2019 (6) TMI 1561 - Tri - Insolvency and Bankruptcy

Exclusion of 2 days from the statutory period of the CIRP of the Corporate Debtor - Section 60(5) of the IBC 2016 - HELD THAT - It is stated that the aforesaid period of 2 (Two) days may be excluded from the CIRP period of the Corporate Debtor as the said Two days period is on account of the time elapsed between the date Of passing of the Admission Order and the actual date on which the IRP received a copy of the said Order and took control of the affairs of the Corporate Debtor. We are inclined to exclude 2 (Two) days from the statutory period of the CIRP of the Corporate Debtor - Application allowed.

Summary

Issues:
Exclusion of time period from Corporate Insolvency Resolution Period (CIRP) of a Corporate Debtor.

Analysis:

Issue 1: Exclusion of time period from CIRP
The case involved an application filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 seeking to exclude 2 days from the Corporate Insolvency Resolution Period (CIRP) of a Corporate Debtor. The applicant, the Resolution Professional, argued that due to a delay in receiving the copy of the Admission Order, they were unable to take control of the Corporate Debtor, resulting in a loss of 2 days from the CIRP period. The applicant relied on a decision by the NCLAT which outlined grounds for excluding time periods in the resolution process, including delays between the passing of the Admission Order and the Resolution Professional taking charge. The Committee of Creditors (CoC) authorized the Resolution Professional to file the application for exclusion, emphasizing the importance of strict timelines in the insolvency process.

Issue 2: Tribunal's Decision
After considering the arguments presented, the Tribunal, comprising two members, acknowledged the reasons put forward by the Resolution Professional and decided to exclude the 2 days from the statutory period of the CIRP of the Corporate Debtor. The Tribunal found merit in the applicant's claim regarding the inadvertent loss of time due to the delay in receiving the necessary documents, emphasizing the potential adverse impact of even a single day's delay on the insolvency process. The Tribunal granted the relief sought in the application, allowing the exclusion of the 2-day period from the CIRP timeline without imposing any costs.

In conclusion, the Tribunal's decision to exclude the 2 days from the CIRP period of the Corporate Debtor was based on the applicant's valid reasons and the importance of adhering to the strict timelines prescribed under the Insolvency and Bankruptcy Code. The case highlighted the significance of timely actions in insolvency proceedings and the need to address any delays that could impede the efficient resolution of corporate insolvency cases.