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2021 (5) TMI 713 - Tri - Insolvency and BankruptcySeeking to consider the decision taken by the CoC of the Corporate Debtor for exclusion of the Corporate Insolvency Resolution Process by a period of 60 days under the proviso of Section 12(3) with effect from 20.02.2021 - HELD THAT - Although non-cooperation of the Corporate Debtor cannot be construed as exceptional circumstances so as to seek exclusion/extension of time, we are mindful of the fact that with the police help, as ordered by this Tribunal, the CIRP has made considerable headway and is likely to reach a logical conclusion, in a few weeks' time, as informed by the learned Counsel for the RP. The RP has been making sincere efforts in this direction. The overall time after extension would be within 330 days. If not allowed the Corporate Debtor would slip into liquidation, which would be the last and avoidable option. Hence, in exercise of the inherent powers conferred upon us by Section 60 of the Code. Exclusion of 60 days from the timeline of CIRP process period of the Corporate Debtor, which ended on 20th February, 2021, is hereby granted - Application allowed.
Issues:
- Application for exclusion of time from the Corporate Insolvency Resolution Process (CIRP) due to non-cooperation of the Corporate Debtor. - Consideration of the decision taken by the Committee of Creditors (CoC) for exclusion of the CIRP period by 60 days. - Interpretation of provisions under the Insolvency and Bankruptcy Code, 2016 regarding exclusion of time. - Balancing the need for exclusion of time against the risk of liquidation of the Corporate Debtor. - Exercise of inherent powers under Section 60 of the Code to grant exclusion of time. Issue 1: Application for Exclusion of Time from CIRP The Resolution Professional filed I.A. No. 81 of 2021 seeking exclusion of the CIRP period by 60 days under Section 12(3) of the Insolvency and Bankruptcy Code, 2016 due to non-cooperation of the Corporate Debtor. The Resolution Professional highlighted the need for exclusion to facilitate the submission of Resolution Plans by prospective Resolution Applicants, as non-cooperation had stalled the process. Issue 2: CoC Decision for Exclusion of CIRP Period The CoC, in its meeting on 16.02.2021, passed a resolution to exclude the CIRP period by 60 days from 20.02.2021 due to the non-cooperation of the Corporate Debtor. This decision was aimed at completing the CIRP process as per the provisions of the Code and providing an opportunity for Resolution Applicants to submit plans, aligning with the objectives of the IBC, 2016. Issue 3: Interpretation of Code Provisions on Exclusion of Time The Tribunal considered the legal framework and previous judgments, including the decision of the Hon'ble Supreme Court and NCLAT, regarding the exclusion of time from the statutory period prescribed under the Code. The Tribunal noted that the law allows for exclusion based on sufficient justification, even though non-cooperation alone may not constitute exceptional circumstances for seeking extension. Issue 4: Balancing Exclusion of Time Against Liquidation Risk While acknowledging that non-cooperation is not an exceptional circumstance, the Tribunal recognized the progress made in the CIRP with police intervention and the efforts of the Resolution Professional. Considering the imminent risk of liquidation if time was not extended, the Tribunal exercised its inherent powers under Section 60 of the Code to grant the exclusion of 60 days to prevent liquidation and allow the CIRP to reach a logical conclusion. Issue 5: Exercise of Inherent Powers for Exclusion of Time In the final decision, the Tribunal disposed of I.A. No. 81 of 2021 by granting the exclusion of 60 days from the CIRP process period, effective from the date of the order. The Resolution Professional was directed to expedite the CIRP process without further delay to ensure the timely resolution of the Corporate Debtor's insolvency. The case was scheduled for a report from the RP on 20.04.2021, emphasizing the importance of swift and effective resolution proceedings under the Code.
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