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2018 (12) TMI 1821 - Tri - IBCMaintainability of application - initiation of CIRP - Declaration of insolvency commencement date - whether the insolvency commencement date is August 9 2017 or August 9 2018? - HELD THAT - In the case on hand the Adjudicating Authority in the admission order itself appointed the IRP that was made on March 9 2017 - The hon ble Supreme Court of India in 2018 (8) TMI 661 - SUPREME COURT clearly said that the recommencement of the resolution process is from the stage of appointment of IRP by the order dated August 9 2017. Therefore a conjoint reading of section 5 sub-section (12) and section 16 and the order of hon ble Supreme Court clearly goes to show that the insolvency commencement date in this case is August 9 2017. This Authority is of the considered view that reviving the period prescribed under the statute by another 180 days commencing from August 9 2018 cannot be equated with insolvency commencement date. The IRP is not at all prevented from taking claims. But the claim amounts should be calculated taking August 9 2017 it being the insolvency commencement date as the cut-off date. Once the insolvency process commences from August 9 2017 the claim amounts have to be verified as on August 9 2017. Although the claims were received after August 9 2017 or after August 9 2018. This Authority is of the considered view that the insolvency commencement date i.e. the cut-off date for calculating the quantum of claim amounts for all types and classes of creditors is August 9 2017.
Issues Involved:
1. Determination of the insolvency commencement date. 2. Interpretation of the Supreme Court's order regarding the recommencement of the CIRP. 3. Impact of the insolvency commencement date on claims and transactions. Issue-Wise Detailed Analysis: 1. Determination of the Insolvency Commencement Date: The primary issue was whether the insolvency commencement date should be August 9, 2017, or August 9, 2018. The applicants argued that the Supreme Court's order dated August 9, 2018, should be considered the insolvency commencement date. They contended that the IRP must invite fresh claims from all creditors treating this date as the cut-off for considering the quantum of claims. The Tribunal referred to Section 5(12) of the Insolvency and Bankruptcy Code, 2016, which defines the "insolvency commencement date" as the date of admission of an application for initiating the CIRP by the Adjudicating Authority under section 7, 9, or 10. It was noted that the Supreme Court had not changed the date of commencement of the insolvency resolution process from August 9, 2017, to August 9, 2018. The Tribunal concluded that the insolvency commencement date remains August 9, 2017, as per the statutory definition and the Supreme Court’s order. 2. Interpretation of the Supreme Court's Order Regarding the Recommencement of the CIRP: The applicants contended that the Supreme Court's order directed the recommencement of the CIRP afresh from the stage of the appointment of the IRP, implying a new insolvency commencement date. The Tribunal examined the Supreme Court's order and noted that the Supreme Court had exercised its powers under Article 142 of the Constitution to revive the CIRP and reconstitute the CoC to include home buyers as financial creditors. However, the Supreme Court did not set aside the original admission order dated August 9, 2017, nor did it change the statutory definition of the insolvency commencement date. The Tribunal emphasized that the Supreme Court's order was for the limited purpose of recommencing the resolution process afresh from the stage of the appointment of the IRP by the order dated August 9, 2017, and extending the statutory period of 180 days for the completion of the resolution process from August 9, 2018. Therefore, the insolvency commencement date remains August 9, 2017. 3. Impact of the Insolvency Commencement Date on Claims and Transactions: The applicants argued that the IRP should invite fresh claims from creditors based on the Supreme Court's order, and the cut-off date for submission of claims should be August 9, 2018. They also contended that they had not been paid interest accruing on their claims for the period between August 9, 2017, and August 9, 2018. The Tribunal noted that the IRP is not prevented from taking claims, but the claim amounts should be calculated taking August 9, 2017, as the cut-off date. The Tribunal also highlighted that the insolvency commencement date has relevance in deciding whether particular transactions are avoidable under sections 43 and 45 of the Code. If the insolvency commencement date was changed to August 9, 2018, certain transactions might not fall under these sections, potentially causing financial loss to other financial creditors and stakeholders. The Tribunal concluded that the insolvency commencement date, i.e., the cut-off date for calculating the quantum of claim amounts for all types and classes of creditors, is August 9, 2017. The application was accordingly disposed of, affirming that the insolvency commencement date remains August 9, 2017.
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