Delhi High Court
Reliance Communications ... vs Bharat Sanchar Nigam Limited on 9 February, 2021
$~13
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on 9th Febr uar y, 2021
+ O.M.P.(MISC.) (COMM.) 277/2020
RELIANCE COMMUNICATIONS
INFRASTRUCTURE LIMITED ..... Petitioner
Through: Mr. Gauhar Mirza, Mr. Prakhar
Deep and Mr. Nishant Doshi,
Advs.
versus
BHARAT SANCHAR NIGAM LIMITED ..... Respondent
Through: Mr. Nalin Tripathi, Adv.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
J UDGEMENT (ORAL)
% 09.02.2021
(Video-Conferencing)
1. This petition is in the nature of an application under Section
29A (5) of the Arbitration and Conciliation Act, 1996 (hereinafter
referred to as "the 1996 Act"), and has been filed by Mr. Anish
Niranjan Nanavaty, who claims to be an Interim Resolution
Professional (IRP), appointed by the National Company Law Tribunal
(hereinafter referred to as "NCLT"), vide order dated 25th September,
2019, to oversee the affairs of M/s. Reliance Communications
Signature Not Verified
Digitally Signed
O.M.P.(MISC.) (COMM.) 277/2020 Page 1 of 15
By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
Infrastructure Limited (hereinafter referred to as "the Company"), in
terms of the Insolvency and Bankruptcy Code, 2016 (IBC). Mr.
Mirza, learned counsel for the petitioner, submits that subsequently,
vide a resolution of the Committee of Creditors (CoC) of the
Company, passed on 22nd October, 2019, the petitioner was appointed
as Resolution Professional (RP) in respect of the Company.
3. Admittedly, arbitral proceedings, between the petitioner and the
respondent, were continuing before a three-member Arbitral Tribunal,
and have yet to conclude. The mandate of the learned Arbitral
Tribunal has, in the interregnum, expired. The petitioner has, in these
circumstances, invoked Section 29A(5) of the 1996 Act, by means of
the present petition, seeking extension of the mandate of the learned
Arbitral Tribunal to conclude the arbitral proceedings and render
award.
4. A reply to the present petition has been filed by the respondent,
which is represented by Mr. Nalin Tripathi, learned counsel. Mr.
Tripathi, essentially, questions the competence of the petitioner, as
RP, to file the present petition on behalf of the company. Reliance has
been placed, for this submission, on Section 12 of the IBC, which
reads thus:
"12. Time-limit for completion of insolvency resolution
process -
(1) Subject to sub-section (2), the corporate
insolvency resolution process shall be completed
within a period of one hundred and eighty days from
the date of admission of the application to initiate such
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By:SUNIL SINGH NEGI
Signing Date:10.02.2021
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process.
(2) The resolution professional shall file an
application to the Adjudicating Authority to extend the
period of the corporate insolvency resolution process
beyond one hundred and eighty days, if instructed to
do so by a resolution passed at a meeting of the
committee of creditors by a vote of sixty-six per cent
of the voting shares.
(3) On receipt of an application under sub-section
(2), if the Adjudicating Authority is satisfied that the
subject matter of the case is such that corporate
insolvency resolution process cannot be completed
within one hundred and eighty days, it may by order
extend the duration of such process beyond one
hundred and eighty days by such further period as it
thinks fit, but not exceeding ninety days:
Provided that any extension of the period of corporate
insolvency resolution process under this section shall
not be granted more than once."
5. Mr. Tripathi submits that a strict regimen is stipulated in
Section 12 of the IBC, with the resolution process requiring to be
completed within 180 days under sub-section (1) thereof and in
default, an application to be filed by the RP, under subsection (2),
seeking extension of time. In the present case, he submits, such an
application was filed by the RP, being IA 941/2020, whereon the
learned NCLT, vide order dated 19th March, 2020, extended the
Corporate Insolvency Resolution Period (CIRP) by 90 days,
commencing 24th March, 2020. Even so reckoned, submits Mr.
Tripathi, the authority of Mr. Anish Niranjan Nanavaty to continue as
RP expired on 22nd June, 2020. He submits that no second extension
could be granted to the RP, in view of the first proviso to Section
12(3) of the IBC.
