2019 (12) TMI 1558 - Tri - Insolvency and Bankruptcy

Resolution professional seeking for exclusion of 462 days from the Corporate Insolvency Resolution Process period - HELD THAT - In the facts and in order to avoid liquidation of the Corporate Debtor and also to explore the possibility of resolution the Corporate Insolvency Resolution Process; further time of 150 days is extended from 16.11.2019 for completion of Insolvency Resolution Process as an exceptional case. 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 disposed off.

Summary

Issues:
1. Exclusion of days from the Corporate Insolvency Resolution Process period.
2. Extension of the Insolvency Resolution Process period beyond the statutory limit.

Issue 1: Exclusion of days from the Corporate Insolvency Resolution Process period

In the case at hand, the Resolution Professional filed an application seeking the exclusion of 462 days from the Corporate Insolvency Resolution Process period. It was noted that the Insolvency Process for the corporate debtor was initiated on a specific date, and as of the enforcement of the Insolvency and Bankruptcy Code (Amendment) Act 2019, the process was still pending. The third proviso of sub-section 3 of Section 12 of the Code stipulates that the Corporate Insolvency Resolution Process period must be completed within a specific timeframe. The Resolution Professional requested a further extension of 150 days beyond the statutory deadline, citing reasons such as the appointment of an Official Liquidator by the Delhi High Court and delays in procuring necessary documents. The Adjudicating Authority acknowledged that in exceptional cases, extensions can be granted to achieve resolution and prevent liquidation.

Issue 2: Extension of the Insolvency Resolution Process period beyond the statutory limit

Referring to a decision of the Hon'ble Supreme Court in a related matter, the Adjudicating Authority highlighted that while the general rule mandates completion of the Corporate Insolvency Resolution Process within a specified timeframe, exceptions can be made based on specific circumstances. The Court emphasized that if extending the resolution process beyond the statutory limit would benefit stakeholders and prevent liquidation, such extensions could be granted. In this case, considering the risk of liquidation and the need to explore resolution possibilities, an additional 150 days were granted to complete the Insolvency Resolution Process. The Resolution Professional and Committee of Creditors were directed to expedite efforts to achieve resolution within the extended timeframe to avoid liquidation of the Corporate Debtor.

In conclusion, the Tribunal granted an extension of 150 days for the completion of the Insolvency Resolution Process in this exceptional case, emphasizing the importance of achieving resolution to prevent liquidation and protect stakeholders' interests. The decision highlighted the flexibility of the legal framework to address unique circumstances and ensure the effective resolution of corporate insolvency cases.