2020 (7) TMI 775 - Tri - Insolvency and Bankruptcy

Appointment of the RP - CIRP period of 180 days expired on 4 March 2020 and, thereafter, the same was extended for further 90 days, the said period has already been expired - HELD THAT - If the matter will be sent for convening the meeting of Committee of Creditors, then there is every likelihood of stalemate between secured financial creditor and unsecured financial creditor as reflected from various IAs filed in recent past. In that event, the very object of the IBC will get frustrated and the CIRP cannot be concluded within the stipulated time. In view to save the time, it is expedient to pass appropriate order in the application, for the interest of justice, instead of lingering further for further argument.

Summary

Issues:
1. Stalemate in the appointment of Resolution Professional (RP) due to pending applications by Unsecured Financial Creditors.
2. Expiry of the Corporate Insolvency Resolution Process (CIRP) period.
3. Request for direction to convene a meeting of the Committee of Creditors (CoC) for RP appointment.

Detailed Analysis:
1. Stalemate in RP Appointment:
The judgment addresses the issue of a stalemate in the appointment of the Resolution Professional (RP) due to various applications filed by Unsecured Financial Creditors during the pendency of IA No. 691, 2019. The judge notes that convening a meeting of the Committee of Creditors (CoC) for RP appointment might lead to a stalemate between secured and unsecured financial creditors, as evidenced by recent applications. The judge emphasizes that such a stalemate would frustrate the objectives of the Insolvency and Bankruptcy Code (IBC) and hinder the conclusion of the Corporate Insolvency Resolution Process (CIRP) within the stipulated time.

2. Expiry of CIRP Period:
The judgment highlights that the CIRP period of 180 days initially expired on 4th March 2020 and was subsequently extended for a further 90 days, which has also expired. This expiration of the CIRP period raises concerns about the timely conclusion of the resolution process. The judge acknowledges the impact of the Covid-19 lockdown on the proceedings, which resulted in pending applications and further delays in the resolution process.

3. Request for CoC Meeting:
During the proceedings, Mr. Nandish Chudgar, representing an unsecured financial creditor, requested a direction to convene a meeting of the CoC for the appointment of the RP. However, considering the potential stalemate between creditors and the urgency to conclude the CIRP within the prescribed time frame, the judge deems it expedient to pass an appropriate order in IA No. 691/2019 without further delay. This decision is made in the interest of justice to prevent unnecessary delays and ensure the effective resolution of the insolvency proceedings.

In conclusion, the judgment addresses the challenges posed by the stalemate in RP appointment, the expiry of the CIRP period, and the necessity to expedite the resolution process to uphold the objectives of the IBC. By prioritizing the timely conclusion of the CIRP and avoiding potential conflicts between creditors, the judge emphasizes the importance of efficiency and adherence to the statutory timelines in insolvency proceedings.