2024 (6) TMI 1041 - Tri - Insolvency and Bankruptcy

Seeking to extend the period of Pre-packaged Insolvency Resolution Process(PPIRP) of Kethos Tiles Private Limited for 60 days after the last date of PPIRP - HELD THAT - It is seen from the application that the Period of 120 days mentioned in the PPIRP came to an end on 03.05.2024. There is no Resolution Plan approved by the CoC till date as per the Application. A plain reading of Section 54D of Insolvency Bankruptcy Code, 2016 reveals that a time period of 120 days from the date of commencement of PPIRP is provided in the Act. As per Section 54D(3), if no Resolution Plan is approved by CoC the RP shall file an Application for Termination of PPIRP. Contrary to the Section Resolution Professional in the present matter has filed an Application seeking extension of time - It is seen that the Counsel for the Applicant relied upon Section 12 of the IBC,2016 to be applied in the PPIRP matters. As no resolution Plan has been approved within the specific time period which is 120 days, it is constrained to order Termination of Pre-Packaged Insolvency Resolution Process of the Corporate Debtor initiated by the order dated 04.01.2024 - It is also seen that the RP appointed by this Tribunal has misled the Tribunal and has not performed the duties as mandated under the code. The present Application is Rejected, PPIRP initiated vide order dated 04.01.2024 is hereby terminated and Corporate Debtor is released from rigor of law - Petition dismissed.

Summary

Issues:
Extension of PPIRP period for Kethos Tiles Private Limited.

Analysis:
1. The application sought to extend the PPIRP period for Kethos Tiles Private Limited by 60 days after the initial 120-day period. The CoC had passed a resolution for the extension in the 3rd meeting held on 30.04.2024.

2. The Tribunal noted that the 120-day period mentioned in the PPIRP ended on 03.05.2024, with no approved Resolution Plan by the CoC. Section 54D of the IBC, 2016 provides a time limit of 120 days for completing the PPIRP, and if no plan is approved within this time, the RP should file for termination.

3. The Tribunal observed that the RP filed for an extension contrary to Section 54D(3) which mandates filing for termination if no Resolution Plan is approved. The RP relied on Section 12 of the IBC, 2016, but the Tribunal clarified that Section 54P governs PPIRP matters, not Section 12.

4. The Tribunal highlighted the RP's failure to comply with directions under Section 54K(11) and (12) regarding the selection and approval of Resolution Plans. As no plan was approved within the stipulated time, the Tribunal ordered the termination of the PPIRP initiated on 04.01.2024.

5. It was noted that the RP had misled the Tribunal and not fulfilled mandated duties. Consequently, the Tribunal directed the Registry to inform IBBI and the Indian Institute of Insolvency Professionals for necessary action.

6. The Tribunal rejected the application, terminated the PPIRP, and released the Corporate Debtor from legal obligations. The application IA/769(AHM)2024 was rejected, and C.P.(IB) & Pre-Packaged)/1(AHM)2023 was dismissed accordingly.