and Bankruptcy Code
2016, hereinafter referred to as the ‘IBC’ is against a judgment and order
dated 15.09.2021 passed by the Principal Bench of the National Company
Law Appellate Tribunal at New Delhi, hereinafter referred to as the ‘NCLAT’
dismissing the appeal being Company Appeal (AT) (INS.) No.743 of 2021
filed by the Appellant against an order dated 9 th July, 2021 passed by the
Adjudicating Authority (National Company Law Tribunal, Kolkata Bench), in
CP (IB) No. 1214/KB/2018 whereby the learned Adjudicating Authority
dismissed IA/344(KB)/2021 filed by the Appellant seeking condonation of
Signature Not Verified
Digitally signed by
NEETU KHAJURIA
Date: 2022.01.07
16:03:45 IST
Reason:
delay in filing its claim of Rs.1,13,38,651/- against the Corporate Debtor (the
Respondent No.3) before the Resolution Professional.
2. The Appellant carries on business of Supply and Erection of Piping
Systems. On or about 25 th April, 2012 the Respondent No.3 being the
Corporate Debtor contacted the Appellant at its office at Chennai, and placed
Purchase Order No.C212425-001 on the Appellant for design, supply, erection
and testing of LP piping system and the commissioning of an LDO (Light
Diesel Oil) storage handling system for its IX 67.5 MW Power Plant (Unit-II)
at Industrial Growth, Kolinga Nagar, Rabana, Post- Jakhapura, Odisha, for a
consideration of Rs.5,37,75,761/- excluding taxes and duties. Later, the
Corporate Debtor amended the said purchase order, to include additional
work of the value of Rs.88,64,239/- excluding taxes and duties.
3. The Appellant contends that the Corporate Debtor failed and
neglected to pay a sum of Rs.76,85,472/- due and payable to the Appellant
in connection with the purchase order referred to above. The Appellant was
therefore, constrained to invoke the Arbitration Clause in the contract
between the Appellant and the Corporate Debtor.
4. The Appellant filed an application being AP No.840 of 2016 in the
Calcutta High Court under Section 11 of the Arbitration and Conciliation Act,
1996 hereinafter referred to as the ‘A&C Act’ for appointment of an Arbitral
Tribunal in respect of its aforesaid claim. By an order dated 29 th September,
2016, a Single Bench of the Calcutta High Court appointed an Arbitrator to
adjudicate the dispute that had arisen between the Appellant and the
Respondent.
5. The Appellant filed its statement of claim and the Corporate Debtor
filed its counter statement before the learned Arbitrator. The respective
parties also filed documents in support of their respective contentions.
6. After hearing the respective parties, the learned Arbitrator made
and published a final award on 30 th November, 2018, the operative part
whereof is set out hereinbelow:-
“a) The Claimant shall be awarded a sum of Rs.55,01,661/- as
mentioned more fully and particularly in paragraph 46 hereof.
b) The claiming shall be entitled to interest on the aforesaid sum
at the rate of two percent higher than the current rate of interest
prevalent on the date of the award on and from August 8, 2014 till
the date of payment. The expression ‘current rate of interest’ shall
have the same meaning ascribed to it in the explanation to section
31(7) of the said Act.
c) The claimant shall be entitled to costs assessed at
Rs.5,00,000/-”
7. The Appellant filed an Application for setting aside of the award
under Section 34 of the A&C Act being Miscellaneous Case No. ARB 11 of
2019 before the Court of the learned District Judge at Alipore District, 24
South Parganas, which is still pending.
8. On or about 7 th February, 2020 while the application filed by the
Corporate Debtor under Section 34 of the A&C Act being Misc. Case No. ARB
11 of 2019 was pending in the Court of learned District Judge at Alipore, 24
South Parganas, the Respondent No.2 namely State Bank of India being a
Financial Creditor of the Corporate Debtor, filed an application before the
Kolkata Bench of National Company Law Tribunal under Section 7 of the IBC,
for initiation of Corporate Insolvency Resolution Process (CIRP) against the
Corporate Debtor, and a Resolution Professional was appointed.
9. On or about 11 th February, 2020 the CIRP was advertised and
claims invited from creditors of the Corporate Debtor within the date
stipulated in the advertisement. Soon thereafter, the entire country was
engulfed by the COVID-19 pandemic, and a countrywide lockdown was
imposed on 25.03.2020, which was extended from time to time. According
to the appellant, in view of the COVID-19 pandemic and subsequent
imposition of countrywide lockdown, the Appellant was not aware of the
initiation of CIRP against the Corporate Debtor. It was only on 27 th
November, 2020 when counsel engaged by the Appellant to defend Misc.
Case No. ARB 11 of 2019 filed by the Appellant, appeared in the Court of the
learned District Judge at Alipore District, 24 Parganas, that he came to know
that the Corporate Debtor had not been taking steps in the Arbitration
Proceedings in view of Insolvency process initiated against it. It was only
thereafter that the Appellant came to know of the order dated 7 th February,
2020 of the learned Adjudicating Authority.
