2017 (9) TMI 256 - HC - Insolvency and Bankruptcy

Seeking amendment of the cut-off date in the scheme sanctioned by the BIFR - petitioner seeks extension of the period of rehabilitation from 31.03.2018 to 31.03.2020, without any change in the terms and conditions of the scheme sanctioned by the BIFR - Insolvency and Bankruptcy Code, 2016 applicability - Held that - Once BIFR and AAIFR have been dissolved under the Insolvency and Bankruptcy Code, 2016, the adjudicating authority for insolvent companies is the National Company Law Tribunal (NCLT). In view of the order dated 24.05.2017 issued by the Government, clarifying the position in respect of companies that have sanctioned schemes, and further empowering the NCLT to approve the resolution plan, no further orders are required to be passed on the present petition, which is accordingly disposed of along with the pending application with liberty granted to the petitioner to approach the NCLT (Calcutta), if so advised.

Summary

Issues:
1. Amendment of cut-off date in the scheme sanctioned by BIFR
2. Extension of the period of rehabilitation
3. Applicability of Insolvency and Bankruptcy Code, 2016 to sanctioned schemes

Analysis:
1. The petitioner sought to amend the cut-off date in the scheme sanctioned by the BIFR from 31.03.2010 to 31.03.2012. The counsel for the petitioner highlighted that post the dissolution of BIFR and AAIFR, the Insolvency and Bankruptcy Code, 2016 came into effect. It was emphasized that the scheme sanctioned by the BIFR continued to be binding even after the repeal of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003.

2. Additionally, the petitioner requested an extension of the rehabilitation period from 31.03.2018 to 31.03.2020, without altering the terms and conditions of the scheme approved by the BIFR. The counsel pointed out that with the dissolution of BIFR and AAIFR, the National Company Law Tribunal (NCLT) became the adjudicating authority for insolvent companies. Furthermore, the Ministry of Corporate Affairs issued an order on 24.05.2017, providing clarifications and amendments regarding schemes sanctioned under the SICA.

3. It was argued that the Insolvency and Bankruptcy Code, 2016 would now apply to sanctioned schemes, including the one pertaining to the petitioner's company. Considering the clarifications issued by the Government and the empowerment of NCLT to approve resolution plans for companies with sanctioned schemes, the court found no necessity for further orders on the petition. The petition was disposed of, with liberty granted to the petitioner to approach the NCLT (Calcutta) if needed for any future actions related to the matter.