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2020 (8) TMI 539 - AT - Insolvency and BankruptcyPrinciples of Natural Justice - Appellant submits that the Adjudicating Authority passed impugned order dated 10.12.2019 by overlooking essential facts of the case and wrongly allowed the application filed by the Insolvency Resolution Professional for exclusion of time - HELD THAT - In the present case, as the corporate insolvency resolution process remained stayed for 166 days due to the interim order passed by the Adjudicating Authority on 15th September, 2017 which was vacated on 28th February, 2018, the Committee of Creditors / Resolution Professional rightly requested the Adjudicating Authority to exclude the period of 166 days for the purpose of counting the total period of 270 days. In an extraordinary circumstance(s), the Adjudicating Authority can extend the Corporate Insolvency Resolution Process beyond the time limit adumbrated in Section 12(3) of the Code. The extension of time can be only on an application made by the Insolvency Resolution Professional on the basis of Committee of Creditors as mentioned in sub-Section 2 and 3 of Section 12 of the IBC, 2016. A glance of the impugned order dated 10.12.2019 indicates that the order of the Adjudicating Authority dated 05.12.2018 was not communicated to the IRP as well as to the Corporate Debtor by the office of the Adjudicating Authority (NCLT III New Delhi), due to inadvertence. - In this connection, this Tribunal relatively pointed out that Maxim , Actus , Curiae , Neminem , Gravabit i.e. Act of the Court shall harm no Home-Sapien. Owing to an inadvertent omission on the part of the Registry of the Adjudicating Authority , exclusion of period was rightly allowed. Appeal dismissed.
Issues Involved:
1. Exclusion of time period in Corporate Insolvency Resolution Process (CIRP). 2. Communication of the order to the Insolvency Resolution Professional (IRP). 3. Adjudicating Authority’s power to extend CIRP beyond statutory limits. 4. Adherence to procedural aspects and model timeframe. 5. Legal precedents and exceptional circumstances for time exclusion. Issue-wise Detailed Analysis: 1. Exclusion of Time Period in CIRP: The Appellant challenged the order dated 10.12.2019 by the National Company Law Tribunal (NCLT) New Delhi Bench-III, which allowed the exclusion of 370 days from the CIRP period and extended it by 180 days. The Tribunal justified this exclusion due to the inadvertent failure to communicate the initial order dated 05.12.2018 to the IRP. 2. Communication of the Order to the IRP: The Appellant argued that the Respondent Company/Operational Creditor had full knowledge of the order dated 05.12.2018, but the IRP was informed only on 12.11.2019, after the lapse of 11 months and 7 days. The Tribunal acknowledged that the Registry of the Adjudicating Authority failed to communicate the order to the IRP and Corporate Debtor, which justified the exclusion of the period due to inadvertence. 3. Adjudicating Authority’s Power to Extend CIRP Beyond Statutory Limits: The Appellant contended that the Adjudicating Authority could not extend the CIRP period beyond 330 days as specified under the Second Proviso to Section 12(3) of the Insolvency and Bankruptcy Code (IBC), 2016. The Tribunal referred to the judgment in "Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta" and other precedents, which clarify that in exceptional cases, the Adjudicating Authority can extend the time on an application filed by the IRP if instructed by the Committee of Creditors. 4. Adherence to Procedural Aspects and Model Timeframe: The Tribunal emphasized that "Speedy" is the essence of the Bankruptcy Code, and authorities should adhere to the model timeframe envisaged in Regulation 40(A) of the IBBI (CIRP for corporate person) Regulations 2016. However, in extraordinary circumstances, the Adjudicating Authority can extend the CIRP beyond the time limit specified in Section 12(3) of the Code. 5. Legal Precedents and Exceptional Circumstances for Time Exclusion: The Tribunal cited several precedents, including "Quinn Logistics India Pvt. Ltd v. Mack Soft Tech Pvt. Ltd" and "Amar Remedies Ltd. v. IDBI Bank Ltd.", where time exclusions were allowed due to justified reasons and unforeseen circumstances. The Tribunal reiterated that if an application is filed by the IRP or Committee of Creditors for justified reasons, it is open to the Adjudicating Authority to exclude certain periods for counting the total period of 270 days, provided the facts and circumstances justify such exclusion. Conclusion: The Tribunal dismissed the appeal, upholding the NCLT's order dated 10.12.2019, which excluded 370 days from the CIRP period due to the inadvertent failure to communicate the initial order to the IRP. The Tribunal found no legal infirmities in the impugned order and emphasized the importance of adhering to procedural aspects and the model timeframe while allowing for exceptional circumstances to justify time exclusions.
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