Tata Steel BSL Limited Vs Venus Recruiter private Limited & Ors (Delhi High Court)
Delhi High Court held that timelines under Regulation 35A of the CIRP Regulations, 2016 for filing avoidance application are directory and not mandatory in nature.
Facts- The present Letters Patent Appeals have been filed by Tata Steel BSL Ltd. and the Union of India impugning the Judgment and Order dated 26.11.2022 (Impugned Judgment) rendered in W.P.(C) No. 8705 of 2019 titled Venus Recruiters Pvt. Ltd. vs. Union of India & Ors., wherein the Ld. Single Judge inter-alia held that an application filed u/s. 43 of the Insolvency and Bankruptcy Code, 2016 (IBC) for avoidance of preferential transactions cannot survive beyond the conclusion of corporate insolvency resolution process (CIRP). Accordingly, the Appellants have sought before this Court that the Impugned Judgment be set aside.
Conclusion- Held that the timelines under Regulation 35A are directory and not mandatory in nature. This is because Regulation 35A pertains merely to the RP discharging his statutory burden of filing an avoidance application within an outer limit of 135 days from the commencement of the CIRP. This timeline takes date of commencement of CIRP as the reference point. However, the CIRP process itself is not strictly or mandatorily bound by its own timelines.
