9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (8) TMI 1269 - Tri - Insolvency and BankruptcySeeking exclusion of time of 165 days from the timelines prescribed under the Code - seeking to grant an additional time period of 15 days as extension of the CIRP period for the Corporate Debtor - seeking to exclude the time period, until the date of disposing of this Application - HELD THAT - It is seen that extension of CIRP in relation to the Corporate Debtor is not only granted once, but twice in the present matter - Further, the exclusion as sought for by the Applicant is for a total of 165 days and also the Applicant has sought for an extension of 15 days. As to the facts of the present case, already two time exclusion has been sought and given for to the Applicant in relation to the CIRP. Hence, the exclusion as sought by the Applicant for any period before 31.05.2021 as adumbrated in the table supra cannot be granted by this Adjudicating Authority. However, due to the second wave of Covid-19 which was prevailing in the country, nationwide lockdown was imposed on 08.05.2021, which was full lifted only on 27.06.2021. Hence as per Section 40C of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the said period from 08.05.2021 till 27.06.2021 can be excluded from the CIRP timelines. Further, the present Application was filed before this Tribunal on 25.05.2021 and till the date it was pending i.e. 30.07.2021 can be excluded from the CIRP timelines. Thus, a total of 83 days can be excluded from the CIRP timelines. If the said 83 days are excluded the CIRP in relation to the Corporate Debtor would come to an end on 22.08.2021. The CIRP in relation to the Corporate Debtor is extended only upto 22.08.2021 and the Applicant is required to finalize the accounts of the Corporate Debtor and also as per the order dated 26.02.2021 the Applicant may file an Application for liquidation after the expiry of the said period in terms of Section 33 of IBC, 2016 - Application allowed.
Issues Involved:
1. Exclusion of time from the CIRP timelines. 2. Extension of the CIRP period. 3. Consideration of exceptional circumstances for extension beyond the statutory limit. 4. Compliance with the Companies Act, 2013 and other regulations. 5. Possibility of initiating liquidation proceedings. Detailed Analysis: Issue 1: Exclusion of time from the CIRP timelines The Resolution Professional sought exclusion of 165 days from the CIRP timelines. The Tribunal noted that the CIRP had already exceeded 330 days, and the process had been extended multiple times due to various reasons, including the Covid-19 lockdown. The Tribunal referenced the Hon'ble Supreme Court's judgment in the Essar Steel case, which allows for extensions beyond 330 days only under exceptional circumstances. The Tribunal granted exclusion for the period from 08.05.2021 to 27.06.2021 due to the second wave of Covid-19 and the period during which the application was pending, totaling 83 days. Thus, the CIRP was extended to 22.08.2021. Issue 2: Extension of the CIRP period The Resolution Professional also sought an additional 15-day extension of the CIRP period. The Tribunal emphasized that the CIRP had already been extended twice and had surpassed 600 days, far exceeding the statutory limit of 330 days. The Tribunal reiterated that any further extension must be justified by exceptional circumstances, which were not demonstrated in this case. Consequently, the Tribunal did not grant the additional 15-day extension but extended the CIRP only up to 22.08.2021. Issue 3: Consideration of exceptional circumstances for extension beyond the statutory limit The Tribunal acknowledged the Supreme Court's decision in the Essar Steel case, which permits extensions beyond 330 days only in exceptional circumstances. The Tribunal found that the reasons provided by the Resolution Professional, such as the Covid-19 lockdown and difficulties in visiting centers for due diligence, did not constitute exceptional circumstances. The Tribunal also referenced the NCLAT's decision in the Meenakshi Energy case, emphasizing that extensions should be granted sparingly and only in extraordinary situations. Therefore, the Tribunal concluded that no further extension beyond 22.08.2021 was warranted. Issue 4: Compliance with the Companies Act, 2013 and other regulations The Tribunal noted that various compliances under the Companies Act, 2013, and other regulations were yet to be finalized by the Resolution Professional. The CoC had deliberated on these issues and recognized the need for additional time to complete the necessary compliances, revise the Information Memorandum, and obtain resolution plans. However, the Tribunal emphasized that the CIRP process could not be restarted afresh from the stage of issuing a new Expression of Interest, as it would disrupt the CIRP timelines. Issue 5: Possibility of initiating liquidation proceedings The Tribunal highlighted that if the insolvency resolution of the Corporate Debtor was not achieved by 31.05.2021, it would be constrained to initiate liquidation proceedings under Section 33 of the IBC, 2016. Given the failure to demonstrate exceptional circumstances for further extension, the Tribunal directed the Resolution Professional to finalize the accounts of the Corporate Debtor by 22.08.2021. If the resolution was not achieved by then, the Tribunal instructed the Resolution Professional to file an application for liquidation. The Tribunal also mentioned the possibility of exploring a Scheme under Section 230 of the Companies Act, 2013, during the liquidation process. Conclusion: The Tribunal granted an exclusion of 83 days from the CIRP timelines due to the Covid-19 lockdown and the period during which the application was pending, extending the CIRP to 22.08.2021. However, it denied any further extension beyond this date, emphasizing the need for exceptional circumstances to justify such extensions. The Tribunal directed the Resolution Professional to finalize the accounts of the Corporate Debtor by the extended date and to proceed with liquidation if the resolution was not achieved.
|
