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2021 (10) TMI 812 - Tri - Insolvency and BankruptcySeeking an exclusion of 197 days on account of, inter-alia, delays caused as a result of restrictions and lockdowns imposed because of Covid-19 and time taken in replacement of the interim resolution professional - HELD THAT - It is stated by the Applicant that homebuyers constitute 50.38% of the CoC, on account of being dissatisfied with the IRP, voted against his confirmation as RP during the 1st CoC meeting held on 02.12.2020. Only a minority of 45.35% of the CoC voted in favour of appointing the IRP as the RP of the Corporate Debtor, falling short of the 66% threshold. Subsequently, the confirmation of the Applicant as the RP was put for vote during the 5th CoC meeting held on 04.05.2021, which was duly approved by 68.87% of the CoC. The appointment of the Applicant as the RP was eventually confirmed by this Hon'ble Adjudicating Authority vide its order dated 09.06.2021. This bench, after taking into consideration the facts and circumstances of the present case, is satisfied that the exclusion being sought by RP is bona fide and the same needs to be granted. Hence, the period between 06.12.2020 to 02.01.2021 (27 days), 17.03.2021 to 30.04.2021 (44 days), 01.05.2021 to 31.05.2021 (30 days), 01.05.2021 to 05.07.2021 (5 days excluding the overlap period), on account of restrictions imposed by the Noida police, Government of Uttar Pradesh and the Government of Delhi, stands excluded from the CIRP of the Corporate Debtor - Further, the exclusion being sought for the intervening time period for confirmation replacement of RP and on account of extension of time for Form G, such exclusion cannot be granted as that period is to be calculated in the CIRP period of the corporate debtor. Application disposed off.
Issues:
- Exclusion of days in Corporate Insolvency Resolution Process (CIRP) due to Covid-19 restrictions and replacement of interim resolution professional (IRP) - Applicability of orders by Hon'ble Supreme Court and National Company Law Appellate Tribunal (NCLAT) regarding extension of limitation periods due to Covid-19 - Confirmation of Resolution Professional (RP) by Committee of Creditors (CoC) Analysis: 1. Exclusion of Days in CIRP due to Covid-19 Restrictions and IRP Replacement: The Resolution Professional (RP) filed an application seeking exclusion of 197 days in the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor due to delays caused by Covid-19 restrictions and the time taken in replacing the Interim Resolution Professional (IRP). The RP highlighted various restrictions and lockdowns imposed by the Noida Police, Government of Uttar Pradesh, and Government of Delhi, totaling 136 days, which were sought to be excluded from the CIRP period. The Tribunal acknowledged the impact of Covid-19 and granted the exclusion for the specified days, considering it necessary for the Insolvency Resolution and value maximization objectives of the Code. 2. Applicability of Supreme Court and NCLAT Orders on Limitation Period Extension: The RP referenced orders by the Hon'ble Supreme Court and the National Company Law Appellate Tribunal (NCLAT) regarding the extension of limitation periods in judicial proceedings due to Covid-19. The Supreme Court's orders dated 23.03.2020 and 27.04.2021 extended the period of limitation for all proceedings, and the NCLAT order dated 30.03.2020 specifically excluded the lockdown period for the purpose of the Resolution Process under Section 12 of the Insolvency and Bankruptcy Code, 2016. These orders were cited to support the RP's request for exclusion of days in the CIRP. 3. Confirmation of RP by CoC: The RP highlighted the confirmation process by the Committee of Creditors (CoC), where initially, a minority of the CoC members voted in favor of appointing the IRP as the RP, falling short of the required threshold. However, during a subsequent meeting, the majority of the CoC approved the RP's appointment. The Tribunal confirmed the RP's appointment considering the satisfaction that the exclusion sought was genuine and necessary. The exclusion was granted for specific periods due to Covid-19 restrictions, while the exclusion for the confirmation and replacement of RP and extension of time for Form G was not allowed as it should be calculated within the CIRP period. In conclusion, the Tribunal disposed of the application in accordance with the order, granting exclusion of certain days in the CIRP due to Covid-19 restrictions and IRP replacement, while clarifying the non-applicability of exclusion for other specific periods within the CIRP timeline.
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