J C Flower Asset Reconstruction Pvt. Ltd. Vs Mehul Gor & another (NCLAT Delhi)
These two appeals arise from separate orders of the Adjudicating Authority (NCLT, Ahmedabad) dismissing applications filed under Section 95 of the Insolvency and Bankruptcy Code (IBC) against personal guarantors on the ground of limitation. The essential facts are identical in both matters. The default occurred on 10 October 2017, and the ordinary three-year limitation period would have expired on 10 October 2020. However, during this period, the COVID-19 pandemic had already begun, and the Supreme Court had issued a series of orders in Suo Motu Writ Petition (Civil) No. 3 of 2020 extending limitation. The relevant order dated 10 January 2022 restored earlier extensions and directed that the period from 15 March 2020 to 28 February 2022 be excluded for computing limitation for all judicial or quasi-judicial proceedings. It also provided that if limitation expired during the excluded period, litigants would receive a fresh period of 90 days from 1 March 2022, or the balance period of limitation, whichever was longer.
The Adjudicating Authority acknowledged the Supreme Court’s order but concluded that only 90 days after 28 February 2022 were available to file proceedings under the IBC. Since the appellant filed the petitions on 17 August 2022—well beyond the 90-day window—the petitions were held time-barred and dismissed. These dismissal orders were challenged before the NCLAT.
