2022 (4) TMI 1160 - Tri - Insolvency and Bankruptcy

Extension of time for completion of corporate insolvency resolution process - Section 25(2) and Section 60(5) of Insolvency and Bankruptcy Code, 2016 read with 40C of the IBBI (Insolvency Resolution Process for corporate persons) Regulation 2016 - HELD THAT - From the bare perusal of the above said resolution, it is apparent that no concrete Resolution Plan was submitted and still the CoC was in dilemma, whether it should be approved or not, as the authorized office of the banks has to take approval from the Higher Authorities. In the application itself, it is mentioned that the CoC had a various query regarding the said Resolution Plan. Vide 08th CoC meeting held on 10th March 2022, there was discussion and voting on the Resolution Plan, but the Resolution Applicant itself suggested that in order to avoid any confusion and also to avoid any potential litigation going forward, it was requested to consider the other variant of the plan, which related to assets of the Corporate Debtor alone and no reference to any assignment. In the present matter, there is no concrete Resolution Plan and CoC is not in position to take any specific decision thereon. Further, it is also to be mentioned herein the context that already vide order dated 07th September 2021, the extension of 90 days was granted to the applicant. Apart that, the applicant has also sought exclusion of 49 days, which was also granted vide order dated 29th November 2021, but the CIRP proceedings could not be completed in that particular period despite extension exclusion of period as stated above. Moreover, the resolution was passed on 14th March 2022, whereas 330 days expired on 15th March 2022. Further, the Resolution Plan was only received few days prior to 14.03.2022, that too on behalf of single Resolution Applicant, which also serious suspicion about the conduct of the proceedings. Even, on that day, no such definitely decision could be taken by the CoC. This Tribunal is of the view that further extension of 30 days would not serve the purpose, accordingly, the request for extension of 30 days stands declined - Application dismissed.

Summary

Issues: Application for extension of time for completion of corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016.

Analysis:
1. The Resolution Professional filed an application seeking a 30-day extension for completing the corporate insolvency resolution process (CIRP) beyond the initial deadline of 15.03.2022.
2. The CIRP was initiated against the Corporate Debtor, and various extensions had already been granted previously, including a 90-day extension and exclusion of 49 days due to lockdown.
3. The Applicant sought the extension due to the critical stage of the CIRP, with a Resolution Plan from the sole Resolution Applicant pending CoC consideration.
4. The CoC faced technical issues related to third-party property assignment in the Resolution Plan, leading to delays and uncertainties in decision-making.
5. The CoC requested a 30-day extension to seek necessary approvals from Higher Authorities for voting, as the Resolution Plan lacked clarity and raised unanswered questions among members.
6. Despite the applicant's arguments and reliance on legal precedents for time extensions, the Tribunal noted the absence of a concrete Resolution Plan and CoC's indecision, leading to the dismissal of the extension request.
7. The Tribunal concluded that a further 30-day extension would not serve the intended purpose, and hence, the application was dismissed for lacking merit.
8. The dismissal of the application was made without imposing any costs on the parties involved, considering the circumstances and the lack of progress in the CIRP despite previous extensions and efforts.

This detailed analysis of the judgment highlights the key legal aspects, procedural history, and reasoning behind the Tribunal's decision to decline the extension request for the corporate insolvency resolution process.