2021 (2) TMI 1242 - Tri - Companies Law

Seeking resolution passed at the twelfth CoC meeting of the Corporate Debtor - rejection of Applicant s request for extension of time to submit its resolution plan - seeking order to RP and the CoC to consider the resolution plan proposed to be submitted by the Applicant - HELD THAT - This is a case where the CIRP had commenced on 21.11.2019, the first invitation to EoI was published on 18.01.2020. The last date of submission of resolution plan had been extended four times at the instance of prospective resolution applicants including the Applicant herein. Upon receiving an email from the RP, the resolution applicants, including the Applicant herein, had submitted their revised resolution plans before the eleventh CoC meeting was held on 03.09.2020 - it is seen that four opportunities were granted for submission of resolution plan vide dates 16.04.2020, 30.05.2020, 29.06.2020, 31.07.2020, and two opportunities were granted to submit revised resolution plan vide 19.08.2020 and 03.09.2020 to the Applicant herein. Despite several opportunities being granted, the Applicant herein has failed to submit its revised resolution plan. The Applicant s submission that the resolution plan could not be finalised due to lockdown and due to its directors, other than the authorised representative, being either infected or exposed to Covid-19 on various dates is also not very tenable since by the September 2020, remote working technologies were abundantly available, most of the proceedings had moved online, and the board meetings could also have been held online during the extended time already granted by the CoC. This Adjudicating Authority is neither inclined towards quashing and setting aside the resolution passed at the twelfth CoC meeting of the Corporate Debtor held on 10.09.2020 to the extent that it rejects the Applicant s request for extension of time to submit its resolution plan nor inclined towards directing the RP and the CoC to consider the resolution plan proposed to be submitted by the Applicant - Application dismissed.

Summary

Issues:
- Application filed under section 60(5) of the Insolvency and Bankruptcy Code, 2016 to quash and set aside resolution passed at the twelfth CoC meeting.
- Allegations of unreasonableness and arbitrariness by the RP and CoC in rejecting extension request for submission of resolution plan.
- Impact of Covid-19 lockdown on preparation and submission of resolution plan.
- Dispute over multiple extensions granted for submission of resolution plan.
- Consideration of equal opportunity provided to all resolution applicants.

Analysis:
1. The Applicant filed an application under section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking to quash and set aside the resolution passed at the twelfth CoC meeting. The Applicant alleged unreasonableness and arbitrariness by the RP and CoC in rejecting the request for an extension of time to submit its resolution plan and accepting the plan of another respondent.

2. The Applicant contended that due to the Covid-19 lockdown and related issues, it faced challenges in finalizing its resolution plan within the stipulated period. The Applicant highlighted the impact of Covid-19 on key personnel, limiting their ability to work on the plan effectively.

3. The RP and CoC, represented by learned senior counsels, countered the Applicant's allegations by presenting a timeline of events, including multiple extensions granted for submission of the resolution plan. They argued that the Applicant had been given ample opportunities to submit its plan, and the decision to reject further extensions was based on valid reasons, including concerns raised by other resolution applicants.

4. The Tribunal noted that despite several opportunities and extensions granted to the Applicant, it failed to submit the revised resolution plan. The Tribunal also observed that by September 2020, remote working technologies were widely available, and online meetings could have been conducted, minimizing the impact of Covid-19 on the resolution process.

5. It was emphasized that all resolution applicants, including the Applicant, were treated equally and provided with opportunities to participate in the process. The Tribunal concluded that neither the decision of the CoC nor the RP was unreasonable or arbitrary, leading to the dismissal of the Applicant's application as lacking merit.

6. The Tribunal's decision was based on the principle of equal opportunity provided to all resolution applicants, the availability of remote working options during the pandemic, and the absence of arbitrariness in the actions of the RP and CoC. The order directed the Registry to inform all parties and their counsels while allowing the issuance of a certified copy upon compliance with formalities.