2020 (10) TMI 275 - Tri - Insolvency and Bankruptcy

Maintainability of application - Section 60(5) of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the N.C.L.T. Rules, 2016 - Whether a successful Resolution Applicant can file an application under the provisions of Section 60(5) of the Code, for extending the time stipulated for complying with the terms and conditions mentioned in the Resolution Plan? HELD THAT - Nobody has questioned and nobody probably can question the Resolution Applicant after its Plan has already been approved by the COC and then by the Adjudicating Authority. It has already entered the shoes of the Corporate Debtor, and started doing all that was required to be done by the erstwhile Corporate Debtor, including the change of its directors for which necessary correspondence is stated to have been made by the Resolution Applicant. However, since the applicant has referred to and relied upon certain decisions, we may notice the view taken therein. On going through various decisions from the Hon'ble Supreme Court, Hon'ble Appellate Tribunal and our coordinate Bench of NCLT Chandigarh, whereby the period of lock-down has been ordered NOT to be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown in relation to a corporate insolvency resolution process, let us now revert back to the only question involved in the present set of facts and circumstances - Here in this case, the CIRP came to an end once the Resolution Plan had already been approved by the CoC, and thereafter by this Adjudicating Authority. The only issues that the Resolution Applicant has is, the litigation with other local authorities, which led him to file some litigation and the said litigation has delayed the execution of the Resolution Plan. For the delay in fighting litigation with other local authorities, no provision of the IBC could be invoked. That is a matter between the Resolution Applicant and the other third parties, for which no such permission or extension of time was required from this Adjudicating Authority. But since the Applicant has filed an application under Section 60(5), of the Code, even though these provisions could not have been invoked, but looking at the special circumstances due to the spread of Covid-19, this may also be considered to be the genuine contributory cause of delay in execution of the Resolution Plan. The implementation schedule of the Resolution Plan be extended for another period of 6 months from 24.05.2020 to 24.11.2020 - application allowed.

Summary

Issues Involved:
1. Termination of Power Purchase Agreement (PPA) by GRIDCO Ltd.
2. Implementation of the Resolution Plan.
3. Delay in execution due to non-cooperation from OPTCL and GRIDCO Ltd.
4. Impact of COVID-19 pandemic on the implementation schedule.
5. Jurisdiction under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016.

Issue-wise Detailed Analysis:

1. Termination of Power Purchase Agreement (PPA) by GRIDCO Ltd.:
The applicant, Chairman of the Monitoring Committee of Alex Green Energy Pvt. Ltd., challenged the termination of the PPA by GRIDCO Ltd. during the CIRP period. The Tribunal had previously set aside GRIDCO Ltd.'s decision, directing the restoration of the PPA as it violated the moratorium declared by the Adjudicating Authority.

2. Implementation of the Resolution Plan:
The Resolution Plan was approved on 25.11.2019, with commitments including the payment of ?11.07 Crores to stakeholders and the operationalization of the plant within six months. The applicant detailed the steps taken towards renovation and maintenance, including the investment of approximately ?1 crore for essential equipment and infrastructure.

3. Delay in Execution Due to Non-cooperation from OPTCL and GRIDCO Ltd.:
Despite repeated requests, OPTCL, a subsidiary of GRIDCO Ltd., did not restore the electricity connection necessary for plant operations. The applicant highlighted various correspondences and efforts to secure the connection, which were critical for testing and operationalizing the plant's machinery.

4. Impact of COVID-19 Pandemic on the Implementation Schedule:
The nationwide lockdown due to COVID-19 from 22nd March 2020 to 31st May 2020 severely impacted the implementation schedule. The applicant sought an extension of six months, from 24.05.2020 to 24.11.2020, citing the pandemic as a genuine cause of delay and emphasizing the hardships and prejudices faced by the Corporate Debtor and stakeholders.

5. Jurisdiction Under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016:
The Tribunal initially questioned the applicability of Section 60(5) for the extension request. However, considering the unprecedented COVID-19 situation and referencing decisions from the Hon'ble Supreme Court, NCLAT, and NCLT Chandigarh Bench, the Tribunal acknowledged the pandemic as a valid reason for extending timelines.

Conclusion:
The Tribunal, recognizing the special circumstances due to COVID-19, allowed the application under Section 60(5) of the IBC, 2016. The implementation schedule of the Resolution Plan was extended for another six months from 24.05.2020 to 24.11.2020, despite the initial reservations about the jurisdictional scope of Section 60(5). The application was disposed of with no orders as to costs, and the Registry was directed to serve copies to the parties via e-mail.