NCLT rejects plea for initiating insolvency against Air India

The New Delhi Bench of National Company Law Tribunal (NCLT) on Tuesday rejected a plea filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Air India (BKP Enterprise v. Air India Limited)..The plea filed by Bharat Zaveri, proprietor of the operational creditor BKP Enterprise, was rejected by a Bench of judicial member Abni Ranjan Kumar Sinha and technical member LN Gupta on the ground of delay. The NCLT noted that the application was filed after the limitation period of three years and was therefore, barred by law of limitation."There is no specific averment made by the applicant as to what prevented the Operational Creditor to file the Section 9 application in time and what are the specific reasons along with the corresponding number of days of delay in filing the Petition," the order said..The plea seeking initiation of CIRP was first listed before the NCLT on July 9, 2021. The plea mentioned date of default of dues by Air India as March 11, 2013. The plea had, however, been filed only on June 30, 2021. The NCLT, therefore, asked the operational creditor to convince the Bench on the point of limitation and maintainability. The operational creditor admitted that the plea was not filed within the limitation period of 3 years. It, therefore, filed an interlocutory application (IA) for condonation of delay. In the said IA, it was contended that the operational creditor had been acting bona fide and delay in presenting the Section 9 petition was solely due to the reasons not attributable to the operational creditor. It was further submitted that the operational creditor, despite being a Micro, Small & Medium Enterprise (MSME) had been vigilantly fighting for its cause in order to receive the admitted outstanding sums from the corporate debtor from the year 2013 while the acts of the corporate debtor, being a Central government company, were in complete deviance from the principles of fairness and suffered from the vice of arbitrariness.The NCLT, however, disagreed stating that there was no specific argument as to what prevented the operational creditor from filing the Section 9 application on time. "We conclude that the Operational Creditor has failed to demonstrate the “sufficient cause” for condoning the delay in filing the present IB petition, hence, we are not inclined to allow the Interlocutory Application," the order said..Consequently, the petition was also dismissed for being barred by limitation. Advocates Suvigya Awasthi and Vivek Joshi appeared for the operational creditor. .[Read Order]