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2020 (3) TMI 1285 - Tri - Insolvency and BankruptcySeeking exclusion of period of 60 days on account of legal proceedings in the Resolution Process - section 12 Sub-Section 3 Proviso 2 of the IBC 2016 R/w Rule 11 of the NCLT Rules 2016 - HELD THAT - The total time permissible under Code viz. 180 90 days was going to expire on 22nd March 2019. The record shows that there is no substantial work done in the CIRP process in the case except filing one Application or the other seeking various reliefs from the Adjudicating Authority. There are hardly realisable assets standing in the name of Corporate Debtor. And the Contention of Applicant that he would take appropriate action if 60 days further time is granted is without any basis and permissible 270 days have already been exhausted without doing any substantial work in CIRP. The Applicant has not furnished any material to show as to how State Government freezes the Property of Corporate Debtor and what enquiry/investigation was conducted before etc. He cannot threaten the Officials of State Govt. with Contempt without citing any substantial material as they are also discharging their statutory deities under Law. There would be no useful purpose to grant further time as asked for. The instant Application is totally misconceived and the grounds mentioned in the application are baseless and untenable and they are liable to be rejected. In terms of Section 33 of Code if no Resolution Plan is received within stipulated period as per law under sub-section (6) of Section 30 or reject Resolution Plan the Corporate Debtor has to be liquidated as per extant provisions of Code. Therefore it is necessary to pass an order placing Corporate Debtor under Liquidation. In order to pass an order of Liquidation it is necessary to appoint Liquidator. Therefore the COC AR are directed to suggest suitable Liquidator to appoint. Application rejected.
Issues involved:
1. Application filed seeking to exclude period of 60 days in Resolution Process. 2. Status of assets and liabilities of the Corporate Debtor. 3. Time lost in legal proceedings with Government of Karnataka. 4. Extension of CIRP completion date. 5. Decision on passing order of liquidation and appointment of Liquidator. Issue 1 - Application seeking to exclude 60 days in Resolution Process: The Resolution Professional filed an application to exclude 60 days due to legal proceedings, seeking an extension of the CIRP completion date. The application was based on the need to meet ends of justice and equity for Home Buyers. The application was supported by the 3rd Meeting of CoC, which voted in favor of the extension. Issue 2 - Status of assets and liabilities of the Corporate Debtor: The estimated value of properties, financial claims, advances paid to landowners, and total assets and liabilities were detailed. The Resolution Professional highlighted ongoing efforts, follow-ups, and expected claims from Homebuyers and other legislation. The Resolution Professional expressed confidence in completing the work and inviting Expression of Interest for a Resolution Plan. Issue 3 - Time lost in legal proceedings with Government of Karnataka: Significant time was lost in legal proceedings with the Government of Karnataka, impacting the CIRP timeline. The rejection of the Applicant's request by the Government based on the KPID Act was highlighted. The time lost from notices to replies was detailed, leading to an extension request for the CIRP completion date. Issue 4 - Extension of CIRP completion date: The Tribunal reviewed the application, pleadings, and relevant provisions of the Code. It noted the lack of substantial progress in the CIRP process despite the permissible time limit being close to expiration. The Tribunal found the application baseless and rejected it, emphasizing the need for substantial work within the stipulated timeline. Issue 5 - Decision on passing order of liquidation and appointment of Liquidator: In light of the lack of a Resolution Plan within the stipulated period and the rejection of the extension request, the Tribunal directed the Corporate Debtor to be placed under liquidation. It further instructed the COC and AR to suggest a qualified Liquidator for appointment, emphasizing the necessity of this step in the absence of a Resolution Plan. In conclusion, the Tribunal rejected the application for an extension, highlighting the need for substantial progress in the CIRP process and the impending liquidation of the Corporate Debtor due to the absence of a Resolution Plan. The decision underscored the importance of timely actions and compliance with the provisions of the Insolvency and Bankruptcy Code.
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