10. The Appellant contends that on the date of commencement of
Corporate Insolvency Resolution Process on 7 th February, 2020 the total claim
of the Appellant against the Corporate Debtor was Rs.1,13,38,651/-. The
Appellant took immediate steps to prepare and file its claim in Form-B,
supported by relevant documents in support of the said claim under
Regulation 7 of the Insolvency and Bankruptcy Board of India (Insolvency
Process for Corporate Persons) Regulations 2016, hereinafter referred to as
the “Insolvency Regulations”. However, by an email dated 14 th January, 2021
the Resolution Professional appointed to conduct the CIRP informed the
Appellant of his refusal to entertain the claim on the ground that it had been
filed beyond time.
11. On 11.03.2021, the Appellant filed an application under Section
60(5) of the IBC being No. IA/344 (KB) 2021 in CP (IB) No.1214/KB/2018
submitting its claim, as aforesaid alongwith an application for condonation of
delay in filing its claim.
12. The said application under Section 60(5) of the IBC being IA/344
(KB) 2021 was delayed by about two months as the CEO of the Appellant, 72
years of age had been working from home at Chennai because of the COVID-
19 pandemic situation. Furthermore, there was a manpower crisis in the
office of the Appellant at Chennai. By an order dated 9 th July, 2021, the
Adjudicating Authority dismissed the Application filed by the Appellant under
Section 60(5) of the IBC for condonation of delay in filing its claim.
13. Being aggrieved the Appellant filed an appeal before the learned
NCLAT under Section 61 of the IBC, which has been dismissed by the
judgment and order impugned in this appeal, mainly on the ground that the
Resolution Process had been approved by the Committee of Creditors on
21.06.2020.
14. It appears that the attention of the learned Adjudicating Authority
was not drawn to the orders passed by this Court in Suo Motu Writ Petition
(Civil) No. 3 of 2020.
15. On 22.3.2020, this Court passed the following order:
“This Court has taken Suo Motu cognizance of the situation arising out of
the challenge faced by the country on account of Covid-19 Virus and
resultant difficulties that may be faced by litigants across the country in
filing their petitions/applications/suits/appeals/all other proceedings
within the period of limitation prescribed under the general law of
limitation or under Special Laws (both Central and/or State).
To obviate such 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
th
condonable or not shall stand extended w.e.f. 15
March 2020 till
further order/s to be passed by this Court in present proceedings.
We are exercising this power under Article 142 read with Article 141 of
the Constitution of India and declare that this order is a binding order
within the meaning of Article 141 on all courts/tribunals and authorities.
This order may be brought to the notice of all High Courts for being
communicated to all subordinate Courts/Tribunals within their respective
jurisdiction.”
16. The aforesaid suo motu writ petition was disposed of by an order
dated 8 th March, 2021, the operative part whereof is set out herein below:
“We are of the opinion that the order dated 23.03.2020 has served its
purpose and in view of the changing scenario relating to the pandemic,
the extension of limitation should come to an end.
2. We have considered the suggestions of the learned Attorney General
for India regarding the future course of action. We deem it appropriate to
issue the following directions: -
1. In computing the period of limitation for any suit, appeal,
application or proceeding, the period from 15.03.2020 till
14.03.2021 shall stand excluded. Consequently, the balance period
of limitation remaining as on 15.03.2020, if any, shall become
available with effect from 15.03.2021.
2. In cases where the limitation would have expired during the
period between 15.03.2020 till 14.03.2021, notwithstanding the
actual balance period of limitation remaining, all persons shall have
a limitation period of 90 days from 15.03.2021. In the event the
actual balance period of limitation remaining, with effect from
15.03.2021, is greater than 90 days, that longer period shall apply.
3. The period from 15.03.2020 till 14.03.2021 shall also stand
excluded in computing the periods 2 | P a g e prescribed under
Sections 23 (4) and 29A of the Arbitration and Conciliation Act,
1996, Section 12A of the Commercial Courts Act, 2015 and provisos
(b) and (c) of Section 138 of the Negotiable Instruments Act, 1881
and any other laws, which prescribe period(s) of limitation for
instituting proceedings, outer limits (within which the court or
tribunal can condone delay) and termination of proceedings.
4. The Government of India shall amend the guidelines for
containment zones, to state.
“Regulated movement will be allowed for medical emergencies,
provision of essential goods and services, and other necessary
functions, such as, time bound applications, including for legal
purposes, and educational and job-related requirements.”
3. The Suo Motu Writ Petition is disposed of accordingly.”
17. Since the appellant was required to file its claim within 3 months
from 11.02.2020, and the appellant actually filed claim well before 14 th
January, 2021, the claim ought not to have been rejected. The order dated
22.03.2020 of this Court was subsisting and in force.
18. In computing the limitation for any application, the period from
22.03.2020 till 14.3.2021 is to be excluded. All litigants whose limitation
expired after 22.03.2020 would be entitled to extension of limitation till the
90 th day from 15.03.2021. The learned NCLAT also did not notice the orders
passed by this Court in suo motu Writ Petition (Civil) No. 3 of 2020.
19. The learned Adjudicating Authority ought not to have rejected the
claim of the appellant. The learned NCLAT erred in dismissing the appeal,
without even considering the effect and impact of the orders of this Court in
the suo motu writ petition.
20. The appeal is, therefore, allowed. The impugned judgment and
order of the learned NCLAT is set aside. The impugned order dated 9.7.2021
of the learned Adjudicating Authority is also set aside and the application of
the appellant under Section 60(5) of the IBC is allowed.
…....................................J
[INDIRA BANERJEE]
..............................……..J
[J.K. MAHESHWARI]
NEW DELHI
;
NOVEMBER 29 , 2021