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SSrana Newsletter 2021 Issue 10

May 19, 2021

SPIKE IN COVID CASES- SUPREME COURT EXTENDS LIMITATION PERIOD.

coronavirus5
In the wake of recent unprecedented spike in COVID cases in the past few weeks, the Hon’ble Supreme Court of India vide its order dated April 27, 2021 has restored the order dated March 23, 2020.

SC on Binding Nature of an approved Resolution Plan.

IBBI
The Hon’ble Supreme Court in its recent judgement while emphasising on aim of the IBC,2016 i.e., to economically rehabilitate the Corporate Debtor, deliberated on the finality of a Resolution Plan, approved by the Adjudicating Authority i.e. NCLT and its binding nature on all its creditors and quite exponentially gave clarity on the position of the Central and State Government amongst the list of creditors.

Permission to Import Medical Devices and Mandatory Declarations u/Legal Metrology.

Medical
The Ministry of Consumer Affairs, Food and Public Distribution has issued a notification dated April 28, 2021 to the Director General, Foreign Trade and Controllers of Metrology permitting the importers of medical devices to import the listed medical devices for three months from the date of the advisory

Drone Flight Delivery of Covid-19 Vaccines.

Medical
As the pandemic continues to engulf the entire nation, the increased demand, supply and distribution of COVID-19 vaccines is a matter of crucial concern and resort to technological advancements for implementing the same is indeed the need of the hour.

SC QUESTIONS CENTRE’S PRICING POLICY OF COVID VACCINE.

Medical
With India facing an unprecedented rise in daily number of Covid positive cases, the Supreme Court in a suo moto Writ Petition titled In Re: Distribution Of Essential Supplies and Services During Pandemic[1] sought for an explanation from the Central Government regarding the rationale behind the pricing of Covid vaccines.


SPIKE IN COVID CASES- SUPREME COURT EXTENDS LIMITATION PERIOD.

coronavirus5

In the wake of recent unprecedented spike in COVID cases in the past few weeks, the Hon’ble Supreme Court of India vide its order dated April 27, 2021 has restored the order dated March 23, 2020[1] and has directed that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders[2].

It would be relevant to mention here that the Supreme Court last year in March in view of the onset of the pandemic had suo moto had extended the period of calculating limitation w.e.f. March 15, 2020 till further orders and as the lockdown kept on extending, so did the limitation period[3].

Later, in view of decline witnessed in COVID-19 cases in India, the Supreme Court on  March 08, 2021 had finally disposed off the suo moto proceedings and excluded the period from March 15, 2020 till March 14, 2021 for calculating the period of limitation.[4]

Supreme Court’s Order of April 27, 2021

However, the situation in the past few weeks saw a drastic rise in Covid-19 cases leading to lockdown again being imposed in several parts of India. Resultantly, the Supreme Court Advocates on Record Association (SCAORA) filed an application seeking the revival of the first suo moto order passed by the Hon’ble Supreme Court which had extended the period of limitation with effect from March 15, 2020 till further orders (which ultimately ended on March, 14, 2021).

The Hon’ble Court while hearing the application remarked that the Covid-19 second wave has created an “alarming situation” and thereby has put the litigants in a “difficult situation”.

Hence, in view of the second wave of the Covid-19 pandemic, the Court has now ordered to extend the Limitation Period for filing Cases under all general and special laws across the country until further orders.

Thus, all limitation period which had already ended on March 14, 2021 will be extended until further orders.

Period of Limitation extension- Supreme Court- Timeline

S No. Order date  Extension of Limitation Period
1 March 23, 2020 of Suo Motu Writ (Civil) No(s).3/2020 From March 15, 2020 till further order/s
2 March 08, 2020 of Suo Motu Writ (Civil) No(s).3/2020 Ended on March 14, 2021
3 April 27, 2021  From March 14, 2021 till further orders

Conclusion

In view of the aforesaid, the period of limitation in all the cases in all the Courts/ tribunals which was to excluded from March 15, 2020 till  March 14, 2021, will now be excluded till the time any further orders are passed by the Hon’ble Supreme Court.

The Apex Court’s order comes as a much needed relief to all the litigants who were in the process of filing their cases however were facing hardships in filing due to the spike in Covid-19 cases and subsequent lockdown in various parts of the country.

Related Posts

End of Extension of Limitation Period during COVID-19- Supreme Court

SC’s order extending limitation doesn’t enlarge period upto which delay can be condoned

Limitation Period under Arbitration and Negotiable Instrument Act extended- SC

[1] The Apex Court vide its order dated March 23, 2020 had directed that the period of limitation in filing petitions/ applications/ suits/ appeals/ all other proceedings, irrespective of the period of limitation prescribed under the general or special laws, shall stand extended with effect from March 15, 2020 till further orders.

