2021 (9) TMI 8 - Tri - Insolvency and Bankruptcy

Seeking to grant an extension of 120 days to the Applicant for balance payment - seeking to direct the Resolution Professional (RP) to complete all formalities including but not limited to opening of Bank Account, transfer of shareholding and directorship and hand over the management of the Corporate Debtor to the Resolution Applicant - HELD THAT - The Resolution Applicant is seeking for extension of 120 days for making balance payment of ₹ 12.78 Crores as per the approved Resolution Plan from the Adjudicating Authority. Further, the matter has been negotiated by both the parties and approval has already been granted by the CoC i.e., sole financial creditor, and the successful Resolution Applicant agreed to pay ₹ 15,00,000/- extra over and above to the agreed amount. In view of the same, an extension of 03 months of time is granted for making the balance payment. Petition disposed of by granting 03 (Three) months of time for making the balance payment.

Summary

Issues:
1. Extension of time for balance payment under the IBC, 2016.

Detailed Analysis:
1. The case involved an application filed by Bhadrashree Steel and Power Limited seeking an extension of 120 days for the balance payment of ?12.78 Crores under the Insolvency and Bankruptcy Code, 2016 (IBC). The applicant requested the Resolution Professional to complete formalities and hand over management of the Corporate Debtor to the Resolution Applicant. The delay in implementation was attributed to the inaction of the RP despite repeated requests by the Applicant and the impact of the COVID-19 lockdown on financial activities.

2. The Resolution Professional (RP) did not object to granting time for the balance payment and implementation of the Resolution Plan within 120 days from the approval order. The RP's inaction in discharging duties, obtaining necessary approvals, and failure to hand over management control affected the plan's implementation adversely. Discussions in the Monitoring Committee led to the Resolution Applicant filing an application seeking an extension of time for payment as per the approved Resolution Plan.

3. The Tribunal considered the negotiations between the parties, where the CoC (sole financial creditor) approved the extension, and the Resolution Applicant agreed to pay an additional amount. Consequently, an extension of three months was granted for making the balance payment of ?12.78 Crores. The Tribunal disposed of the application by allowing the extension and did not order any costs to be paid.

This judgment addressed the issue of granting an extension of time for balance payment under the IBC, 2016, considering the circumstances, negotiations between the parties, and the RP's role in the plan's implementation. The Tribunal's decision to grant a three-month extension highlighted the importance of cooperation between stakeholders in insolvency proceedings and the impact of external factors like the COVID-19 pandemic on financial activities.