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2022 (9) TMI 278 - AT - Insolvency and BankruptcySeeking extension of CIRP period by another 60 days beyond the period of 370 days - applicant through the COC has failed to consider the Resolution Plan pending for consideration within the extended period of 40 days and also could not provide the cogent reasons for not complying with the direction - HELD THAT - The judgment passed by Hon ble supreme Court in the matter of Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta and Ors. 2019 (11) TMI 731 - SUPREME COURT has held that the third proviso added to the Section also mandates that where the period of 330 days is over on the date of commencement of the Amending Act of 2019, a further grace period of 90 days from such date is given, within which such process shall either be completed or the corporate debtor be sent into liquidation. The period of 60 days from today be excluded in the CIRP period and the CoC is directed to consider the Resolution Plan - Further, period spent from 19.02.2021 (date of filing of Application bearing I.A. No. 1005 of 2021) to 31.05.2021 (Impugned Order) is also excluded - Further, period spent from 14.06.2021 date of filing of instant Appeal i.e. Company Appeal (AT) (Ins.) No. 439 of 2021 till the date of Judgment i.e. 06th September, 2022 is also excluded. Appeal allowed.
Issues:
Adjudication of extension of CIRP period under IBC based on legal proceedings and Resolution Plan consideration. Detailed Analysis: 1. Adjudication of CIRP Extension: The Appellant, a Resolution Professional, appealed against the Adjudicating Authority's order dismissing the Application for extension of the Corporate Insolvency Resolution Process (CIRP) period. The Adjudicating Authority cited the failure of the Committee of Creditors (COC) to consider the pending Resolution Plan within the extended period as a reason for denial. The Appellant argued that time spent in legal proceedings should be excluded from the CIRP period calculation, emphasizing the impact of unresolved disputes on security interest and distribution under the Insolvency and Bankruptcy Code, 2016 (IBC). 2. Resolution Plan Consideration: The sequence of events leading to the appeal involved multiple meetings of the COC, appointments of Resolution Professionals, and submission of Resolution Plans. The COC requested extensions of the CIRP period to consider Resolution Plans due to pending issues, including the classification of the claim of Indian Overseas Bank as secured or unsecured. The Respondent supported the exclusion of time spent in litigations from the CIRP period, aligning with the Appellant's argument. 3. Legal Precedent: The Appellant referenced the judgment of the Supreme Court in "Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta," highlighting the necessity to exclude the time taken in legal proceedings from the CIRP timeline. The Appellate Tribunal, considering the legal precedent and arguments presented, set aside the Adjudicating Authority's order and directed the exclusion of specific periods from the CIRP period to facilitate the consideration of the Resolution Plan by the COC. 4. Final Judgment: The Appellate Tribunal allowed the appeal, directing the exclusion of certain periods from the CIRP timeline to enable the COC to evaluate the Resolution Plan effectively. The judgment emphasized the importance of adhering to legal timelines while considering the impact of unresolved disputes on the insolvency resolution process. The Tribunal's decision aimed to ensure a fair and comprehensive resolution process for all stakeholders involved. By considering the legal arguments, procedural aspects, and the impact of unresolved disputes on the insolvency resolution process, the Appellate Tribunal provided a detailed analysis leading to the final judgment in favor of the Appellant.
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