2021 (12) TMI 189 - Tri - Insolvency and Bankruptcy

Seeking extension of the Corporate Insolvency Resolution Process (CIRP) period by 90 days beyond 31.05.2021 - seeking exclusion of period on account of lockdown and difficulties faced from 01.01.2021 till 31.05.2021 - HELD THAT - The application for extension has been filed in the month of May 2021. The explanation given seeking for exclusion of time from 01.01.2021 to 31.05.2021, is not satisfying as there was no lockdown imposed by the Government from 01.01.2021 to 15.05.2021, hence exclusion of the CIRP period from 01.01.2021 to 15.05.2021, cannot be granted. The Resolution Professional has been conducting meetings and has been performing her duties even during the period sought for exclusion. However, the object of the Code is to revive the Company and in view of the fact that a Resolution Plan is awaited, the exclusion of the time from the date the application was under consideration of this Adjudicating Authority that is from 14.05.2021 till the date of this order is granted and extension of 90 days to the CIRP period is also granted. Application dismissed.

Issues:
1. Application for extension of Corporate Insolvency Resolution Process (CIRP) period.
2. Exclusion of period due to lockdown and difficulties faced.
3. Application under section 60(5) of the Insolvency and Bankruptcy Code, 2016.
4. Intervention in the CIRP process by a suspended Board of Director.
5. Disruption of CIRP process by a shareholder and director of a related company.
6. Compliance with CIRP timelines and relevant legal provisions.

Issue 1: Application for extension of CIRP period
The Resolution Professional (RP) of a company filed an application seeking an extension of the CIRP period by 90 days beyond a specified date. The application was based on the delay in receiving satisfactory Resolution Plans and the occupation of the company's main asset by another entity. The RP highlighted that a pending petition against the occupying entity was complicating the CIRP process.

Issue 2: Exclusion of period due to lockdown and difficulties faced
The RP also requested the exclusion of a specific period due to the impact of lockdown and other challenges faced during the CIRP. The RP cited previous orders for exclusion and emphasized the need for additional time to complete the resolution process effectively.

Issue 3: Application under section 60(5) of the Insolvency and Bankruptcy Code, 2016
Another application was filed by a suspended Board of Director of the company against the RP, seeking various reliefs related to participation and intervention in the CIRP process. The applicant raised objections regarding the exclusion of time periods and the handling of the resolution proceedings.

Issue 4: Intervention in the CIRP process by a suspended Board of Director
The applicant, a suspended Board of Director, contested the RP's application for extension and exclusion of time periods. The applicant claimed lack of access to relevant documents and raised concerns about the handling of the CIRP proceedings. The applicant's involvement in related companies added complexity to the situation.

Issue 5: Disruption of CIRP process by a shareholder and director of a related company
The RP argued that the applicant's actions were disrupting the CIRP process and that the applicant lacked standing to object to the extension and exclusion requests. The RP highlighted alleged lack of cooperation from the applicant and their potential role in forcing the company into liquidation.

Issue 6: Compliance with CIRP timelines and relevant legal provisions
After considering the arguments and reviewing the records, the Tribunal found that the requested exclusion of the period from 01.01.2021 to 15.05.2021 was not justified due to the absence of a lockdown during that time. However, in the interest of reviving the company, an exclusion was granted from 14.05.2021 until the date of the order, with a 90-day extension to the CIRP period. The Tribunal emphasized strict adherence to CIRP timelines and legal precedents to ensure the effective resolution of the company's insolvency.

In conclusion, the Tribunal dismissed one application and deemed another as infructuous, directing compliance with the specified timelines and legal requirements for the CIRP process.

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