2019 (9) TMI 1252 - Tri - Insolvency and Bankruptcy

Relevant date for completion of CIRP - period between the date of order of admission and the actual date on which the RP takes charge for completing the CIRP to count the total period of 270 days - HELD THAT - It is pertinent to mention that CIRP was initiated by order of this Tribunal dated 30.8.2018 and IRP Mr R. K. Bhuta was appointed by the same order. After that, CoC decided to change the IRP, and Mr Ramchandra D. Choudhary was appointed as RP on the recommendation of the CoC. Till the appointment of new RP, IRP was looking after the work of the RP. Therefore, there is no justification for the exclusion of the period as IRP was discharging his duties as RP for completion of the CIRP. Application dismissed.

Summary

Issues:
Exclusion of certain period for completion of CIRP under IBC, 2016.

Analysis:
The issue in this case revolves around the exclusion of a specific period for the completion of the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). The Resolution Professional (RP) filed MA 1873/2019 seeking the exclusion of 145 days, from 30.8.2018 to 23.1.2019, between the date of the order of admission and the actual date on which the RP took charge to complete the CIRP within the total period of 270 days. The applicant argued that certain unforeseen circumstances and challenges during the CIRP justified the exclusion of this period.

The applicant detailed the sequence of events during the CIRP, including the appointment of the Interim Resolution Professional (IRP), subsequent challenges with the suspended management of the Corporate Debtor, and the efforts made to progress the resolution process. The applicant highlighted the efforts made to manage the affairs of the Corporate Debtor, including seeking cooperation from the suspended Directors and addressing issues related to the appointment of the RP.

The applicant referred to the guidelines laid down by the Hon'ble NCLAT in Quinn Logistics India Pvt Ltd, which provide criteria for the exclusion of certain periods during the resolution process. These criteria include situations such as the stay of the CIRP by a court of law, absence of a functioning Resolution Professional, and the period between the order of admission and the actual date of RP taking charge. However, the Tribunal found that the grounds presented by the applicant for exclusion did not align with the guidelines provided by the NCLAT.

Ultimately, the Tribunal rejected the application for exclusion of the 145-day period, as it was deemed that the IRP had been discharging duties as the RP until the appointment of a new RP. As the statutory period of 270 days for completing the CIRP was ending without an approved resolution plan, the RP was informed of the option to apply for Liquidation under Section 33 of the IBC, 2016.