2021 (9) TMI 1325 - Tri - Insolvency and Bankruptcy

Seeking extension of CIRP period - seeking extension beyond 330 days - more than 730 days have passed since the commencement of the CIRP in the Corporate Debtor company - Section 12(3) of IBC, 2016 - HELD THAT - In terms of Section 12(3) of IBC, 2016, the CIRP of the Corporate Debtor has to be mandatorily completed within maximum of 330 days from the Insolvency commencement date including all extensions and also time taking in legal proceedings in relation to the resolution therefore, the Bench notes that as per the law the Bench cannot extend the CIRP period beyond 330 days. In the extant case also admittedly more than 330 days even after all exclusions and extensions under Code is over. The Bench notes that Hon ble Supreme Court in the case of Essar Steel Vs. Satish Gupta 2019 (11) TMI 731 - SUPREME COURT has mentioned that the CIRP must be completed in 330 days, however, if it can be demonstrated to the Tribunal that only a short period is left for completion of the CIRP beyond 330 days then only the Adjudicating Authority may decide to extend time limit for a short period beyond 330 days. The Bench further notes that in the instant case, even after more than 730 days, there is no sight of completion of CIRP and the RP and COC want to merely explore the possibility of Resolution. From this the Bench concludes that no Resolution of the Corporate Debtor Company is insight. The application filed by the RP for extension of the CIRP Period beyond more than 730 days for further exploring possibility of resolution of the Corporate Debtor Company is dismissed.

Summary

Issues:
1. Extension of Corporate Insolvency Resolution Process (CIRP) period beyond 330 days.
2. Application for extension under Rule 11 of NCLT Rules.
3. Feasibility of Resolution Plan for Corporate Debtor Company.
4. Legal provisions under Section 12(3) of IBC, 2016.
5. Exceptional circumstances for extending CIRP period beyond 330 days.
6. Application of Supreme Court judgment in Essar Steel Vs. Satish Gupta (2020) 8 SCC 531.

Analysis:
1. The Tribunal addressed the issue of extending the CIRP period beyond 330 days as the Resolution Professional filed an application under Rule 11 of NCLT Rules seeking an extension up to 7th December 2021. The Bench noted that more than 730 days had passed since the commencement of CIRP, and even after all extensions and exclusions, over 330 days had elapsed since the Corporate Debtor Company came under CIRP.

2. The Tribunal considered the feasibility of a Resolution Plan for the Corporate Debtor Company, highlighting that despite efforts, no successful Resolution Plan had been obtained. The Committee of Creditors (COC) initially favored liquidation due to the lack of a viable Resolution Plan, but under pressure from home buyers, they agreed to explore partial Resolution by dividing assets into projects.

3. Legal provisions under Section 12(3) of IBC, 2016 were analyzed, emphasizing that the CIRP must be completed within 330 days from the insolvency commencement date. The Bench clarified that under the law, the CIRP period cannot be extended beyond 330 days, including all exclusions and extensions.

4. The Tribunal discussed exceptional circumstances for extending the CIRP period beyond 330 days, referencing a judgment of the Hon'ble Supreme Court in Essar Steel Vs. Satish Gupta (2020) 8 SCC 531. The Supreme Court highlighted that while the CIRP should ideally conclude within 330 days, in exceptional cases where a short period remains for completion beyond 330 days and it benefits stakeholders, the Adjudicating Authority may consider an extension.

5. Applying the Supreme Court's judgment, the Tribunal concluded that despite more than 730 days passing, there was no resolution in sight for the Corporate Debtor Company. As the RP and COC were only exploring resolution possibilities, the Bench dismissed the RP's application for extension, as no concrete resolution was imminent even after an extended period.