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2019 (11) TMI 902 - AT - Insolvency and BankruptcyApproval of Resolution plan - exclusion of 135 days period from 27th August, 2018 to 8th January, 2019 and in addition to the period of 147 days starting from 9th November, 2018 to 4th April, 2019 from the Corporate Insolvency Resolution Process - HELD THAT - In the present case, we find that during the Corporate Insolvency Resolution Process i.e. completion of 180 days, 3 Mining Leases were renewed by the Government of Telangana. It is true that the Mining Leases are the assets of the Corporate Debtor and Information-Memorandum should have been reflected the assets. It is informed that the aforesaid asset was reflected in the Information-Memorandum but in view of the fact that the Mining Leases were not responsible to have renewed at the end of 180 days. However, we find because of the fact that it was renewed at the time of end of 180 days i.e. on 8th January, 2019, the Adjudicating Authority allowed further 90 days on 10th January, 2019 for completion of the process. Even during the extended period of 90 days, there was nothing to suggest that Committee of Creditors took any step for calling of fresh resolution plan, though it was open to them to call for fresh resolution plan or information that mining lease, which is reflected in the Information-Memorandum , has already been renewed. 90 days having already allowed, we find no ground is made out to exclude any period for completion of the resolution process and in view of the fact that 270 days have already been passed, the Adjudicating authority has no other option but to pass order of liquidation. If proceedings u/s 230 of the Companies Act, 2013 is taken up, it will be open to the Liquidator to take up with creditors or class of creditors (who was the Financial Creditors) and if any of the resolution plan has filed or may be called for following the same procedure of I B Code , may accept such plan as one of the scheme taking into consideration if it is viable and feasible. Appeal disposed off.
Issues: Exclusion of period from Corporate Insolvency Resolution Process, Application of Insolvency and Bankruptcy Code, Approval of Resolution Plans, Liquidation Order, Role of Liquidator, Steps under Section 230 of Companies Act, 2013
The judgment by the National Company Law Appellate Tribunal, New Delhi, involved the Appellant, a Financial Creditor, seeking exclusion of specific periods from the Corporate Insolvency Resolution Process of a Corporate Debtor. The Appellant requested exclusion of 135 days for pending mining lease renewal and an additional 147 days due to another pending application. The Adjudicating Authority had already allowed a 90-day extension, considering the mining leases were renewed during the process. The Appellant argued that Section 28 of the Insolvency and Bankruptcy Code was wrongly referenced before Committee of Creditors' approval, affecting actions required by the Financial Creditor. The Adjudicating Authority's refusal to exclude further periods led to the Tribunal's decision. During the resolution process, the Tribunal noted the renewal of three Mining Leases, crucial assets of the Corporate Debtor, by the Government of Telangana after the initial 180 days. Despite the renewal, the Committee of Creditors did not progress with resolution plans during the extended 90-day period. As 270 days had passed without progress, the Adjudicating Authority faced liquidation orders, pending potential amendments extending the period to 330 days. The Tribunal highlighted the need for Committee of Creditors to utilize any future amendments to avoid liquidation, emphasizing the importance of timely resolution plans. Furthermore, the judgment addressed the role of the Liquidator in following specific directions provided by the Appellate Tribunal for actions under Section 230 of the Companies Act, 2013. The Liquidator was instructed to engage with creditors for potential compromises or arrangements, with the option of outright sale if needed to support the Corporate Debtor's employees. The Tribunal emphasized the importance of adhering to the principles of the Insolvency and Bankruptcy Code for fair treatment of stakeholders and maximizing Corporate Debtor's assets. In conclusion, the Tribunal disposed of the appeals with detailed directions for the Liquidator to proceed under Section 230 of the Companies Act, 2013, ensuring compliance with the observations provided. The judgment underscored the importance of timely actions, adherence to legal provisions, and stakeholder considerations in insolvency resolution processes to avoid liquidation and promote effective restructuring for the benefit of all involved parties.
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