Signature Not Verified
Digitally Signed
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By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
6. In response, Mr. Mirza, learned Counsel for the petitioner, has
placed on record an order dated 30th March, 2020, passed by the
learned National Company Law Appellate Tribunal (hereinafter
referred to as "the learned NCLAT") in Suo Motu Company Appeal
(AT) (Insolvency) No. 1 of 2020, which reads thus:
"Upon requests for urgent listing of cases having been made
telephonically to Registrar of this Appellate Tribunal from
various persons, who were unable to physically file the same
on account of complete lockdown declared by Government
with effect from 25th March, 2020, we take suo moto
cognizance of the unprecedented situation arising out of
spread of COVID19 virus declared a pandemic. Having
regard to the hardships being faced by various stakeholders as
also the legal fraternity, which go beyond filing of
Appeals/cases, which has already been taken care of by the
Hon'ble Apex Court by extending the period of limitation
with effect from 15th March, 2020 till further order/s in terms
of order dated 23rd March, 2020 in Suo Motu Writ Petition
(Civil) No(s).03/2020, inasmuch as certain steps required to
be taken by various Authorities under Insolvency and
Bankruptcy Code, 2016 or to comply with various provisions
and to adhere to the prescribed timelines for taking the
'Resolution Process' to its logical conclusion in order to
obviate and mitigate such hardships, this Appellate Tribunal
in exercise of powers conferred by Rule 11 of National
Company Law Appellate Tribunal Rules, 2016 r/w the
decision of this Appellate Tribunal rendered in "Quinn
Logistics India Pvt. Ltd. vs. Mack Soft Tech Pvt. Ltd. in
Company Appeal (AT) (Insolvency) No.185 of 2018"
decided on 8th May, 2018 do hereby order as follows: -
(1) That the period of lockdown ordered by the
Central Government and the State Governments
including the period as may be extended either in
whole or part of the country, where the registered
office of the Corporate Debtor may be located, shall be
excluded for the purpose of counting of the period for
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By:SUNIL SINGH NEGI
Signing Date:10.02.2021
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'Resolution Process under Section 12 of the
Insolvency and Bankruptcy Code, 2016, in all cases
where 'Corporate Insolvency Resolution Process' has
been initiated and pending before any Bench of the
National Company Law Tribunal or in Appeal before
this Appellate Tribunal.
(2) It is further ordered that any interim order/ stay
order passed by this Appellate Tribunal in anyone or
the other Appeal under Insolvency and Bankruptcy
Code, 2016 shall continue till next date of hearing,
which may be notified later.
A copy of this order be communicated to Registrar of
National Company Law Tribunal, New Delhi with a request
to circulate the same to all Benches of NCLT across the
country including the Principal Bench based at Delhi.
A copy of this order be also communicated to Secretary,
Ministry of Corporate Affair, New Delhi for information and
compliance by various Authorities under its control."
7. In conjunction with the aforesaid order of NCLAT, Mr. Mirza
invites my attention to various orders, passed by the Government of
Maharashtra, where the registered office of the Company is situate,
which indicate that the period of lockdown in Maharashtra stands
extended till 31st March, 2021. The last order dated 29th December,
2020 passed by the Chief Secretary, Government of Maharashtra reads
thus:
"GOVERNMENT OF MAHARASHTRA
Department of Revenue and Forest, Disaster
Management,
Relief and Rehabilitation, Mantralaya, Mumbai- 400 032
No: DMU/2020/CR. 92/DisM-l, Dated: 29th December,
2020
ORDER
Easing of Restrictions and Phase-wise opening of
Lockdown. (MISSION BEGIN AGAIN)
Signature Not Verified
Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
...........................................................................
Reference:
1) The Epidemic Diseases Act, 1897.
2) The Disaster Management Act, 2005
3) Revenue and Forest. Disaster Management. Relief and
Rehabilitation Department Order No. DMU-
2020/C.R.92/DMU-l, dated 2nd May 2020, 3rd May 2020, 5th
May 2020, 11th May 2020, 1st May 2020, l7th May 2020, 19th
May 2020, 21st May 2020, 31st May 2020, 4th June 2020, 25th
June 2020, 29th June 2020, 6th July 2020, 7th July 2020, 29th
July 2020, 4th August 2020, 19th August 2020, 31st August
2020, 30th September 2020, 14th October 2020, 23rd October
2020, 29th October 2020, 3rd November 2020 , 14th November
2020, 23rd November 2020, 27th November, 2020, 21st
December 2020, 24th December, 2020.
4) Ministry of Home Affairs (MHA) Order No. 40-
3/2020-PM-1 (A) Dated 1st May 2020, 11th May 2020, 17th
May 2020, 20th May 2020, 30th May 2020, 29th June 2020,
29th July 2020, 29th August 2020, 30th September 2020, 27th
October 2020 and 25th November 2020 and 28th December,
2020.
