2021 (8) TMI 615 - AT - Insolvency and Bankruptcy

Seeking clarification of the order dated 04.03.2021 - Rule 11 of National Company Law Appellate Tribunal, Rules, 2016. Clarification - I It is requested that the exclusion for the period when the order was passed i.e. 04.03.2021 may be granted, otherwise it would cause irreparable loss to the Applicant and also all the homebuyers - HELD THAT - As per earlier order, the allottees were directed to deposit balance amount and pay 90% by 15.03.2020. Now, the allottees are directed to deposit balance amount and pay 90% by 31.08.2021. Clarification II In Para 18 of the order dated 04.03.2021 this Tribunal has observed that the amount invested by him as financial creditor in terms of the judgment shall stand forfeited and - It is stated that such observation is amounting to altering the judgment dated 05.02.2020, therefore, this condition may be removed/deleted - there are no reason to remove/delete aforesaid condition. Clarification III The Adjudicating Authority may be directed to decide the Application for replacement of IRP in time bound manner. As we have already noted above that the Adjudicating Authority vide order dated 01.06.2021 replaced the IRP and appointed Mr. Manoj Kulshrestha as IRP, who has taken charge on 22.06.2021. Therefore, no clarification or direction is required. Application disposed off.

Summary

Issues:
Clarification of order dated 04.03.2021 regarding extension of timeline, exclusion period, and forfeiture of investment by financial creditor.

Analysis:
The judgment involved an Application seeking clarification of an order dated 04.03.2021 related to the extension of timelines for a Corporate Insolvency Resolution Process (CIRP) against a Corporate Debtor, an Infrastructure Company. The Applicant, a Promoter, had filed the original Appeal against the Adjudicating Authority's order admitting the CIRP application. The Applicant sought directions for an extension of timelines due to the impact of Covid-19. The Appellate Tribunal had earlier decided on the Appeal on 05.02.2020 and subsequently received applications for further clarifications and extensions.

The Applicant filed subsequent Applications seeking clarification on various aspects of the order dated 04.03.2021. The key points of contention included the exclusion period for the extension of timelines, removal of a condition regarding the forfeiture of investment by a financial creditor, and the replacement of the Insolvency Resolution Professional (IRP). The Respondents included various stakeholders such as homebuyers, financial creditors, and associations representing apartment buyers.

The Tribunal considered the submissions of all parties, including the progress report of the project provided by the IRP. It was noted that the IRP had taken steps to secure funds and continue work on the project. The Tribunal clarified the revised timelines for different project aspects, allowing for exclusions up to 04.03.2021. Additionally, the Tribunal addressed the issue of the condition regarding the forfeiture of investment by a financial creditor, deciding to retain the condition as stated in the previous judgment.

Regarding the replacement of the IRP, the Tribunal noted that the Adjudicating Authority had already appointed a new IRP, and thus no further clarification or direction was required. The Tribunal emphasized that all directions from the earlier Judgment remained intact, except for the extended timelines. Ultimately, the Application seeking clarification was disposed of without any order as to costs.

In conclusion, the judgment provided detailed clarifications on the extension of timelines, exclusion periods, and the conditions related to the forfeiture of investment by a financial creditor in the context of a Corporate Insolvency Resolution Process. The Tribunal's decision aimed to balance the interests of various stakeholders involved in the resolution process.