2022 (2) TMI 1012 - Tri - Insolvency and Bankruptcy

Seeking exclusion of certain period in the CIRP period of the corporate debtor so that the CIRP period can be extended till 02.03.2022 - Section 60(5) of the Insolvency and Bankruptcy Code 2016 read with Regulation 47A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016 - HELD THAT - Considering the guidelines given by Hon ble Supreme Court in para 127 of its judgment in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS 2019 (11) TMI 731 - SUPREME COURT where it was held ordinarily the time taken in relation to the corporate resolution process of the corporate debtor must be completed within the outer limit of 330 days from the insolvency commencement date including extensions and the time taken in legal proceedings. However on the facts of a given case if it can be shown to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation and that the time taken in legal proceedings is largely due to factors owing to which the fault cannot be ascribed to the litigants before the Adjudicating Authority and/or Appellate Tribunal the delay or a large part thereof being attributable to the tardy process of the Adjudicating Authority and/or the Appellate Tribunal itself it may be open in such cases for the Adjudicating Authority and/or Appellate 132 Tribunal to extend time beyond 330 days. Likewise even under the newly added proviso to Section 12 if by reason of all the aforesaid factors the grace period of 90 days from the date of commencement of the Amending Act of 2019 is exceeded there again a discretion can be exercised by the Adjudicating Authority and/or Appellate Tribunal to further extend time keeping the aforesaid parameters in mind. It is only in such exceptional cases that time can be extended the general rule being that 330 days is the outer limit within which resolution of the stressed assets of the corporate debtor must take place beyond which the corporate debtor is to be driven into liquidation. The corporate debtor can be put on its feet. Hence being an exceptional case it justifies exclusion and extension of the period of CIRP - the period as prayed for is hereby excluded from the CIRP and thus the CIRP period is hereby extended till 02.03.2022 - Application allowed.

Summary

Issues involved:
- Application for exclusion of certain periods in the CIRP period of the corporate debtor under the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:
1. The application was filed by the Resolution Professional seeking exclusion of specific periods in the Corporate Insolvency Resolution Process (CIRP) of the debtor to extend the CIRP period until a specified date.
2. The CIRP of the Corporate Debtor commenced on a particular date with the appointment of the Interim Resolution Professional (IRP) who was later replaced by the Resolution Professional (RP) of the corporate debtor.
3. The application sought exclusion of periods due to various reasons such as the Covid Second wave, lockdown, incapacitation of the Resolution Professional, delays in approving resolutions, and personal circumstances of the Resolution Professional.
4. The Resolution Professional highlighted that the Resolution Plan had been approved by the Committee of Creditors (CoC) but final voting was delayed due to the onset of the third wave of the pandemic, leading to further exclusion of days.
5. The Counsel emphasized that as the Resolution Plan had been approved, there were substantial chances of the corporate debtor's revival, justifying the extension of the CIRP period.
6. Referring to guidelines from a Supreme Court judgment, the Tribunal considered the exceptional circumstances of the case and the interests of stakeholders in deciding to extend the CIRP period beyond the usual limit of 330 days.
7. Given the circumstances and the potential for the corporate debtor's revival, the Tribunal deemed it appropriate to exclude and extend the CIRP period, considering it an exceptional case warranting such action.
8. Consequently, the Tribunal granted the exclusion of the requested periods, extending the CIRP period until a specified date, and directed the Resolution Professional to file the necessary application for the resolution plan's approval within a specified timeframe.
9. The Tribunal disposed of the application with the directions provided regarding the exclusion and extension of the CIRP period, ensuring compliance with the legal requirements under the Insolvency and Bankruptcy Code, 2016.