Whereas, in exercise of the powers, conferred under the
Disaster Management Act 2005, the undersigned, in his
capacity as Chairperson, State Executive Committee has
issued an Order dated 30th September, 2020 and 14th October,
2020 (extended by order dated 29th October, 2020 and 27th
November, 2020) for containment of COVD-19 in the State,
for a period upto 31st December, 2020 and issued revised
guidelines by including certain activities from time to time
vide above mentioned orders.
Whereas the State Government is satisfied that the State of
Maharashtra is threatened with the spread of COVID-19
virus, and therefore to take certain emergency measures to
prevent and contain the spread of virus, the Government in
exercise of the powers conferred under Section 2 of the
Epidemic Diseases Act, 1897, read with all other enabling
provisions of The Disaster Management Act, 2005, it is
expedient to extend the lockdown in the entire State of
Maharashtra further till 31st January, 2021.
Signature Not Verified
Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
Now, therefore, in exercise of the powers conferred under
Section 2 of the Epidemic Diseases Act, 1897 and the powers
conferred under The Disaster Management Act, 2005, the
undersigned, in his capacity as Chairperson, State Executive
Committee, hereby issues directions that the guidelines issued
vide orders dated 30th September, 2020 and 14th October,
2020 (extended by order dated 29th October, 2020 and 27th
November, 2020) to operationalize MISSION BEGIN
AGAIN for easing of restrictions and phase-wise opening,
will remain in force till 31st January, 2021 for containment of
COVID-19 epidemic in the State and all Departments of
Government of Maharashtra shall strictly implement these
guidelines. The activities already allowed and permitted from
time to time shall be continued and all earlier orders shall be
aligned with this order and shall remain in force up to 31st
January, 2021.
BY ORDER AND IN THE NAME OF THE GOVERNOR
OF MAHARASHTRA
Sd.
(SANJA Y KUMAR)
CHIEF SECRETARY
GOVERNMENT OF MAHARASHTRA"
8. Mr. Tripathi, learned counsel appearing for the respondent,
disputes the contention of Mr. Mirza that the lockdown in Maharashtra
is continuing till 31st January, 2021 and relies on order dated 31st
August, 2020, passed by the Government of Maharashtra, which reads
thus:
"GOVERNMENT OF MAHARASHTRA
Department of Revenue and Forest, Disaster
Management,
Relief and Rehabilitation, Mantralaya, Mumbai- 400 032
No: DMU/2020/CR. 92/DisM-1, Dated: 31st August, 2020
ORDER
Signature Not Verified
Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
Easing of Restrictions and Phase-wise opening of
Lockdown. (MISSION BEGIN AGAIN)
...........................................................................
Reference:
I) The Epidemic Diseases Act, 1897.
2) The Disaster Management Act, 2005
3) Revenue and Forest. Disaster Management. Relief and
Rehabilitation Department Order No. DMU-
2020/C.R.92/DMU-l, dated 2 May 2020, 3 May 2020, 5th
nd rd
May 2020, 11th May 2020, 1st May 2020, l7th May 2020, 19th
May 2020, 21st May 2020, 31st May 2020, 4th June 2020, 25th
June 2020, 29th June 2020, 6th July 2020, 7th July 2020, 29th
July 2020, 4th August 2020 and 19th August 2020.
4) Ministry of Home Affairs (MHA) Order No. 40-
3/2020-PM-1 (A) Dated 1st May 2020, 11th May 2020, 17th
May 2020, 20th May 2020, 30th May 2020, 29th June 2020,
29th July 2020 and 29th August 2020.
Whereas, in exercise of the powers, conferred under the
Disaster Management Act 2005, the undersigned, in his
capacity as Chairperson, State Executive Committee has
issued an Order dated 29th July, 2020 to extend the lockdown
measures up to 31st August, 2020 and issued revised
consolidated guidelines from time to time vide above
mentioned orders to contain the spread of COVID-19.
Whereas the State Government is satisfied that the State of
Maharashtra is threatened with the spread of COVID-19
virus, and therefore to take certain emergency measures to
prevent and contain the spread of virus, the Government in
exercise of the powers conferred under Section 2 of the
Epidemic Diseases Act, 1897, read with all other enabling
provisions of The Disaster Management Act, 2005, it is
expedient to extend the lockdown in the entire State of
Maharashtra further till midnight of 30th September, 2020.
Now, therefore, in exercise of the powers conferred under
Section 2 of the Epidemic Diseases Act, 1897 and the powers
conferred under The Disaster Management Act, 2005, the
undersigned, in his capacity as Chairperson, State Executive
Signature Not Verified
Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
Committee, hereby issues directions to extend the lockdown,
with amendments, to operationalize MISSION BEGIN
AGAIN for easing of restrictions and phase-wise opening,
will remain in force till 30th September, 2020 for containment
of COVID-19 epidemic in the State and all Departments of
Government of Maharashtra shall strictly implement the
guidelines issued earlier from time to time.
