1) CA Ramachandra Dallaram Choudhary (Liquidator) v. Adani Infrastructure & Developers Pvt. Ltd. (Judgement dtd. 1 June 2016)

Background of the case and Issue before the Court

The appeal was filed under Section 62 of the Insolvency and Bankruptcy Code, 2016 by the liquidator of the corporate debtor against an order of the NCLAT. The principal issue before the Supreme Court was whether the Supreme Court has jurisdiction to condone a delay beyond the maximum period prescribed under Section 62 of the IBC for filing an appeal against an NCLAT order.

Supreme Court’s Ruling

The Supreme Court dismissed the appeal as barred by limitation, reiterating that:

• Section 62 prescribes 45 days for filing an appeal before the Supreme Court.

• The Court may condone a delay of only up to 15 additional days on sufficient cause being shown.

• Once the total period of 60 days expires, the Supreme Court has no jurisdiction to entertain the appeal.

• The limitation prescribed under the IBC is mandatory and not merely directory.

The Court reiterated that the IBC is a time-bound legislation enacted to ensure expeditious insolvency resolution. It relied upon earlier landmark judgments and reaffirmed that statutory timelines under the Code cannot be diluted through judicial discretion.

The Supreme Court held that:

“The timelines under the Insolvency and Bankruptcy Code are sacrosanct. Courts cannot invoke equitable principles to extend limitation beyond the period expressly permitted by the statute.”

Practical Implications

The judgment has significant implications for stakeholders:

• Liquidators, Resolution Professionals, Financial Creditors and Operational Creditors must strictly adhere to statutory timelines.

• Delayed appeals cannot be revived through applications seeking condonation beyond the statutory limit.

• The decision reinforces the objective of ensuring certainty and finality in insolvency proceedings.

• Professionals should establish robust internal mechanisms for monitoring limitation periods, particularly in appellate proceedings.

2) Anjani Technoplast Ltd. v. Shubh Gautam

In a significant ruling, the Supreme Court reaffirmed the fundamental objective of the Insolvency and Bankruptcy Code, 2016 (IBC), by holding that the Code cannot be invoked as a substitute for execution proceedings or as a debt recovery mechanism. The judgment provides much-needed clarity on the maintainability of insolvency proceedings initiated on the basis of a money decree.

Background of the case and Issue before the Court

The respondent had advanced loans to Anjani Technoplast Ltd., which subsequently defaulted. After obtaining a money decree from the Delhi High Court, the respondent initiated a Section 7 application under the IBC instead of pursuing execution of the decree. While the NCLT dismissed the application, the NCLAT admitted it, relying on the Supreme Court’s decision in Dena Bank v. C. Shivakumar Reddy. The matter was subsequently challenged before the Supreme Court.

Supreme Court’s Decision

Allowing the appeal, the Supreme Court set aside the NCLAT’s order and restored the NCLT’s decision. The Court held that although a decree may provide a fresh cause of action for the purpose of limitation, it does not automatically entitle a decree holder to invoke the Corporate Insolvency Resolution Process (CIRP).

The Court observed that the respondent’s primary objective was recovery of decretal dues rather than resolution of insolvency. It reiterated that the IBC is intended to resolve genuine financial distress and revive viable businesses, and should not be used as a coercive tool for recovery of money.

Key Takeaways

• IBC is a resolution framework, not a debt recovery legislation.

• A money decree does not, by itself, justify initiation of CIRP under Section 7.

• Adjudicating Authorities must examine whether the insolvency process is being invoked for genuine resolution or merely to recover outstanding dues.

• Creditors should continue to pursue execution of decrees through the remedies available under the Code of Civil Procedure rather than using the IBC as an alternative enforcement mechanism.

This judgment reinforces the Supreme Court’s consistent view that the IBC should not be misused to pressurise solvent companies into payment of disputed or decretal claims. It strengthens the distinction between insolvency resolution and debt enforcement, thereby preserving the legislative intent of the Code and discouraging forum shopping.