2019 (11) TMI 1470 - Tri - Insolvency and Bankruptcy

Extension of CIRP period - extension of 45 days for completion of CIRP - HELD THAT - Though ordinarily the CIR Process has to be completed within the period of 330 days, however, under certain exceptional circumstance, one being that, if the Applicant is able to show to this Authority that only a short period is left for completion of the CIR Process beyond 330 days and that in the interest of all stakeholders to the Corporate Debtor be put back on its feet instead of being sent into liquidation, this Authority in its discretion can extend the period of CIR Process of the Corporate Debtor. From the averments made by the Applicant in the Application, it is evident that the Applicant has already received a Resolution Plan from CSL in relation to the Corporate Debtor It is also pointed out that the Corporate Debtor is engaged in the high niche area. However, it is also pointed out that there is likelihood of more Resolution Applicants also filing the Resolution Plans, all of which will enable the Corporate Debtor to resolve its Insolvency instead of letting the Corporate Debtor into Liquidation. This Application stands allowed and the period of CIR Process is extended by a further period of 45 days as sought for by the Applicant - Application allowed.

Issues Involved:
1. Extension of time for completion of Corporate Insolvency Resolution Process (CIRP).
2. Interpretation of Section 12 of the Insolvency and Bankruptcy Code, 2016.
3. Consideration of exceptional circumstances for extending the CIRP period.
4. Resolution Plan submission and decision-making process.

Extension of Time for CIRP:
The Resolution Professional of the Corporate Debtor sought an extension of 45 days for completing the CIRP, as the previous extensions were insufficient. Despite efforts, the CIR Process could not be completed within the extended period. A new amendment to Section 12 of the I&B Code allowed for a further exclusion of 85 days, setting a new end date. The Application highlighted the possibility of resolving the insolvency through a submitted Resolution Plan, justifying the need for more time.

Interpretation of Section 12:
The Tribunal analyzed the provisions of Section 12 of the I&B Code, particularly the mandatory completion period of 330 days from the insolvency commencement date. The recent amendment emphasized the strict timeline for completing the CIR Process. Referring to a Supreme Court judgment, the Tribunal noted that extensions beyond 330 days could be granted in exceptional cases, especially when stakeholders' interests favored resolving the insolvency instead of liquidation.

Exceptional Circumstances for Extending CIRP:
The Tribunal considered the exceptional circumstances outlined in the Supreme Court judgment, allowing for discretion in extending the CIR Process beyond the mandated 330 days. It emphasized the importance of stakeholders' interests and the potential for successful Resolution Plans to save the Corporate Debtor from liquidation.

Resolution Plan Submission and Decision-Making:
With a Resolution Plan already received and the likelihood of more applicants submitting plans, the Tribunal acknowledged the potential for resolving the Corporate Debtor's insolvency. In line with the Supreme Court's guidance, the Tribunal granted a 45-day extension for the CIR Process, cautioning against further extensions. The Resolution Professional and the Committee of Creditors were directed to expedite the decision-making process on the submitted Resolution Plan.

In conclusion, the Tribunal allowed the Application for an extension of the CIRP period, considering the exceptional circumstances and the potential for successful resolution. The decision aligned with legal provisions and judicial interpretations, emphasizing the importance of timely resolution and stakeholder interests in insolvency proceedings.

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