[2] https://main.sci.gov.in/supremecourt/2021/10651/10651_2021_31_1_27776_Order_27-Apr-2021.pdf

[3] https://ssrana.in/articles/supreme-court-extends-period-of-limitation-covid/

[4] https://ssrana.in/articles/end-of-extension-of-limitation-period-during-covid-19-supreme-court/


 


SC on Binding Nature of an approved Resolution Plan.

IBBI

By Nihit Nagpal and Devika Mehra

The Hon’ble Supreme Court in its recent judgement while emphasising on aim of the IBC,2016 i.e., to economically rehabilitate the Corporate Debtor, deliberated on the finality of a Resolution Plan, approved by the Adjudicating Authority i.e. NCLT and its binding nature on all its creditors and quite exponentially gave clarity on the position of the Central and State Government amongst the list of creditors.

Any creditor, including Central/State Government or any local authority, is bound by Resolution Plan as approved by Adjudicating Authority

In a recent judgment of Ghanshyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Limited, (Civil Appeal No.8129/2019)[1], on April 13, 2021, the Hon’ble Supreme Court held that any creditor, including Central/State Government or any local authority, is bound by Resolution Plan as approved by Adjudicating Authority under Section 31(1) of the Insolvency and Bankruptcy Code, 2016. It also further held that the Central and State Government or any local authority to which operational debt is owed shall be an “Operational Creditor” vis-à-vis that Company.

What transpired in the above case is that the State Bank of India (“Financial Creditor”) under Section 7 of IBC filed an application before the National Company Law Tribunal, Kolkata Bench, against the Orissa Manganese & Minerals Limited (“Corporate Debtor”) which is a company, engaged in the business of mining iron ore, graphite, manganese ore and agglomerating iron fines into pellets.

The Hon’ble NCLT through its Order dated August 03, 2017 admitted the Company Petition and thereafter, subsequently a Resolution Professional (“RP”) was appointed. The RP initiated the resolution process in accordance with the provisions of the IBC, 2016. During the process three resolution plans were received, each from Edelweiss Asset Reconstruction Company Limited (EARC), Respondent No.1, Orissa Mining Private Limited, and Ghanashyam Mishra & Sons Private Limited, the Appellant, respectively. The Hon’ble NCLT  by an elaborate order dated   22.6.2018 approved the Resolution Plan of GMSPL, which was duly approved by CoC by a voting share of more than 89.23%.

The NCLAT, vide its Order dated 23.04.2019 held that the Resolution Plan of GMSPL (Ghanshyam Mishra and Sons Pvt. Ltd.) is better than the other Applicants. However, NCLAT observed that the claims of the parties, which are not included in the Resolution Plan could be agitated by them before respective forums. Consequently, GMSPL filed an Appeal before the Supreme Court against the NCLAT Order dated 23.04.2019 with respect to the observation made in the Impugned Order. Inter-alia, the following issues were framed:

  1. Whether any creditor including the Central Government, State Government or any local authority is bound by the Resolution Plan once it is approved by NCLT under Section 31(1) of the IBC, 2016?
  2. Whether after approval of Resolution Plan by the NCLT, a creditor including the Central Government, State Government or any local authority is entitled to initiate any proceedings for recovery of any of the dues from the Corporate Debtor, which are not a part of the Resolution Plan approved by the NCLT?

The Supreme Court while dealing with the aforementioned issues observed and held in the following manner:-

1) That the Government is covered under the definition of the ‘Creditor’ under IBC. The Court through the harmonious constructions of definitions of the Operational Creditor[2], Operational debt[3], and Creditor[4] observed that even a claim in respect of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority would come within the ambit of ‘Operational Debt’.

2) That the operational debt owed to Central Government, any State Government or any local authority would come within the ambit of ‘Operational Creditor’. Similarly, a person to whom a debt is owed would be covered by the definition of ‘creditor’.

3) It further observed that the claims as mentioned in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders, once a resolution plan is duly approved by the NCLT under Section 31(1) of the IBC.

4) Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 cannot be continued.

5) The Court further observed that the Section 31 Amendment of the IBC is “clarificatory and declaratory in nature” and therefore will come into effect from the date from which the Insolvency & Bankruptcy Code came into effect.

Conclusion:

The objective behind the Insolvency & Bankruptcy Code was to permit a restructuring process enabling the liability of corporate debtor to be reset, in order to enable new management to begin with a clean slate thus allowing for the revival of the corporate debtor’s business. This decision of the Supreme Court furthers the Objectives of IBC, which it originally was set out to achieve.

