2017 (6) TMI 1294 - HC - Companies Law

Grant of interim stay - Right of appeal - National Company Law Appellate Tribunal is currently in the midst of its summer vacation and it re-opens only on 03.07.2017 - appellant submitted that if the order of the Adjudicating Authority is implemented, the petitioner would be put to prejudice and hardship, since they will lose the right of appeal under Section 61 of the Code in the absence of the Tribunal functioning during the summer vacation - HELD THAT - There shall be an order of interim stay till 05.07.2017. It is also made clear that the petitioner shall file an appeal under Section 61 of the Code before the Tribunal in accordance with law.

Summary

Issues:
Challenge to order of National Company Law Tribunal (NCLT) | Entertaining Writ Petition due to Tribunal's vacation | Appointment of Interim Insolvency Professional causing prejudice to petitioner's appeal rights

Analysis:
The Writ Petition was filed against the order of the National Company Law Tribunal (NCLT) dated 13.06.2017. The petitioner's counsel highlighted that the National Company Law Appellate Tribunal was closed for summer vacation until 03.07.2017, preventing the petitioner from appealing under Section 61 of the Insolvency and Bankruptcy Code, 2016. Citing precedents, the counsel argued for the Court's intervention based on the interest of justice to prevent a miscarriage of justice when the aggrieved party is unable to appeal due to the Tribunal's closure.

The counsel further emphasized that the appointment of an Interim Insolvency Professional by the Adjudicating Authority, as per the impugned order, would cause prejudice and hardship to the petitioner by depriving them of their appeal rights under Section 61 of the Code, especially during the Tribunal's vacation period. In light of these submissions, the Court, following the precedent cited by the counsel, ordered an interim stay until 05.07.2017. The Court directed the petitioner to file an appeal under Section 61 of the Code before the Tribunal within the stipulated time frame, ensuring compliance with the law and preserving the petitioner's right to appeal.

This judgment showcases the Court's willingness to intervene in exceptional circumstances, such as the Tribunal's closure during vacation, to prevent injustice and uphold the rights of the parties involved. By granting an interim stay and mandating the petitioner to pursue the appeal process once the Tribunal reopens, the Court ensures that the petitioner's legal remedies are safeguarded despite the temporary unavailability of the appellate authority.