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2021 (6) TMI 120 - Tri - Insolvency and BankruptcySeeking exclusion of certain time periods from the total time period of 330 days - Section 12 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - On the ground of lockdown imposed by the Central Government as well as State Government, we have excluded the period from 25.03.2020 to 30.06.2020 i.e. total 97 days while calculating the total period of CIRP and while applying the same principle in this matter, we hereby exclude the period from 25.03.2020 to 30.06.2020 i.e. total 97 days (instead of period from 25.03.2020 to 31.08.2020 as prayed by the applicant) while calculating the total period of CIRP. The applicant has not claimed the extension beyond the 330 days on the ground of exceptional circumstances rather he has claimed the period on the ground of pendency of the application - In terms of the second proviso of Section 12 (3) of the IBC, the corporate insolvency resolution process shall mandatorily be completed within a period of three hundred and thirty days from the insolvency commencement date, including any extension of the period of corporate insolvency resolution process granted under this section and the time taken in legal proceedings in relation to such resolution process of the corporate debtor . Petition disposed off.
Issues Involved:
1. Exclusion of time periods from the CIRP timeline due to the COVID-19 lockdown. 2. Exclusion of time periods from the CIRP timeline due to the judicial intervention for the replacement of the Resolution Professional (RP). Issue-wise Detailed Analysis: 1. Exclusion of time periods from the CIRP timeline due to the COVID-19 lockdown: The applicant sought the exclusion of 160 days from the CIRP timeline due to the nationwide lockdown imposed by the Central and State Governments from 25th March 2020 to 31st August 2020. The applicant cited the difficulty in conducting CIRP activities during this period, which included convening CoC meetings and processing necessary approvals. The tribunal acknowledged the impact of the lockdown and referred to previous orders where similar exclusions were granted. Specifically, the tribunal referenced the Hon'ble Supreme Court's order in Suo Motu Writ Petition (Civil) No. 03 of 2020 and the Hon'ble Appellate Tribunal's order in Suo Motu Company Appeal (AT) (Insolvency) No. 01 of 2020. Consequently, the tribunal decided to exclude 97 days (from 25th March 2020 to 30th June 2020) from the total CIRP period, instead of the 160 days requested by the applicant. 2. Exclusion of time periods from the CIRP timeline due to the judicial intervention for the replacement of the Resolution Professional (RP): The applicant also sought the exclusion of 123 days from the CIRP timeline due to the time taken for the adjudication of IA 4208/2020, which involved the replacement of the Resolution Professional. This period spanned from 27th September 2020 (date of filing) to 27th January 2021 (date of disposal). The applicant argued that this period should be excluded as the delay was caused by judicial proceedings. The tribunal considered the Hon'ble Supreme Court's judgment in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta & Ors., where it was held that the second proviso of Section 12(3) of the IBC is not mandatory and that extensions beyond 330 days could be granted in exceptional circumstances. However, the tribunal noted that the applicant did not claim the extension on the grounds of exceptional circumstances but rather on the pendency of the application. The tribunal emphasized that no stay order was passed during the CIRP or on the functioning of the RP. Therefore, the tribunal rejected the applicant's request to exclude the 123 days on the ground of the application's pendency. Conclusion: The tribunal partially granted the applicant's request by excluding 97 days due to the COVID-19 lockdown but rejected the request to exclude 123 days due to the judicial intervention for the replacement of the Resolution Professional. The application was disposed of accordingly.
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