Related Posts

Interim Resolution Professional in CIRP

India: NCLT accepts first Resolution Plan

[1] 22323_2019_33_1501_27518_Judgement_13-Apr-2021.pdf (sci.gov.in)

[2] Section 5(20) of IBC

[3] Section 5(21) of IBC

[4] Section 3(10) of IBC


 


Permission to Import Medical Devices and Mandatory Declarations u/Legal Metrology.

Medical

The Ministry of Consumer Affairs, Food and Public Distribution has issued a notification dated April 28, 2021 to the Director General, Foreign Trade and Controllers of Metrology permitting the importers of medical devices to import the listed medical devices for three months from the date of the advisory[1]. The permission to import the medical devices is subject to the condition that the importers shall make all declarations required under Legal Metrology (Packaged Commodities) Rules, 2011 immediately after import/ custom clearance and before sale.

Medical Devices Allowed for Import

  1. Nebulizers,
  2. Oxygen concentrators,
  3. Continuous positive airway pressure (CPAP) devices,
  4. Bilevel positive airway pressure (BIPAP) devices]
  5. Oxygen concentrator along with flow meter, regulator, connectors and tubing
  6. Vacuum Pressure Swing Absorption (VPSA) and Pressure Swing Absorption (PSA) oxygen plants, Cryogenic Oxygen Air Separation Units (ASUs) producing liquid/ gaseous oxygen
  7. Oxygen Cannister
  8. Oxygen Filling Systems
  9. Oxygen cylinders including cryogenic cylinders
  10. Oxygen Generators
  11. Parts to be used for the manufacture of equipment for production transportation distribution or storage of Oxygen ‘ ‘
  12. Any other device from which Oxygen can be generated
  13. Ventilators (capable of functioning as high-flow devices) with nasal canula; Compressor including all accessories and tubing; humidifiers and Viral filters
  14. High flow nasal canula device with all attachments
  15. Helmets for use with non-invasive ventilation
  16. Non-invasive ventilation oronasal masks for ICU ventilators
  17. Non-invasive ventilation nasal masks for ICU ventilators

The mandatory declarations on these medical devices can be made by way of stamping or putting sticker or online printing.

While the entire nation is battling the pandemic and the demand for medical devices is increasing day-by-day, the permission issued by the Ministry for import of medical devices is a welcome move and is a huge sigh of relief when an acute shortage of medical devices has made people helpless and led to the death of several countrymen. However, while importing the medical devices, the importers shall adhere to the provisions of mandatory declarations required under the provisions of the Legal Metrology (Packaged Commodities) Rules, 2011.

To know more about the mandatory declarations made under the Legal Metrology (Packaged Commodities) Rules, 2011, click here.

Also read- Medical Devices Manufacturing- India

[1] https://consumeraffairs.nic.in/sites/default/files/file-uploads/latestnews/Permission%20for%20medical%20devices%20due%20to%20prevelent%20sutuation%20of%20Covid%2019.pdf
 

Drone Flight Delivery of Covid-19 Vaccines.

fake

As the pandemic continues to engulf the entire nation, the increased demand, supply and distribution of COVID-19 vaccines is a matter of crucial concern and resort to technological advancements for implementing the same is indeed the need of the hour.

In a noteworthy move, the Ministry of Civil Aviation (MoCA) & Directorate General of Civil Aviation (DGCA) vide its order dated May 7, 2021 has granted extension for conditional exemption to the Government of Telangana for conducting experimental Beyond Visual Line Sight (BVLOS) drone flights for delivery of Covid-19 vaccines . This exemption has been granted under the Unmanned Aircraft System (UAS) Rules, 2021 and will be subject to the adherence to conditions and directions issued (or as may be issued in future) by MoCA[1].

Make healthcare available at citizen’s doorstep

The objective behind the Ministry’s move is to make healthcare available at citizens’ doorstep, increase the reach of the healthcare facility to as many people as possible, curb human exposure where Covid cases are on a rise and limit human contact in areas that already have a high number of Covid-19 cases. This move also aims to accelerate the drone deployment process to formulate application-based models for which the grant has included Beyond Visual Lines Sight (BVLOS). The trials are expected to begin from the end of the month of May, 2021.

For the experiment of drone flights, Government of Telangana must comply with conditions set up by MoCA, some of which are listed below as under-

  • The maximum height permitted for a drone is 400 feet Above Ground Level.
  • At the time of flight, an energy reserve of 15% should be maintained at all times.
  • Weather limitations mentioned by the manufacturers should be complied with.
  • Drone operations will be limited to local sunrise & local sunset.
  • Visual Metrological Conditions (VMC) shall prevail at take-off & landing sites.

