2022 (2) TMI 742 - AT - Insolvency and Bankruptcy

Seeking extension of CIRP period - appellant has stated that the exclusion of 90 days from the CIRP of the CD would save the company from Liquidation - HELD THAT - This pandemic has, no doubt, interrupted the normalcy in various activities of Corporate Insolvency Resolution Process - The Resolution Professional has received a Resolution Plan from a Prospective Resolution Applicant which is under scrutiny of Resolution Professional/ Committee of Creditors. If granting of 90 days helps the Corporate Debtor to revive, then the basic objective of the I B Code, 2016 will be met. Liquidation is the last resort. Hence, this Tribunal is of the subjective opinion that no prejudice will be caused in allowing the instant appeal to prevent an aberration of justice and to promote substantial cause of justice. Appeal allowed - decided in favor of appellant.

Summary

Issues: Appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 against the impugned order denying exclusion of certain period of Corporate Insolvency Resolution Process (CIRP) despite Committee of Creditors' approval.

Analysis:
1. The appeal was filed under Section 61 of the Insolvency and Bankruptcy Code, 2016 against the order passed by the Adjudicating Authority, which refused to exclude a period of CIRP despite the Committee of Creditors' unanimous approval.

2. The Adjudicating Authority did not grant the exclusion of the CIRP period due to the assets of the Corporate Debtor being attached by CBI and ED, stating that CIRP cannot be prolonged indefinitely under such circumstances. The Committee of Creditors had passed a resolution seeking an extension of the CIRP period by 90 days due to lack of progress in property de-attachment and the impact of the pandemic.

3. The Committee of Creditors, in its meeting, approved the Resolution Professional's request for exclusion of the CIRP period by 90 days to reissue the Expression of Interest and complete the CIRP process. The Resolution was passed with 100% assent from the members of the CoC.

4. The appellant argued that excluding 90 days from the CIRP would prevent liquidation and allow for the revival of the Corporate Debtor. The appellant cited legal proceedings to release the attached property and referred to a judgment allowing discretion to extend the CIRP period beyond 330 days in exceptional cases.

5. The Tribunal considered the impact of the pandemic on CIRP activities, the Resolution Plan from a Prospective Resolution Applicant, and the objective of the I&B Code to prevent liquidation. The Tribunal concluded that granting the 90-day exclusion would serve the objective of the Code, prevent injustice, and promote substantial justice. Consequently, the appeal was allowed, setting aside the impugned order without costs.