2021 (3) TMI 147 - Tri - Insolvency and Bankruptcy

Seeking extension of the period of Corporate Insolvency Resolution Process for a further period of 90 days - section 12(2) of IBC 2016 - HELD THAT - In view of the fact that there is only one Prospective Resolution Applicant before the Committee of Creditors as on date and the time to examine the resolution plan under the Code and verification of the contents of the resolution plan is limited, and also the intention of the Committee of Creditors to invite fresh Expression of Interest to enable more bona fide resolution applicants to bid for the revival of the Corporate Debtor seems to be reasonable, I am of the view that the request of Resolution Professional to extend the CIRP period for a further period of 90 days is justifiable. The prayer of the Resolution Professional to extend the period of Corporate Insolvency Resolution Process for a further period of 90 days from 18-10-2020 is hereby allowed.

Summary

Issues involved:
1. Extension of the period of Corporate Insolvency Resolution Process under section 12(2) of IBC 2016.
2. Permission to invite fresh Expression of Interest under Regulation 36A of IBBI Regulations.

Analysis:

Issue 1: Extension of CIRP Period
The Resolution Professional (RP) filed an IA seeking an extension of the Corporate Insolvency Resolution Process (CIRP) period by 90 days to complete the process. The original due date for completion was extended to 18-10-2020 due to various circumstances, including the lockdown imposed by the Government of India. The RP highlighted the need to conduct due diligence on the Prospective Resolution Applicant and comply with the requirements of Section 30 of the IBC 2016. The Committee of Creditors (CoC) unanimously passed a resolution to extend the CIRP period by 90 days, considering the constraints faced in examining the Resolution Plan and verifying its contents. The Tribunal, after considering the RP's arguments and the CoC's resolution, allowed the extension, directing the RP to complete the CIRP by 16-1-2021.

Issue 2: Invitation for Fresh Expression of Interest
The RP also requested permission to invite Fresh Expression of Interest during the extended CIRP period in case the current plan under consideration by the CoC is rejected. The CoC believed that the COVID-19 pandemic situation might have deterred genuine Resolution Applicants from participating initially. The Tribunal acknowledged the need to enable more bona fide applicants to bid for the revival of the Corporate Debtor. Therefore, the RP was granted permission to invite Fresh Expression of Interest if the current plan is rejected by the CoC.

In conclusion, the Tribunal allowed the extension of the CIRP period by 90 days and permitted the RP to invite Fresh Expression of Interest if the current plan is not approved, emphasizing adherence to IBBI Rules and Regulations. The IA was disposed of accordingly.