The exemption is valid for a period of one year from the date of approval of the SOP or until further orders, whichever is earlier. The Government of Telangana would also be required to send a detailed proof of concept to MoCA & DGCA.

The Ministry’s notification in detail can be accessed here.

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Permission to Import Medical Devices and Mandatory Declarations u/Legal Metrology

VAC-SINNERS @ WORK: THE RISE OF ONLINE VACCINATION SCAMS

[1] https://pib.gov.in/PressReleasePage.aspx?PRID=1717026

SC QUESTIONS CENTRE’S PRICING POLICY OF COVID VACCINE.

Medical

With India facing an unprecedented rise in daily number of Covid positive cases, the Supreme Court in a suo moto Writ Petition titled In Re: Distribution Of Essential Supplies and Services During Pandemic[1] sought for an explanation from the Central Government regarding the rationale behind the pricing of Covid vaccines.

CONTENTS OF THE COURT’S ORDER

The Hon’ble Supreme Court, under the powers conferred in Article 32, is currently hearing a suo moto writ that is seeking answers from the Central government on the issues pertaining to adequate supply of oxygen, availability of essential drugs, and streamlining the modalities for vaccination.

At the same time that the Hon’ble Supreme Court is taking up this writ, several High Courts all across the country are also grappling with the practical issues and problems which have arisen in their jurisdictions as a result of the outbreak of the pandemic. Therefore, the Supreme Court specifically stressed on the fact that “The role of this Court in the present situation is complementary to the role and functions being performed by the High Courts. Neither is intended to substitute the other. Indeed, there may be certain national issues or issues of a systemic nature which have their origin beyond boundaries of a particular State. These issues which travel beyond state boundaries will require a comprehensive national approach if we are to alleviate the immense suffering caused by the pandemic. It is with the consciousness of this duty that this Court has assumed jurisdiction under Article 32 of the Constitution. Thus, we clarify that the High Courts shall not be restrained by the pendency of these proceedings in passing appropriate orders to deal with the emerging situation in each State or Union Territory concerned, as and when necessary to do so.”

CENTRE’S PRICING POLICY FOR COVID VACCINE

During the course of the hearing, a Bench comprising of Hon’ble Justices DY Chandrachud, L Nageswara Rao and S Ravindra Bhat, amongst other things, asked the Centre to explain and clarify in an Affidavit “the basis and rationale adopted in regard to the pricing of vaccines”.

Currently, the Centre’s vaccination policy permits private vaccine manufacturers to set the price of a vaccine themselves. Bharat Biotech, which produces the indigenous vaccine Covaxin, had decided to sell it to State Governments at INR 600 per dose and to private hospitals at INR 1200 per dose. Whereas Serum Institute of India, is selling its ‘Covishield’ vaccine at INR 400 per dose to the State Governments and to private hospitals at the rate of INR 600 per dose. However, on April 28, 2021 SII’s CEO, announced in a tweet that as a philanthropic gesture, they have reduced the price of Covishield to INR 300 per does for State Governments.  Be that as it may, it is pertinent to mention here that both of these vaccines are sold to the Central government at a measly rate of INR 150 only.[2]

Furthermore, with the Government announcing that from May 01, 2021 people above the age of 18 shall become eligible to get the vaccine, the Supreme Court was also curious to know how the Centre plans to meet the increased demand that will inevitably happen once 1st of May comes.

The Court also opined that given the state of affairs in this pandemic, now is the right time for the Centre to start invoking its powers under the Drugs Control Act for price control and the Patents Act for compulsory licensing.

‘Price gouging’ during a calamity has been the norm that businesses tend to follow in order to increase turnovers. Therefore, it has always been the duty of the Government to ensure that it protects the interest of its people and maintains a balance in the economy.

The Ministry of Health and Family Welfare through a press release had announced on April 19, 2021 that people above the age of 18 years shall be eligible for a vaccine[3]. In the process of celebrating this announcement, many managed to ignore the fine print of this press release, which amongst  other things laid down as under:

  1. Private vaccine manufactures need not supply the whole vaccine stock to the Central Government. They are allowed to sell 50% stock in open market, while the rest 50% should be given to the Centre.
  2. State Governments and private players have to purchase vaccines from open market at a price declared in advance by the manufacturers.
  3. Private hospital can provide vaccination at a “self-set vaccination price”, which should be transparently declared.
  4. The vaccines for the category 18-45 years will be through the open-market channel. In other words, they have to take vaccination from private hospital
    or the State government agencies
  5. The Centre will distribute its share of free of cost vaccines to frontline workers, health care workers and those aged above 45 years.
  6. The Centre has discretion to allot from its 50% quota a share to States based on a review of their performance and extent of infection

In view of the aforesaid, vaccination pricing policy, the Court has demanded an explanation from the Government on the rationale for differential pricing in regard to vaccines sourced by the Union government on one hand and the States on the other hand when both sources eventually lead to the distribution of vaccines to citizens.

