Summary
NDMC challenged appointment of an arbitrator on the ground that the corporate debtor’s Section 11(6) application was time-barred. The Court held that Section 60(6) of the Insolvency and Bankruptcy Code excluded the entire period of the Section 14 moratorium when computing limitation for a suit or application by the corporate debtor, even though the moratorium did not prohibit that debtor from initiating proceedings. The appeal was dismissed; the separate question whether consent to appointment barred the limitation objection was left undecided.
Issues
- Whether a corporate debtor could exclude the moratorium period under Section 60(6) for its own arbitration-appointment application although Section 14 did not bar filing it.
Provisions considered
- Section 60(6), read with Section 14, Insolvency and Bankruptcy Code, 2016The entire moratorium period was excluded in computing limitation for the corporate debtor’s application; exclusion did not depend on the proceeding itself being prohibited by Section 14. (¶¶ 16-17, 24-28)
- Section 25(2)(b), Insolvency and Bankruptcy Code, 2016The resolution professional’s power to represent the debtor in proceedings did not eliminate the express statutory limitation exclusion. (¶¶ 5, 24-25)
Held
- Section 60(6) expressly covered any suit or application by or against the corporate debtor. The reference to an order of moratorium identified the prerequisite and the period to exclude, rather than limiting exclusion to proceedings independently stayed by Section 14. The entire period therefore applied to the debtor’s own Section 11(6) application. (¶¶ 25, 27-28)
- The absence of a bar on proceedings by the debtor, and the resolution professional’s power to pursue them, did not justify reading down the provision. The displacement of management and the practical demands of insolvency resolution supplied a rational setting for the exclusion even where proceedings could legally have been initiated. (¶ 24-25)
- Approval of the resolution plan did not defeat the exclusion. The statutory scheme preserved the ability to pursue legitimate claims with the moratorium period excluded from limitation computation; the Court could not substitute its assessment of legislative wisdom for the clear language. (¶ 26-27)
- Because the statutory exclusion answered the limitation challenge, it was unnecessary to decide whether NDMC’s consent to appointment separately prevented it from raising limitation. (¶ 29)
Result
Appeal dismissed without costs, leaving the arbitrator’s appointment undisturbed. The effect of consent on the right to raise the limitation objection was expressly left undecided.