It is directed that the National Directives for COVID-19
management as specified in Annexure I shall be followed
throughout the State. The activities already allowed and
permitted from time to time and as mentioned in Annexure II
shall be continued and all earlier orders shall be aligned with
this order and shall remain in force up to and inclusive of 30th
September, 2020. Further easing under MISSION BEGIN
AGAIN will be notified in the due course.
Any person violating these measures will be liable to be
proceeded against as per the provisions of Section 51 to 60 of
the Disaster Management Act, 2005 besides legal action
under section 188 of the IPC, and other legal provisions as
applicable. Extracts of these penal provisions are at
Annexure III.
BY ORDER AND IN THE NAME OF THE GOVERNOR
OF MAHARASHTRA
Sd.
(SANJA Y KUMAR)
CHIEF SECRETARY
GOVERNMENT OF MAHARASHTRA"
9. Mr Tripathi submits that the lockdown in the State of
Maharashtra could not be said to be continuing, in its complete form
as initially enforced, till 31st January, 2021. He submits that several
officers are working, and that the Government of Maharashtra has also
implemented, to a great extent, the 'work from home policy'. He also
seeks to point out that the Mumbai Bench of the NCLT is also
functioning.
Signature Not Verified
Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
10. Mr. Tripathi further submits that extension of time for
completion of the CIRP cannot be automatically assumed, but that a
clear statutory procedure, in that regard, stands prescribed by Section
12(2) IBC. He submits that this procedure has not been followed by
the RP and that, therefore, he cannot claim that his mandate stands
automatically extended. He, therefore, reiterates his submission that
the petition is itself not maintainable at the instance of Mr. Anish
Niranjan Nanavaty, who claims to be the RP of the Company.
11. In my view, it is not necessary for this Court, while exercising
its jurisdiction under Section 29A(5) of the 1996 Act, to enter into this
controversy in detail, to the extent to which Mr. Tripathi would exhort
examination. A reading of the order dated 30th March, 2020 (supra)
passed by the NCLAT in Suo Motu Company Appeal (AT)
(Insolvency) No. 1 of 2020, read with the order dated 29th December,
2020, passed by the Government of Maharashtra, indicates that, to one
extent or the other, a lockdown is, prima facie, continuing in the said
State. As to whether, seen in the backdrop of the order dated 31st
August, 2020 (supra) of the State of Maharashtra, on which Mr.
Tripathi places reliance, Mr. Anish Niranjan Nanavaty would be
entitled to continue as Resolution Professional on the strength of para
1 of the order dated 30th March, 2020 (supra) of the NCLAT, is an
involved issue which, in my view, is not required to be examined by
this Court in exercising jurisdiction under Section 29A(5) of the 1996
Act. Suffice it to state that it cannot be said, on a plain reading, that
the present petition, at the instance of Mr. Anish Niranjan Nanavaty, is
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By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
not maintainable, or that it should be thrown out on that ground.
12. That there is an arbitral proceeding ongoing between the
Company and the respondent, is not denied. Mr. Tripathi has not been
able to afford any other sustainable ground, as to why the mandate of
the learned Arbitral Tribunal should not be continued, as prayed in the
petition.
13. In fact, a reading of the counter affidavit filed by the BSNL,
indicates that the learned Arbitral Tribunal is also conscious of the
pendency of the CIRP proceedings pending before the NCLT, and the
question of whether the mandate of the Arbitral Tribunal still
continues in view of the said proceedings. It appears that, on 3rd
October, 2020, the learned Arbitral Tribunal had directed the parties to
intimate the learned Arbitral Tribunal whether, in view of the
provision of the IBC and the 1996 Act, the learned Arbitral Tribunal
was authorised to proceed with the matter. The parties were also
requested to place, on record, the orders passed by the NCLT, in that
regard, as well as the decision taken by RP for reviving the arbitration
case. The fact that the petitioner was approaching this Court under
Section 29A(5) of the 1996 Act also stands noticed by the learned
Arbitral Tribunal in its order dated 27th October, 2020. The email,
dated 12th November, 2020, of the Hon'ble Presiding Arbitrator, reads
thus:
"From: Ananga Patnaik
To: Mirza Gauhar
Cc:[email protected];[email protected];
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Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
[email protected];legalntlaw®yahoo.com;
[email protected]; [email protected]; Karia Tejas;
Katoch Pavit Singh; Mishra Shashank; Deep Prakhar
Subject: Re: RCTL vs. BSNL -Arbitration- Before the Ld.