For a welfare State like India, interest of the public and its health has always been the top concern.  The roles of the State and Centre cannot be distinguished in this regard. Therefore, to ask the State Governments to compete in open market for vaccine procurement, whilst the Centre gets to keep a guaranteed share for itself may hamper the process of smoothly rolling out vaccines for all. It was because of this very reason, the Supreme Court has also asked the Centre to apprise it on how the supplies of vaccine will be allocated between the various States if each State is to negotiate with vaccine producers.

SUPPLY OF OXYGEN TO STATES

The Supreme Court also sought for clarifications from the Union of India on the following issues concerning supply of oxygen to various States that been demanding for it:

  1. The anticipated demand for oxygen in the country at the present point of time as well as in the foreseeable future;
  2. The steps taken and proposed to be taken for increasing the availability of oxygen, in order to meet the current and anticipated need in the future;
  3. The monitoring mechanism for ensuring the supply of oxygen, particularly to critically affected States and Union Territories as well as the other areas;
  4. The basis on which allocation of oxygen is being made from the central pool; and
  5. The methodology adopted for ensuring that the requirements of the States are communicated to the Central Government on a daily basis so as to ensure that the availability of oxygen is commensurate with the need of each State or, as the case may be, Union Territory.

AVAILABILITY OF ESSENTIAL DRUGS AND COVID CENTRES

The Centre was also asked to inform the Court about the steps being taken to ensure essential drugs, including Remdesivir and Favipiravir, are available. It also asked for clarity on the modalities which have been set up for controlling prices of essential drugs, for preventing hoarding and for ensuring proper communication of the requirements at the level of each District by the District health authorities or Collectors to the Health Departments of the States and thereafter by the states to the Union Ministry of Health and Family Welfare so that the projected requirements are duly met and effectively monitored on a daily basis.

Similar information was also sought on how the Centre plans on enhancing the critical medical infrastructure, as well as on framing a policy on specifying the standards and norms to be observed for admitting patients to hospitals and covid centres and the modalities for admission.

These directions come at a time when several instances of hoarding and black marketing of Remdesivir have been unearthed by the police in several States. The situation had become so dire that States like Maharashtra have asked that the Centre should allow compulsory licensing of this drug, in order to curb the shortage being faced.

CREATION OF MEDICAL PANEL

The Court considered it necessary that in order to distribute authentic information about combating the pandemic, a medical panel consisting of experts should be nominated by the Centre. A method may be prepared by the Union of India to ensure that advisories are shared by this panel daily, and this same method can be replicated at all State levels as well.

HEARING ON APRIL 30, 2021

The writ was heard again on April 30, 2021, when the Court circled back on the issue that the Centre should not leave vaccine pricing on the manufacturers, but instead invoke its powers under Section 92 and 100 of the Patents Act, for compulsory licensing of the Covid vaccine.

The Court opined that India was at the forefront of negotiating of compulsory licensing in TRIPS, and the present pandemic is the most important case for invoking such powers of the Centre. Section 92 of the Patent Act provides that if the Central Government is satisfied in respect of any patent in force in circumstances of national emergency or in circumstances of extreme urgency or in case of public non-commercial use, that it is necessary that compulsory licenses should be granted to work the invention, it may make a declaration to that effect. Similarly under Section 100 of the Act, the Centre has the power to intervene, at any time after an application for a patent has been filed or the patent has been granted, for Government purposes.

The Court also asked the Centre that since vaccine manufacturing is being publicly funded, vaccines are therefore public goods. So why is the Centre only purchasing 50% of the vaccines, and leaving the States to fend for themselves in the open market?

We hope that when the matter is taken up next, the particulars of the vaccine price policy is taken up by the top Court in detail, so that it may allow the goal of universal vaccination to materialise.

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VAC-SINNERS @ WORK: THE RISE OF ONLINE VACCINATION SCAMS

Innovative Relationship of Patents & Business Entities During Crisis

[1] SMW (C) No. 3/2021

[2] https://indianexpress.com/article/india/central-govt-asks-serum-bharat-biotech-to-cut-vaccine-prices-7290536/

[3] https://www.pib.gov.in/PressReleseDetail.aspx?PRID=1712710

 

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