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2021 (5) TMI 778 - AT - Insolvency and BankruptcySeeking to exclude the time consumed on account of time loss due to the lockdown imposed by the Government of India and State Government and time consumed due to pendency of application - HELD THAT - he Adjudicating Authority rejected the prayer with regard to period seeking exclusion of time consumed in judicial intervention on the ground that the Appellant has not shown the exceptional circumstances for excluding the time. It is unequivocal that the country faced pandemic situation namely Covid -19 and due to the said pandemic the whole nation suffered and regular activities have come to a stand still. The Learned Adjudicating Authority ought to have considered the situation as exceptional circumstances for the reason of prevailing pandemic in the country and the CIRP process was still at nascent stage. It is an admitted fact that only 3 meetings have been convened from the date of commencement of CIRP till August, 2020. However, an Application is filed for replacing the RP. From the Judgment of the Hon'ble Supreme Court in Essar Steel India Ltd. Vs. Satish Kumar Ors. 2019 (11) TMI 731 - SUPREME COURT that the Adjudicating Authority and/or this Tribunal may extend time beyond 330 days in exceptional cases. The Appellant had shown the exceptional circumstances one is the imposition of lockdown and pendency of the judicial proceedings before the Adjudicating Authority. Apart from the above, the Hon'ble Supreme Court in a number of cases clearly held that the liquidation is the last resort. In the present case as discussed above the CIRP is at nascent stage and the Resolution Professional has to take forward duly complied with the procedure as prescribed under the Code for the purpose of Resolution of the Corporate Debtor instead of pushing the Corporate Debtor into liquidation. A total period of 92 days is excluded whereby the time lost due to judicial intervention from the total time period of 330 days - A total period of 160 days is excluded the time lost on account of imposition of lockdown from 25.03.2020 to 31.08.2020 - Further the time spent in filing this Appeal i.e. from 12.04.2021 to 04.05.2021 is also excluded. Appeal disposed off.
Issues Involved:
1. Exclusion of time consumed due to lockdown and pendency of judicial intervention in the Corporate Insolvency Resolution Process (CIRP). 2. Interpretation of Section 12(3) of the Insolvency and Bankruptcy Code (IBC) regarding the completion period of CIRP. 3. Consideration of exceptional circumstances for extending the CIRP period beyond 330 days. Analysis: Issue 1: Exclusion of time due to lockdown and pendency of judicial intervention The Appellant filed an Application seeking exclusion of time lost during the lockdown and due to the pendency of a specific judicial intervention. The Adjudicating Authority excluded only 97 days of the lockdown period instead of the requested 160 days and rejected the exclusion of time due to judicial intervention. The Appellant argued that the exclusion of the full period was necessary to prevent the Corporate Debtor from going into liquidation. The Appellant cited the impact of the pandemic as an exceptional circumstance warranting the exclusion of time. The Adjudicating Authority emphasized the mandatory completion of CIRP within 330 days, including any extensions. Issue 2: Interpretation of Section 12(3) of the IBC The Adjudicating Authority relied on the provisions of the IBC to determine that time consumed in judicial intervention could be considered as an extension of the CIRP period, as mandated under the Code. The Authority highlighted the absence of exceptional circumstances beyond 330 days for the exclusion of time. The Appellant referred to the judgment in "Essar Steel India Ltd. Vs. Satish Kumar & Ors." to support the argument for extending the CIRP period in exceptional cases. Issue 3: Consideration of exceptional circumstances for extending CIRP period The Appellant contended that exceptional circumstances, such as the lockdown and pending judicial proceedings, justified extending the CIRP period beyond 330 days to avoid liquidation. Citing previous judgments and the interest of stakeholders, the Appellant argued for a holistic approach to ensure the successful resolution of the Corporate Debtor. The Tribunal, considering the exceptional circumstances presented, decided to exclude 92 days due to judicial intervention and 160 days due to the lockdown, along with the time spent in filing the Appeal. In conclusion, the Tribunal's decision to exclude specific periods from the CIRP timeline reflects a balanced approach considering the unique circumstances of the case and the need to safeguard the interests of all stakeholders involved in the insolvency resolution process.
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