Tribunai- Justice ( Retd.) A.K. Patnaik, Justice {Retd.) V.V.S.
Rao and Mr. T.N. Tiwari
Thursday, 12 November 2020 7:00:09 PM
12th November 2020
Dear All,
Please refer to the email dated 27th October 2020 sent on
behalf of the Claimant Reliance Communication
Infrastructure Limited.
In this email, it is stated that under Section 14(1) (a) of
the IBC Code there is a moratorium prohibiting an arbitration
against the Corporate Debtor namely Reliance
Communication Infrastructure Limited but there is no
moratorium in the arbitral proceedings in which the Corporate
Debtor is the Claimant and as there is no counterclaim filed
by the Respondent (BSNL) against the Claimant the
arbitration proceedings can continue.
In this email, it is also stated that as the registered
office of the Claimant and the Resolution Professional are
situated in Mumbai where the lockdown situation still
continues, the time period as stipulated in Section 29A of the
Arbitration and Conciliation Act, 1996 for making the award
stands extended by virtue by the orders passed by the Hon'ble
Supreme Court from time to time.
In this email, it is however stated that by abundant
caution the Claimant and the Resolution professional shall
also approach the Hon'ble Delhi High Court under Section
29A of the Arbitration and Conciliation Act, 1996 seeking
extension of time in making the award and that in the
meanwhile the arbitral Tribunal could fix a case management
hearing through video conferencing.
The second proviso under Section 29A(4) inserted by
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By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
the arbitration and Conciliation (Amendment) Act 2019 states
that where any application under the Section 29A(5) for
extension of time for the award is pending, the mandate of the
arbitrator shall continue till disposal of the application by the
High Court. Hence, the Claimant and the Resolution
Professional are requested to make the application for
extension before the Hon'ble High Court and intimate the
arbitral Tribunal that such an application has been filed giving
the particulars of such application. As soon as the arbitral
Tribunal receives this intimation, it will fix a date and time
for case management hearing of the arbitration case after
finding out the convenience of all concerned.
With regards
Sd./-
AK. Patnaik
(Presiding Arbitrator)"
14. Section 29A(5) of the 1996 Act merely authorizes the Court to
extend the mandate of the Arbitral Tribunal, on its expiry without
completion of the arbitral proceedings. It is, no doubt, open to the
respondent to question the maintainability of the petition preferred
under Section 29A(5). Mr Tripathi has done so and, as opined
hereinabove, the challenge fails to impress. All other issues, regarding
the competence of the RP to represent the petitioner in the arbitral
proceedings, or the impact, on the arbitral proceedings, of the
proceedings pending before the learned NCLT or NCLAT, and the
orders passed therein, would appropriately have to be addressed before
the learned Arbitral Tribunal, and not before this Court, exercising
jurisdiction under Section 29A(5).
15. Mr. Tripathi also seeks to submit, at this juncture, that the
resolution dated 31st October, 2019 of the CoC of the Company, does
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By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
not authorise the RP either to file the present petition or apply for
extension of the mandate of the learned Arbitral Tribunal.
16. Mr. Mirza, learned counsel for the petitioner, contends, per
contra, that the authority of the Resolution Professional extends to
seeking extension of the mandate of the Arbitral Tribunal as well as to
filing of the present petition.
17. To my mind, the submission merely requires to be stated, to be
rejected. Para 4 of the resolution clearly approves the appointment of
Mr. Anish Niranjan Nanavaty as the Resolution Professional. Mr.
Tripathi has not been able to show me any provision in the IBC, which
limits the authority of the Resolution Professional and does not
authorize the Resolution Professional, overseeing the affairs of the
Company, to apply for extension of the mandate of the Arbitral
Tribunal or file the present petition.
18. In view thereof, this objection of Mr. Tripathi, is rejected.
19. This Court, therefore, deems it appropriate to extend the
mandate of the learned Arbitral Tribunal, as prayed in the petition, by
a period of 12 months, with effect from 8th September, 2020. While
doing so, this Court makes it clear that this Court has not expressed
any final opinion on the proceedings before the IBC, the authority of
Mr. Anish Niranjan Nanavaty as RP of the Company, or the effect on
the arbitral proceedings, of the proceedings pending before the NCLT.
All these aspects are left open and the learned Arbitral Tribunal would
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By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
be at liberty to take a decision, as it deems appropriate after hearing
the parties in that regard.
18. With the aforesaid caveat, the present petition stands allowed in
the above terms.
C. HARI SHANKAR, J.
FEBRUARY 9, 2021
r.bararia
Signature Not Verified
Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:10.02.2021
19:18:05
