Speed is the essence of IBC; time barred debt cannot be resurrected: NCLAT

The National Company Law Appellate Tribunal (NCLAT), Chennai recently reiterated the importance of adhering to timelines under the Insolvency & Bankruptcy Code, 2016 (IBC) [The Regional Provident Fund Commissioner EPFO v. Mr. Vasudevan Resolution Professional & Liquidator of M/s. Titanium Tantalum Products Limited]..The Bench of Justice M Venugopal and Kanthi Narahari stated in the judgment,"`Speed’ is the essence of I & B Code, 2016. `Time Wasted’/`Lost’ cannot be revisited/regained. The process of Liquidation is time bound, to be completed within one year in the teeth of the I & B Code, 2016. Undoubtedly, the Code is an inbuilt and self-contained one and the object of the I & B Code, 2016, is that, a time barred `Debt’ cannot be resurrected or given a fresh tenure of life, as opined by this `Tribunal’.".While rejecting a condonation of delay appeal, the Appellate Tribunal held,“Just because the Appellant is a Statutory Organisation, no `indulgence’ or `latitude’ can be shown since the `Law’ applies to one and all in a level playing field.”.The case of the appellant was that the corporate debtor had failed to remit the employees’ contribution to the Employees Provident Fund (EPF), amounting to over ₹1.17 crore. The respondent company went into liquidation, after which the appellant sent repeated communications to the Resolution Professional informing him of the amounts due to the employees.It was contended that the amount due to the Provident Fund is not an asset of the operational creditor, but was an asset of the employees. Hence this cannot be included in the liquidation assets and could not be used for recovery in terms of the liquidation. Further, the amount due to the Employees Provident Fund Organisation is exempted under the provisions of the Code.The National Company Law Tribunal (NCLT) at Chennai, however, dismissed the appellant's plea on grounds of delay..The appellant then filed an appeal against the decision of the NCLT after a delay of 116 days. The ground of the appeal was that the NCLT did not provide the appellant a proper opportunity of hearing. Seeking condonation of delay, the appellant submitted that being a government organization, it catered to workmen interests in line with larger public interest and if the delay was not condoned, it would suffer irreparable loss and hardship..The Bench noted that a tribunal or court would be reluctant to excuse delay on the part of a litigant who is guilty of inaction or negligence. The judgment stated,"An unpardonable lackadaisical approach / attitude of the `Party’ in pursuing a matter before the `Competent Authority’/`Tribunal’ is not to be accepted. The `Law of Limitation’ being harsh, will affect a `Litigant’, but it has to be pressed into service with all its vigour and rigour in the considered opinion of this `Tribunal'.".After evaluating the facts and circumstances of the case, the Bench upheld the NCLT order and dismissed the appeal.Advocate R Vishnu appeared for appellant while Advocate K Moorthy appeared for the respondent..[Read the Judgment]