NCLAT allows exclusion of time spent in passing of order for disbursing amount to financial creditors

Case Details: Rajesh Goyal v. Babita Gupta - [2021] 130 taxmann.com 423 (NCLAT- New Delhi)

Judiciary and Counsel Details

• • Jarat Kumar Jain, Judicial Member and Dr. Ashok Kumar Mishra, Technical Member
  • Abhijeet Sinha and Saurabh Jain for the Applicant. Praful Jindal, Rajesh Gupta, Anubhav Mehrotra, Pravesh Bahuguna, Sumesh Dhawan, Ms. Vatsala Kak, Sudeep Kumar Shrotriya, Rishabh Jain, Abhindra Maheshwari, Rupesh Kumar, Kumar Anurag Singh, Zain A. Khan, Nishant Piyush, Ram Sharma, Amandeep Singh, Rudreshwar Singh, Gautam Singh and Manoj Kumar for the Respondent.

Facts of the Case

The Allottee-financial creditors moved an application under section 7 for initiation of CIRP against corporate debtor and Infrastructure Company and the NCLT admitted application.

Thereafter, the promoter preferred an appeal which was decided by NCLAT by order dated 5-2-2020, holding the concept of reverse CIRP and directing the promoter to cooperate with IRP, to disburse the amount as a financial creditor, and timelines were set.

Thereafter, an appeal was filed by a promoter to seek an extension of timelines stipulated in judgment dated 5-2-2020, due to the outbreak of COVID-19.

NCLAT Held

The NCLAT vide order dated 4-3-2021, disposed of the application allowing to extend timelines envisaged in an order dated 5-2-2020, without altering, substituting, or modifying its structural terms.

The Applicant, on the other hand, filed an instant application seeking clarification of the order dated 4-3-2021. It was submitted that the revised timeline proposed by the applicant in Chart was up to 15-1-2021, as same was based on assumption that the order would be passed around 15-1-2021, however, since the order was passed on 4-3-2021 i.e. after 48 days from the proposed exclusion date, therefore, an exclusion for the period when the order was passed i.e. 4-3-2021, may be granted, otherwise, it would cause irreparable loss.

In view of the above facts, an applicant would be entitled to get a revised timeline with exclusion up to 4-3-2021, for completion of a project.

Case Review

• • Rajesh Goyal v. Babita Gupta [2021] 130 taxmann.com 422 (NCLAT – New Delhi) (para 16) Modified.