2020 (3) TMI 1263 - Tri - Insolvency and Bankruptcy

Extension of 45 days of CIRP period beyond 330 days - Rule 11 of NCLT rules 2016 read with Section 60(5)(C) and 12(3) of Insolvency and Bankruptcy Code, 2016 - HELD THAT - In the present case the Committee of Creditors in its 13th meeting with 85% vote share voted during 6th -7th February, 2020 approved resolution for extension of 45 days of Insolvency Resolution Period mainly on the ground that the resolution plan is under consideration of Committee of Creditors. It is mentioned in the minutes that the resolution plan is on the verge of finalization and may take another one month to arrive at a viable resolution plan in respect of the corporate debtor - In the facts and in order to explore the possibility of achieving successful insolvency resolution and to avoid liquidation of the corporate debtor; the Corporate Insolvency Resolution Process period in the present case is further extended by 45 days from the date of this order. The Resolution Professional and the members of Committee of Creditors are directed to expedite the possibility of achieving resolution of the stressed assets of the corporate debtor within the extended period. Application allowed.

Summary

Issues:
Grant of extension of CIRP period beyond 330 days under Rule 11 of NCLT rules 2016 read with Section 60(5)(C) and 12(3) of Insolvency and Bankruptcy Code, 2016.

Analysis:
The Tribunal, in this judgment, addressed the application filed by the resolution professional seeking an extension of 45 days of the Corporate Insolvency Resolution Process (CIRP) period beyond the stipulated 330 days. The Tribunal highlighted the importance of completing the CIRP within the prescribed time limit but acknowledged that in exceptional cases, extensions may be granted to facilitate a resolution and prevent liquidation of the corporate debtor. The Tribunal referred to a decision of the Hon'ble Supreme Court emphasizing that while the general rule is to complete the CIRP within 330 days, extensions can be granted in specific circumstances where it is in the interest of stakeholders and the delay is not attributable to the litigants. The Tribunal noted that the Committee of Creditors, with an 85% vote share, approved the extension based on the pending resolution plan, which was close to finalization but required additional time for viability assessment.

The Tribunal, considering the facts of the case and the potential for a successful resolution, granted the extension of the CIRP period by 45 days. The Tribunal directed the Resolution Professional and the Committee of Creditors to expedite efforts to achieve a resolution for the stressed assets of the corporate debtor within the extended timeframe. By allowing the application in the specified terms, the Tribunal aimed to facilitate the resolution process and prevent the liquidation of the corporate debtor. The judgment underscored the importance of balancing the need for timely resolution with the flexibility to extend the CIRP period in exceptional cases to protect the interests of all stakeholders involved.