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legal authority, altogether, the AA is bound to reject the resolution plan. of claim due to the applicant by condoning the delay of 936 days in claiming
If a company is unable to pay its debts, which should include its statutory WKH GXHV XQGHU WKH (PSOR\HHV 3URYLGHQW )XQGV 0LVFHOODQHRXV 3URYLVLRQV
dues to the government and/or other authorities and there is no plan which Act, 1952. In appeal against AA order of rejection of such application, the
contemplates dissipation of those debts in a phased manner, the company NCLAT held that the law of limitation being harsh, will affect a litigant, but it
would necessarily have to be liquidated and its assets sold and distributed in has to be pressed into service with all its vigour and rigour. An unpardonable
the manner stipulated in section 53 of the Code. Under section 53(1)(b)(ii), lackadaisical approach / attitude of the party in pursuing a matter before
the debts owed to a secured creditor, which would include the State under the Tribunal is not to be accepted. An application for condonation of delay
WKH *9$7 $FW DUH WR UDQN HTXDOO\ ZLWK RWKHU VSHFLÀHG GHEWV LQFOXGLQJ GHEWV undoubtedly creates a jurisdictional fetter against consideration of tangible /
on account of workmen’s dues for a period of 24 months preceding the substantive matter on merits. While dismissing the appeal, it was observed
liquidation commencement date. The State is a secured creditor under the that just because the appellant is a statutory organisation, no indulgence or
*9$7 $FW 6HFWLRQ RI WKH &RGH GHÀQHV VHFXUHG FUHGLWRU WR PHDQ D latitude can be shown, since the law applies to one and all in a level playing
creditor in favour of whom security interest is created. Such security interest ÀHOG 7KH RIÀFLDOV PXVW DFW ZLWK DV PXFK GLOLJHQFH DV LV H[SHFWHG IURP D
could be created by operation of law. litigant.
Tech Sharp Engineers Pvt. Ltd. Vs. Sanghvi Movers Limited [Civil Mr. Prashat Agarwal Vs. Vikash Parasrampuria & Anr. [Company
Appeal No. 296 of 2020] Appeal (AT) (Ins) No. 690 of 2022]
The SC observed that proceedings in good faith before a forum which The issue of maintainability of application on the grounds of threshold limit,
lacks jurisdiction may save limitation. Similarly, acknowledgment of liability came up for consideration. In this case, out of nine invoices raised by the
may have the effect of commencing a fresh period of limitation. The SC OC, the CD had paid only three. The AA admitted the section 9 application
noted that in the instant case, the last acknowledgment was in 2013 and the for initiation of CIRP. The admission order was challenged on the grounds
0DGUDV +& ZKHUHLQ WKH ZLQGLQJ XS SURFHHGLQJV DJDLQVW WKH &' ZHUH ÀOHG that principal amount of debt is only ` 97,87,220/- which is below the
on July 4, 2015 and there is continuous cause of action, the claim is within the prescribed threshold limit. The NCLAT noted that all nine invoices clearly
period of limitation and did not suffer from any defect of jurisdiction. It held stipulated provision of interest on delayed payment, this will entitle for ‘right
WKDW WKH SHQGHQF\ RI WKH SURFHHGLQJV LQ 0DGUDV +& ÀOHG E\ WKH RSHUDWLRQDO to payment’ as per section 3(6) and will form part of ‘debt’ under section
FUHGLWRU 2& VDYHV WKH OLPLWDWLRQ IRU ÀOLQJ DQ DSSOLFDWLRQ XQGHU VHFWLRQ 3(11) of the Code. It held that the interest on delayed payment gets included
of the Code. with the principal debt to form part of the total claim.
Maitreya Doshi Vs. Anand Rathi Global Finance Ltd. and Anr. [Civil Pooja Finlease Ltd. Vs. Auto Needs (India) Pvt. Ltd. & Anr. [Company
Appeal No. 6613 of 2021] Appeal (AT) (Insolvency) No. 103 of 2022]
Relying on its decision in Lalit Kumar Jain v. Union of India, the SC held that The NCLAT held that as one of the clauses in the settlement terms
the approval of a resolution in respect of one borrower cannot certainly contemplated revival of CIRP in the event of any breach of the terms on the
discharge a co-borrower under the Code. If there are two borrowers or if part of CD, the FC is entitled to revive the section 7 application in event of
two corporate bodies fall within the ambit of CDs, there is no reason why any breach of the settlement terms.
