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2019 (11) TMI 1168 - Tri - Insolvency and BankruptcyCIRP - non-cooperation by the suspended Board of Directors during Corporate Insolvency Resolution Process (CIRP) - exclusion of 105 days time period in the CIRP lost in the appointment of Resolution Professional - HELD THAT - This Tribunal holds that the RP is not at fault in causing the delay of the CIRP Process and the time lines stated by him must be excluded in computing the period of 270 days (with extended period of 90 days). The period of 268 days is excluded from the CIRP - Application disposed off.
Issues:
Application for exclusion of time period in Corporate Insolvency Resolution Process (CIRP) due to delays in appointment of Resolution Professional and non-cooperation by suspended Board of Directors. Analysis: 1. The application was filed under Sections 12 and 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking exclusion of 105 days lost in the CIRP process. The delays were attributed to the late appointment of the Resolution Professional and non-cooperation by the suspended Board of Directors during the period from 06.03.2019 to 06.06.2019, totaling 105 days out of the 270-day CIRP period. 2. The Resolution Professional (RP) detailed the sequence of events, starting from the appointment of the Interim Resolution Professional (IRP) on 20.09.2018, subsequent formation of the Committee of Creditors (CoC), and the eventual appointment of the RP on 30.11.2018. The RP encountered challenges in taking control of the Corporate Debtor's assets and records due to lack of cooperation from the suspended Board of Directors. 3. The RP faced further hurdles during the CIRP, including delays in accessing necessary financial records and non-compliance by the Corporate Debtor. These issues led to the RP seeking extensions and facing difficulties in the resolution process, ultimately impacting the overall timeline of the CIRP. 4. The RP highlighted the efforts made to secure cooperation and information from the Corporate Debtor, including sending multiple requests and initiating legal actions to address the non-compliance issues. Despite these efforts, the RP faced significant delays in the resolution process. 5. The RP presented case laws from various tribunals to support the application for exclusion of the 105-day period from the CIRP timeline, emphasizing that the delays were beyond their control and necessitated exclusion to ensure the successful completion of the resolution process. 6. After considering the arguments from both parties and reviewing the pleadings and case laws submitted, the Tribunal concluded that the RP was not responsible for the delays in the CIRP process. The Tribunal approved the exclusion of a total of 268 days from the CIRP timeline, as detailed in the order, to account for the delays caused by the circumstances outlined in the application. 7. Consequently, the Tribunal disposed of the application for exclusion of the specified time period, acknowledging the challenges faced by the RP and granting the requested exclusion to facilitate the effective completion of the Corporate Insolvency Resolution Process.
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