2019 (6) TMI 1556 - Tri - Insolvency and Bankruptcy

Exclusion of 210 days for the purpose of calculation of CIRP period - HELD THAT - Considering the peculiar circumstances of this case i.e. litigation pertaining to the assets of the Corporate Debtor is still going on due to which a resolution plan could not be obtained by the Resolution Professional, natural justice demands to give more time to make an attempt to invite an acceptable resolution plan. Side by side, the RP shall also try to resolve with the Societies a workable solution so that the grievance of the Home Buyers be redressed. However, it is expected that the Ld. RP shall expeditiously comply with the directions. It is hereby held that the period of 210 days cannot be allowed and the same is hereby restricted to 150 days, because sufficient time had already been granted for completion of the insolvency process. This Application (MA 1616/2019) is partly allowed to be operative retrospectively w.e.f. 28.04.2019 for the purpose of calculation of 150 days as curtailed by this order. The Resolution Professional shall complete the process as early as possible and inform the progress on the next date of hearing, listed for 22.07.2019.

Summary

Issues:
1. Exclusion of days for calculation of CIRP period.

Analysis:
The judgment revolves around an application seeking the exclusion of days for the calculation of the Corporate Insolvency Resolution Process (CIRP) period. Initially, a Company Petition was filed by an Operational Creditor against the Corporate Debtor, which led to the admission of the petition by the Bench. Subsequently, during the CIRP period, certain exclusions and extensions were allowed, with specific days excluded and extended to facilitate the resolution process. However, as the CIRP approached its scheduled conclusion date without a resolution plan in sight, the Committee of Creditors (CoC) recommended liquidation. The CoC's decision was influenced by various factors, including poor response to expressions of interest, uncooperative societies, and viability issues. The applicant relied on a Supreme Court judgment equating the purchase of a flat to the right to life, emphasizing the paramount interest of home buyers. The applicant argued for the extension of time to protect home buyers' interests, citing relevant legal provisions and precedents.

Continuing the analysis, the judgment considered the peculiar circumstances of the case, particularly ongoing litigation affecting the resolution process. The Adjudicating Authority acknowledged the need for more time to seek an acceptable resolution plan and address the grievances of home buyers. The judgment highlighted the importance of natural justice in allowing sufficient time for resolution efforts. Ultimately, the Adjudicating Authority restricted the exclusion period to 150 days, emphasizing that ample time had already been granted for the insolvency process. The application seeking 210 days of exclusion was partly allowed, with the Resolution Professional directed to expedite the process and provide progress updates for the next hearing date.

In conclusion, the judgment delves into the complexities of the insolvency resolution process, balancing the interests of stakeholders such as creditors, home buyers, and the resolution professional. It underscores the significance of legal principles, precedents, and the equitable application of laws to ensure a fair and efficient resolution of insolvency cases.