proceedings under section 7 of the Code cannot be initiated against both
the CDs. If the dues are realised in part from one CD, the balance may be Dolphin Vintrade Private Limited Vs. Ashray Vyapaar Private
realised from the other CD being the co-borrower. Once the claim of the Limited & Anr. [Company Appeal (AT) (Insolvency) No 320 of 2022
FC is discharged, there can be no question of recovery of the claim twice. & I.A. No. 1066 & 1082 of 2022]
Order of admission passed by the AA in a section 7 application, was
High Court challenged on the grounds that CD was already under liquidation in terms
of the provisions of the Sick Industrial Companies (Special Provisions) Act,
Vishnu Oil Mill Private Ltd. Vs. Union of India & Ors. [D.B. Civil Writ 1986. The NCLAT while allowing the appeal and setting aside the admission
Petition No. 2507/2022] order observed that CD was in liquidation and all its assets were custodial
The question for consideration was, whether a group of FCs can jointly legis (in the custody of the law) and in the control and possession of the
trigger CIRP without adhering to the requirement of default threshold of RIÀFLDO OLTXLGDWRU :KHQ OLTXLGDWLRQ SURFHVV KDV FRPPHQFHG ZD\ EDFN LQ
` 1 crore in individual capacity? The Rajasthan HC observed that section 1997, how the default could have been committed by the CD? It held that
7 clearly stipulates that the application for triggering CIRP may be initiated by although, pendency of winding-up petition before the HC may not preclude
a FC either individually or jointly with other FCs. It can easily be envisaged ÀOLQJ RI VHFWLRQ DSSOLFDWLRQ EXW ZKHQ WKHUH DUH YDULRXV RUGHUV SDVVHG
that in cases of micro, small and medium enterprises (MSMEs), there may by Company Judge, which has relevance and consequence on section
not exist FCs whose individual debt is ` 1 crore or above. It held that the 7 application, the orders passed in company petition ought to have been
statute and the amendment made therein makes it clear that the same adverted by the AA before admitting the application. The NCLAT imposed
ZDV IRUPXODWHG LQ VXFK D PDQQHU VR DV WR SURYLGH D PHDQV RI HIÀFDFLRXV a cost of ` ODNKV RQ WKH )& WR EH GHSRVLWHG ZLWK WKH RIÀFLDO OLTXLGDWRU
redressal to the smaller FCs and to give them an opportunity of availing
the speedy remedy under the Code rather than being relegated to other Sudip Dutta Vs. State Bank of India [Company Appeal (AT)
onerous proceedings for securing their money. Therefore, a group of FCs (Insolvency) No. 807 of 2021]
FDQ FRQYHUJH DQG MRLQ KDQGV WR WRXFK WKH ÀQDQFLDO OLPLW RI ` 1 crore as The issues for consideration before the NCLAT in this case were, whether
stipulated under the Code so as to initiate a CIRP. a personal guarantee stands extinguished, once the personal guarantor (PG)
DFTXLUHV IRUHLJQ FLWL]HQVKLS DIWHU H[HFXWLRQ RI JXDUDQWHH GHHG DQG ZKHWKHU
NCLAT the Central Government was required under section 234 of the Code to
enter into agreement for expediting the matter against the PG. The NCLAT
The Regional Provident Fund Commissioner Employees Provident ZKLOH GLVPLVVLQJ WKH DSSHDO ÀOHG DJDLQVW RUGHU RI $$ DGPLWWLQJ WKH DSSOLFDWLRQ
Fund Organisation Vs. Mr. Vasudevan Resolution Professional & against the PG, observed that the statutory scheme of the Code does not
Liquidator of M/s. Titanium Tantalum Products Limited [Company
contain any indication that the PG of a CD can escape from its liability under
Appeal (AT) (CH) (INS) No. 182 of 2022 & IA No. 415 of 2022] the personal guarantee deed merely on the ground that he is now residing
(PSOR\HHV 3URYLGHQW )XQG 2UJDQLVDWLRQ KDG ÀOHG DQ LQWHUORFXWRU\ LQ DQRWKHU FRXQWU\ DQG DFTXLUHG FLWL]HQVKLS RI DQRWKHU FRXQWU\ DQG LV QR
application before the AA seeking an order in directing the RP to make PRUH DQ ,QGLDQ FLWL]HQ DV WKLV ZLOO DOORZ VXFK 3*V WR ZDVK RII IURP WKHLU
provision in the IM and corresponding resolution plan if any, for the payment obligation under the guarantee deed. It further observed that the provision

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11/15/2022 12:24:48 PM
IBBI newsletter.indd 8
IBBI newsletter.indd 8 11/15/2022 12:24:48 PM