NEW DELHI MUNICIPAL COUNCIL versus MINOSHA INDIA LIMITED

Citation: [2022] 16 S.C.R. 1072 · Decided: 27-04-2022 · Supreme Court of India · Bench: K.M. JOSEPH · Disposal: Dismissed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 16 S.C.R.
NEW DELHI MUNICIPAL COUNCIL
v.
MINOSHA INDIA LIMITED
(Civil Appeal No. 3470 of 2022)
APRIL 27, 2022
[K.M. JOSEPH AND HRISHIKESH ROY, JJ.]
Insolvency and Bankruptcy Code, 2016 – Arbitration and
conciliation Act, 1996 – Limitation Act, 1963 – Limitation Period –
Insolvency – Appointment of Arbitrator – Freezing of limitation
during the moratorium period – Appellant (NDMC) placed a
purchase order with the Respondent (MIL) – Due to the failure on
part of the Respondent to perform its obligation as per the existing
agreement, NDMC terminated the agreement – On June 7, 2016,
the Respondent (MIL) issued the notice for commencement of the
arbitral proceeding as per the provisions provided under the A&C
Act, 1996 – Before the commencement of the arbitral proceedings,
insolvency proceedings started against the Respondent(MIL) on May
14, 2018 by the orders of NCLT – On November 28, 2019, the
Resolution Plan to resolve the insolvency of the Respondent was
sanctioned by the Tribunal – On the same  date i.e. November 28,
2019, the Respondent(MIL) filed an application for appointment of
the arbitrator before the High Court of Delhi as per s. 11(6) of the
1996 Act – The application for appointment of the arbitrator was
allowed by the High Court on December 14, 2020 – Appellant did
not raised any objection to the issue of limitation before the High
Court – Before the Supreme Court, the appellant (NDMC) contended
that the notice of commencement of the arbitration proceedings was
dated June 7, 2016 and the application for appointment of an
arbitrator has to be filed within the period of 3 years from the date
on which the notice of commencement of the arbitral proceedings
commenced – The application for appointment of arbitrator was
made by the respondent on November 28, 2019 which is beyond the
time period of three years – Also, the Respondent is not protected
by the moratorium imposed under Section 60(6) read with Section
14 of the IBC, 2016 (period of limitation) – Held: an application
   [2022] 16 S.C.R. 1072
1072
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under Section 7, 9 or 10, does bring in a period which is intended
to bring a corporate debtor back to life if possible, ‘a period of
calm’, in the words of the respondent – But this is a period during
which the management of the corporate debtor is displaced,
ironically, a period of turbulent churning – While it may be true
that proceedings by the corporate debtor through the resolution
professional is contemplated, it is not impossible to contemplate  that
the resolution professional for whatever reason it may be, does not
discharge his duties and conduct proceedings in all matters as he
should – This as can be the rationale for the Law Giver excluding
the period of limitation in regard to suits or applications at the
instance of the corporate debtor under Section 60(6) – In the instant
case, an order of Moratorium under Section 14, the entire period
of the Moratorium is liable to be excluded in computing the period
of limitation even in a suit or an application by a corporate debtor.
Dismissing the appeal, the Court
HELD: 1. The principles of interpretation of statutes have
been invoked in the varying contexts and are to be applied on
the basis of the facts of the case, the nature of the law and a host
of principles. Undoubtedly, the golden rule of interpretation is
the interpretation which thrives on the ordinary meaning of the
words as they are used. This principle of literal interpretation of
statutes has over a period of time indeed yielded to an
interpretation which is purposive or which seeks to accommodate
the object of the law giver. Suffice it to say that if the words of a
statute are not ambiguous, the scope of interpretation dwindles.
It is not for the Court to rewrite a statute. There may be occasions
where the Court may even go to the extent of leaving out a word
or not giving effect to certain part in order to give full meaning to
the law by way of gleaning and giving effect to the intention of the
legislature. [Para 19][1087-F-H; 1088-A-B]
2. No doubt, another principle, which has rightfully vied for
the Court’s approval in this regard, is that, an interpretation which
furthers the object and purpose of the law, must weigh with the
Court, the most. [Para 21][1088-G]
NEW DELHI MUNICIPAL COUNCIL v. MINOSHA INDIA
LIMITED
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3. Under Section 17, the management of the affair

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