2021 (1) TMI 508 - Tri - Insolvency and Bankruptcy

Seeking to participate in the CIR process of the corporate debtor - section 60(5) of the Insolvency and Bankruptcy Code, 2016 Read with Rule 11 of NCLT Rules, 2016 - HELD THAT - It is interesting to note that original date fixed for submission of EOI was on 01.01.2020 and later it was extended from time to time and last date for submission of EOI was 06.03.2020. The last date for submission of Resolution Plan was 06.04.2020 which was extended till 20.05.2020. It is interesting to note that applicant has not submitted any EOI though the period was extended till 06.03.2020. Even the time for filing resolution plan was extended from time to time and last date was 20.05.2020 for filing resolution plan - The applicant has not submitted either EOI or resolution plan in the extended period. The applicant claimed to have submitted the EOI long after the date fixed for EOI. Regulation 36(A)(6) provides if EOI received after due date shall be rejected. No resolution plan to be received by RP after the due date. Hon'ble NCLAT has held in the decision reported in KOTAK INVESTMENT ADVISORS LIMITED VERSUS MR KRISHNA CHAMADIA (RESOLUTION PROFESSIONAL IN THE MATTER OF RICOH INDIA LIMITED) MR KALPRAJ DHARAMSHI, MS REKHA JHUNJHUNWALA 2020 (8) TMI 389 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI that Resolution Plans received after due date can't be placed before COC by the RP and COC can't consider the same. The applicant is simply asking for direction for participation of applicant in the CIRP and to submit resolution plan. Such a request can't be granted in favour of applicant because the time line prescribed for EOI and for receiving resolution plan was expired. Application dismissed.

Summary

Issues:
Interlocutory application seeking permission to participate in CIR process of corporate debtor under IBC, 2016.

Detailed Analysis:

1. Applicant's Submission:
The applicant, a renewable energy company, sought permission to participate in the CIR process of the corporate debtor despite missing the deadline for submitting the resolution plan. The applicant argued that due to the COVID-19 pandemic, the CIRP period was extended, and they should be allowed to submit their resolution plan. They cited instances where belated submissions were accepted by other benches of NCLT. The applicant emphasized that allowing them to participate would not prejudice any party.

2. Respondent's Reply:
The Resolution Professional denied the applicant's allegations and highlighted the timeline of events, including extensions granted for the submission of EOI and resolution plans. They pointed out that the applicant's EOI was rejected as it was submitted after the specified deadline, in line with Regulation 36(6) of IBBI Regulations, 2016. The Respondent also referenced a similar case from the NCLT Bangalore Bench to support their argument.

3. Applicant's Counsel Argument:
The applicant's counsel argued that rejecting the resolution plan solely based on technicalities without considering its merits goes against the spirit of the IBC. They referred to a Mumbai Bench decision that prioritized the Code's objective over regulations. The counsel contended that the applicant's participation would maximize asset value, and they were ready to submit a resolution plan promptly upon receiving the RFRP.

4. Respondent's Counsel Counter-Argument:
The Respondent's counsel opposed the application, highlighting the adherence to the prescribed timeline for EOI and resolution plan submissions. They emphasized that the applicant's EOI was beyond the deadline and cited regulations prohibiting consideration of late submissions. The counsel also mentioned a NCLT Bangalore Bench decision supporting the rejection of late EOIs.

5. Tribunal's Decision:
The Tribunal noted the sequence of events, extensions granted, and the applicant's failure to submit either EOI or resolution plan within the extended deadlines. Citing Regulation 36(A)(6) and a NCLAT decision, the Tribunal concluded that late submissions cannot be entertained, and COC cannot consider them. Consequently, the application was dismissed as the applicant's request for participation was beyond the prescribed timeline, leading to rejection.

This detailed analysis outlines the arguments presented by both parties, the regulatory framework governing the submission timelines, and the Tribunal's decision based on the facts and legal provisions involved in the case.