2021 (2) TMI 445 - Tri - Insolvency and Bankruptcy

Seeking CIRP timeline of 27 days from the available 60 days exclusion timeline for approval of Resolution Plan - section 12 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - A bare perusal of Section 12 of the IBC, 2016 mandates that the CIRP period should be completed within the period of 330 days. Further, it has been clearly stated that the CIRP extension, beyond the stipulated period of 180 days, shall be granted only once, not exceeding 90 days. However, the IBC, Amendment Act, 2019 fails to address on how this Tribunal can treat the Applications which seek for CIRP extension beyond the period of 270 days to 330 days. In the facts of the present case, it is evident from the records that CIRP extension was already granted once for a period of 60 days from 18.01.2020 till 18.03.2020 and thereby the 240 days period of CIRP came to an end on 18.03.2020. The second proviso to sub-section 3 of Section 12 of the IBC, 2016 states that the CIRP shall be mandatorily completed within a period of 330 days from the Insolvency commencement date, including any extension of the period of the CIRP granted under this section and the time taken in the legal proceedings - thus, it can be inferred from the second proviso to subsection 3 of Section 12 of the IBC, 2016 that after granting extension once for a maximum period of 90 days, and upon 270 days of the CIRP coming to an end, this Tribunal has the power to exclude certain period from the CIRP proceedings provided the said exclusion period should not exceed the total CIRP period of 330 days. In other words, exclusion can be granted only for a period of 60 days after the expiry of 270 days. As to the facts of the present case, it is seen that the Resolution Plan is already approved by the CoC and is pending adjudication before this Tribunal and also keeping in mind the rationale of the decision of the Supreme Court in the matter of COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS 2019 (11) TMI 731 - SUPREME COURT , the period of lockdown from 25.03.2020 till 31.08.2020 is excluded in view of Regulation 40C of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and also the period of 27 days i.e. from 19.03.2020 till 24.03.2020 (6 days) and from 01.09.2020 to 21.09.2020 (21 days) is also excluded from the period of CIRP - Since, it was submitted by the Learned Counsel for the Resolution Professional that the Resolution Plan is already filed before this Tribunal on 21.09.2020, extension of CIRP period beyond the period as already excluded does not arise. Application allowed.

Summary

Issues:
- Application seeking exclusion of 27 days from the CIRP timeline for approval of Resolution Plan under IBC, 2016.
- Interpretation of Section 12 of IBC, 2016 regarding the completion timeline of the insolvency resolution process.
- Invocation of Regulation 40C of IBBI Regulations for excluding the lockdown period due to Covid-19 from the CIRP timeline.

Analysis:

1. The application was filed by the Resolution Professional under Section 12 of the Insolvency and Bankruptcy Code, 2016, requesting the exclusion of 27 days from the available 60 days exclusion timeline for the approval of the Resolution Plan. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor, and various steps were taken in accordance with the IBC, 2016, including the appointment of Resolution Professional and valuation of assets.

2. The Tribunal noted the provisions of Section 12 of IBC, 2016, which mandate the completion of the CIRP within 180 days, extendable by a maximum of 90 days. The Tribunal highlighted the lack of clarity in the IBC Amendment Act, 2019 regarding extensions beyond 270 days. In this case, an extension of 60 days was already granted, leading to the end of the 240-day period on 18.03.2020, with a mandatory completion deadline of 330 days.

3. Considering the circumstances and the impact of the Covid-19 pandemic, the Tribunal analyzed Regulation 40C of IBBI Regulations, which excludes the lockdown period from the CIRP timeline. The Resolution Professional sought exclusion of specific days from the CIRP timeline, supported by the rationale of the Supreme Court's decision in a relevant case.

4. The Tribunal allowed the application, excluding the requested days from the CIRP timeline, in line with Regulation 40C and the specific circumstances of the case. The Resolution Plan had already been approved by the CoC and was pending adjudication, leading to the exclusion of lockdown period and additional days as requested. The Tribunal emphasized that further extension of the CIRP period was unnecessary due to the Resolution Plan being already filed.

5. In conclusion, the Tribunal granted the exclusion of the requested days from the CIRP timeline, considering the provisions of IBC, 2016, and the impact of the Covid-19 lockdown. The decision was based on a thorough analysis of the legal framework and the specific facts of the case, ensuring compliance with the relevant regulations and precedents.