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2019 (10) TMI 963 - AT - Insolvency and BankruptcyInitiation of CIRP - exclusion of certain period for the purpose of counting 270 days - Section 12A of the I B Code - HELD THAT - The Adjudicating Authority should have allowed the intervening period i.e. the period when erstwhile Resolution Professional Mr. Martin S.K. Golla stopped functioning i.e. from 8th December, 2019 to 11th January, 2019 till the subsequent Resolution Professional (present Liquidator) took charge to place the application under Section 12A before the Committee of Creditors . The impugned order dated 8th March, 2019 including the order of liquidation is set aside and 35 days excluded from the date of receipt of this order by the Resolution Professional for the purpose of counting the period of 270 days so as to ensure Successful Resolution Process in terms of Section 12A - appeal allowed.
Issues:
1. Exclusion of certain periods for counting 270 days under the Insolvency and Bankruptcy Code, 2016. 2. Rejection of application under Section 60(5)(c) leading to liquidation. 3. Role and actions of the Resolution Professional and Liquidator. 4. Consideration of application under Section 12A by the Committee of Creditors. 5. Setting aside the impugned order and directions for successful resolution process. Analysis: 1. The appeal involved a challenge against the order passed by the Adjudicating Authority, which refused to exclude certain periods for the purpose of counting 270 days under the Insolvency and Bankruptcy Code, 2016. The Appellant argued that excluding the specific period would have allowed the Committee of Creditors to consider an application under Section 12A of the Code. 2. Despite the majority of shareholders of the Financial Creditor expressing their intent to consider the matter, the Adjudicating Authority rejected the plea for extension, resulting in the order for liquidation against the Corporate Debtor. 3. The Resolution Professional and subsequent Liquidator were involved in the case. The Resolution Professional had filed for exclusion of certain periods, citing the cancellation of the previous Resolution Professional's license. However, the Adjudicating Authority instructed the former Resolution Professional to continue for a brief period to ensure the Corporate Debtor's continuity, which was not effectively carried out. 4. The Liquidator, who took over as the Resolution Professional, highlighted the need for excluding an additional period for proper consideration of the Section 12A application by the Committee of Creditors. The Tribunal acknowledged the necessity to allow the intervening period when the former Resolution Professional ceased functioning until the new Liquidator took charge to present the application before the Committee of Creditors. 5. The Tribunal set aside the impugned order of liquidation and directed the exclusion of a specific number of days for the Resolution Professional to ensure a successful resolution process under Section 12A. The Resolution Professional was instructed to promptly convene a meeting of the Committee of Creditors and present the application under Section 12A, subject to the approval of 90% of the Financial Creditor's voting share. Failure to secure the required approval would result in liquidation as per the Tribunal's directions and the precedent set in a specific case. In conclusion, the Appellate Tribunal allowed the appeal, providing detailed directions for the Resolution Professional to follow in ensuring the successful resolution process within a specified timeframe.
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