2019 (7) TMI 835 - AT - Insolvency and Bankruptcy

Validity of Resolution Plan - time limitation - Resolution Professional moved application under Section 60(5) for exclusion of certain period for counting the statutory period for computation of Corporate Insolvency Resolution Process period, wherein only three days has been excluded - HELD THAT - The resolution process is made successful and not to allow the Corporate Debtor to be liquidated, the delay which took place during the pendency of the application for replacement of the Interim Resolution Professional before the Adjudicating Authority should be excluded for the purpose of counting 270 days of Corporate Insolvency Resolution Process period. The Resolution Professional and the Committee of Creditors are allowed 89 days to conclude the Corporate Insolvency Resolution Process, to be counted from the date of receipt of free certified copy of the present order by learned counsel for the Resolution Professional. It is for the Committee of Creditors to decide whether further Information Memorandum should be issued calling for more Resolution plans or to ask the Resolution Applicant who has already submitted the Expression of Interest to submit the Resolution Plan. Appeal disposed off.

Summary

Issues:
1. Appeal by Operational Creditor and Director against a common order passed by the Adjudicating Authority.
2. Replacement of Interim Resolution Professional and delay in the Corporate Insolvency Resolution Process.
3. Exclusion of certain period for counting the statutory period.
4. Resolution plans consideration and Committee of Creditors decision-making process.

Analysis:
1. The appeals were filed by an Operational Creditor and a Director against a common order passed by the Adjudicating Authority, where only three days were excluded for counting the period of 270 days in the Corporate Insolvency Resolution Process.

2. The Committee of Creditors had resolved to replace the Interim Resolution Professional, causing a delay in the process. The subsequent Resolution Professional joined after a delay, affecting the preparation of the Information Memorandum and the consideration of resolution plans. The Appellants argued that approximately 89 days of delay should be excluded from the total period.

3. The Resolution Professional supported the argument for excluding the delay period to allow for the calling of more resolution plans. The Tribunal, after hearing all parties, decided to exclude the 89 days of delay caused by the pendency of the application for the replacement of the Interim Resolution Professional. This exclusion was to ensure the success of the resolution process and prevent the liquidation of the Corporate Debtor.

4. The Tribunal modified the impugned order to allow the exclusion of 89 days for counting the 270-day period of the Corporate Insolvency Resolution Process. The Resolution Professional and the Committee of Creditors were granted this additional time to conclude the process. The Committee was given the authority to decide on issuing further Information Memoranda or considering Resolution Plans already submitted. The appeals were disposed of with these directions, leaving the decision-making process to the Committee of Creditors.