2019 (6) TMI 1493 - AT - Insolvency and Bankruptcy

Period of CIRP process - exclusion of period of 145 days when the erstwhile Resolution Professional did not function due to non-cooperation by the Suspended (Board of Directors) - HELD THAT - The Appellant is allowed to implead Managing Director of the Board of Directors as party Respondent No. 2. Punjab National Bank, Lead Bank of the Committee of Creditors be also impleaded as party Respondent No.3. Necessary corrections be made in the cause title and other pages of the paper book. Let notice be issued on newly impleaded Respondent No. 2 - Managing Director of the Board of Directors (by name) and Respondent No. 3 - Punjab National Bank, Lead Bank of the Committee of Creditors. Requisites alongwith process fee be filed by tomorrow - Post the case 'for orders' on 1st July, 2019. The appeal may be disposed of on the next date.

Summary

Issues:
1. Exclusion of a certain period due to non-cooperation by the Suspended Board of Directors.
2. Impleadment of Managing Director and Lead Bank of Committee of Creditors.
3. Issuance of notice to newly impleaded parties.
4. Postponement of liquidation order.
5. Directions for the Interim Resolution Professional to ensure the company remains a going concern.

Analysis:
1. The Appellant's counsel argued that the Adjudicating Authority failed to consider the exclusion of a 145-day period during which the erstwhile Resolution Professional did not function due to non-cooperation by the Suspended Board of Directors. Referring to a previous decision, it was emphasized that circumstances justifying the exclusion of a certain period can be taken into account. The exclusion of this period was deemed necessary for the Committee of Creditors to assess pending resolution plans and potentially save the company from liquidation.

2. In response to the above argument, the Tribunal allowed the Appellant to implead the Managing Director of the Board of Directors as Respondent No. 2 and the Punjab National Bank, Lead Bank of the Committee of Creditors, as Respondent No. 3. Corrections were directed to be made in the cause title and other relevant documents to reflect these additions. Notice issuance was ordered for the newly impleaded parties, with provisions for email service if their addresses were provided.

3. The Tribunal scheduled the case for further orders on a specified date and directed that no order of liquidation should be passed by the Adjudicating Authority until further notice. Meanwhile, the Interim Resolution Professional was tasked with ensuring the company's continuity as a going concern. Specific instructions were given regarding the operation of the Corporate Debtor's bank accounts for essential day-to-day functions, with a requirement for authorization from the Interim Resolution Professional for certain financial transactions.

This detailed analysis covers the key issues addressed in the judgment, providing a comprehensive overview of the Tribunal's decisions and directions related to each issue raised in the appeal.