2019 (11) TMI 1493 - Tri - Companies Law

Interpretation of Statute - second and third provisos to Section 12 of I B Code, 2016 which were brought into force on 16.08.2019 - Consideration of proposed Resolution Plan - HELD THAT - The period of CIR Process in relation to the Corporate Debtor is hereby extended for three weeks from the date of passing of this order. Accordingly, the Resolution Professional is directed to issue short notice to the CoC for convening its meeting to consider the improved Resolution Plan as proposed by the Resolution Applicant and file Status Report before completion of the extended period. Application disposed off.

Summary

Issues involved:
Interpretation of second and third provisos to Section 12 of I&B Code, 2016 regarding extension of CIR Process period.

Analysis:
The judgment pertains to a case where the Resolution Applicant sought directions to place a revised offer before the Committee of Creditors (CoC) for consideration. The Resolution Applicant had increased the offer value, but due to time constraints, the CoC did not agree to consider the revised offer. The Resolution Professional had sought an extension of the Corporate Insolvency Resolution (CIR) Process, which had expired after 330 days, with a 60-day extension. The legal issue at hand was the interpretation of the second and third provisos to Section 12 of the I&B Code, 2016, which were amended on 16.08.2019. The Resolution Professional argued that the amendment allowed for discretion in granting additional time for cases initiated before the amendment. The Resolution Applicant emphasized the need for the CoC to consider the improved Resolution Plan in the best interest of creditors.

The Tribunal considered the arguments and extended the period of the CIR Process for three weeks from the date of the order. This extension would allow the CoC to convene a meeting to consider the revised Resolution Plan proposed by the Resolution Applicant. The Tribunal emphasized the importance of not ignoring a viable Resolution Plan due to time constraints, as it would defeat the purpose of the I&B Code, 2016. The Resolution Professional was directed to issue a short notice to the CoC for the meeting and to file a Status Report before the extended period's completion. The judgment highlighted the significance of ensuring that creditors' interests are safeguarded through a thorough consideration of all viable Resolution Plans within the legal framework of the I&B Code, 2016.

In conclusion, the Tribunal's decision to extend the CIR Process period reflects a balanced approach to address the time constraints faced by the parties involved while upholding the principles of insolvency resolution under the I&B Code, 2016. The judgment clarifies the application of the amended provisos to Section 12 and underscores the need for timely and comprehensive consideration of Resolution Plans to achieve the objectives of the insolvency framework.