2022 (1) TMI 404 - AT - Insolvency and Bankruptcy

Seeking exclusion of 17 days time from the CIRP - HELD THAT - In view of the amendment in Section 16 sub-Section 1 of IBC, which has been enforced with effect from 28th December, 2019 now there cannot be two date for appointment of IRP. The IRP has to be appointed on the date of Insolvency Commencement Date. Appeal allowed.

Summary

Issues:
Appeal against rejection of exclusion of time from Corporate Insolvency Resolution Process (CIRP).

Analysis:
The appeal was filed against the rejection of exclusion of 17 days from the CIRP timeline by the Adjudicating Authority. The appellant argued that the appointed Interim Resolution Professional (IRP) was not proposed initially but was substituted later, leading to a delay in the IRP's appointment. The IRP was considered appointed only on 24th February, 2021, and the exclusion of time from 12th February, 2021, to 28th February, 2021 was sought. The Appellate Tribunal found substantial grounds for granting exclusion due to the delay in the IRP's appointment, stating that the Adjudicating Authority erred in rejecting the application for exclusion.

The Appellate Tribunal highlighted that the IRP appointment date should coincide with the Insolvency Commencement Date as per the amended Section 16 of the Code. The amendment clarified that the Adjudicating Authority must appoint an IRP on the insolvency commencement date itself. Therefore, the inconsistency regarding the appointment date of the IRP and the order date was resolved by the amendment. Based on this amendment and the circumstances of the case, the Appellate Tribunal concluded that there was no need for further deliberation. Consequently, the appeal was allowed, setting aside the Adjudicating Authority's order and granting the exclusion of time from 12th February, 2021, to 28th February, 2021 as requested in the application.

In conclusion, the Appellate Tribunal allowed the appeal, emphasizing the importance of aligning the IRP appointment date with the Insolvency Commencement Date as per the amended provision. The exclusion of time from the CIRP process due to the delay in the IRP's appointment was justified, leading to the setting aside of the Adjudicating Authority's order and the allowance of the exclusion period as requested by the appellant.