Filing is complete when CIRP application is presented at filing counter of Registry: NCLAT

The National Company Law Appellate Tribunal (NCLAT), Delhi recently held that the date of filing of an application is the date when the application is placed before the Registry, and not the date when the Registry allocates a number to the application [Dinesh Kumar Basia v. State Bank of India]..The Bench of Justices Ashok Bhushan and M Satyanarayana Murthy, and technical member Barun Mitra held,“When we read Rule 2 (14) along with Rule 23 of NCLT Rules, it is clear that Application is treated to be filed when it is filed in the Office of the Registry at the filing counter. Thus, filing on behalf of the Appellant/Applicant is complete as soon as the Application is presented at the filing counter of the Office of the Registry.".The State Bank of India (creditor) had filed an application under Section 95(1) of the Insolvency and Bankruptcy Code (IBC) to start the insolvency process against the appellant, who was the guarantor of the corporate debtor. The appellant also filed an application under Section 94 of IBC (application by debtor to initiate insolvency process) at a later date. SBI had filed its application with the registry on October 1, 2021, but the same was numbered by the registry only on February 22, 2022. The Section 94 application was filed by the appellant on October 25, 2021, and was numbered on December 22, 2021. Hence, the appellant claimed that its petition under Section 94 was earlier in point of time, and from which date the moratorium under Section 96 shall kick in, prohibiting the consideration of SBI's Section 95 application.The National Company Law Tribunal (NCLT) held in favour of SBI, noting that its Section 95 application was filed earlier in time, and appointed a Resolution Professional. This order was then challenged before the NCLAT..The question before the NCLAT was whether an application was said to be 'filed' when placed at the filing counter or when the registry numbered the application.The appellate tribunal went through the scope of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 read with the NCLT Rules, 2016, to hold,"If we accept the submission of the Appellant that filing is postponed till it is numbered, it will lead to uncertainty and allow the Guarantors and other Respondents to delay the moratorium by pleading that filing is not complete, since the Application has not yet numbered...Numbering of Application is essential for different purpose and cannot be equated with the filing as contemplated by the Rules.".Further, it noted,"Several consequences ensue on filing of the Application in the Registry, if it is accepted that the filing shall be dependent on numbering of the Application by the Registry. It will lead to uncertainty regarding date of filing. When statutory consequences are provided, there has to be certainty regarding such consequences. We cannot accept any interpretation, which may lead to uncertainty regarding the date of filing, resulting in uncertainty, regarding enforcement of the Interim Moratorium.".After going through a number of Supreme Court and High Court judgments, the Bench came to the conclusion that the NCLT order did not warrant any interference, and dismissed the appeal..Advocates Abhishek Anand and Mohak Sharma appeared for SBI. Advocates Rishi Kapoor, Akhil Shankhwar and Satish Rai, appeared for the appellants..[Read Judgment]