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TMI Blog2019 (11) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... tead an attempt be made to salvage the situation by finding out some viable arrangement which would subserve the interests of all concerned. We are of the considered opinion that we need to and must exercise our plenary powers to make an attempt to revive the corporate debtor (AIL), lest it is exposed to liquidation process under Chapter III of Part II of the I B Code - the IRP is directed to complete the CIRP within 90 days from today. In the first 45 days, it will be open to the IRP to invite revised resolution plan only from Suraksha Realty and NBCC respectively, who were the final bidders and had submitted resolution plan on the earlier occasion and place the revised plan(s) before the CoC, if so required, after negotiations and submit report to the adjudicating authority NCLT within such time. In the second phase of 45 days commencing from 21st December, 2019, margin is provided for removing any difficulty and to pass appropriate orders thereon by the Adjudicating Authority. Appeal disposed off. - CIVIL APPEAL NO….. OF 2019 (D. NO.27229/2019), CIVIL APPEAL NO. 6486 of 2019 - - - Dated:- 6-11-2019 - Justice A. M. Khanwilkar And Justice Dinesh Maheshwari, JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promoters shall be ineligible to participate in the CIRP by virtue of the provisions of Section 29A; (v) RBI is allowed, in terms of its application to this Court to direct the banks to initiate corporate insolvency resolution proceedings against JAL under the IBC; (vi) The amount of ₹ 750 crores which has been deposited in this Court by JAL/JIL shall together with the interest accrued thereon be transferred to the NCLT and continue to remain invested and shall abide by such directions as may be issued by the NCLT. 4. Consequent thereto, the matter proceeded before the NCLT being the adjudicating authority. The Interim Resolution Professional ( IRP for short) had issued public notice inviting claims from all JIL s stakeholders including the home buyers. IRP submitted his report on formation of Committee of Creditors ( CoC for short) before the adjudicating authority on the following basis : 37.3% in case of Financial Institutions. 62.3% home buyers and 0.4% Fixed Deposit holders 5. One of the home buyers Association filed application before the NCLT seeking clarification as to the manner in which the voting percentage of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pired on 6th May, 2019 or the period from 17th September, 2018 to 4th June, 2019 during which the matter remained pending for consideration before the Adjudicating Authority relating to voting share of the Allottees should be excluded for the purpose of counting 270 days in the light of the decision Quinn Logistics India Pvt. Ltd. vs. Mack Soft Tech Pvt. Ltd. Ors. Company Appeal (AT) (Insolvency) No.185 of 2018 wherein this Appellate Tribunal observed: 9. From the decisions aforesaid, it is clear that if an application is filed by the Resolution Professional or the Committee of Creditors or any aggrieved person for justified reasons, it is always open to the Adjudicating Authority/Appellate Tribunal to exclude certain period for the purpose of counting the total period of 270 days, if the facts and circumstances justify exclusion, in unforeseen circumstances. 10. For example, for following good grounds and unforeseen circumstances, the intervening period can be excluded for counting of the total period of 270 days of resolution process: (i) If the corporate insolvency resolution process is stayed by a court of law or the Adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into consideration different situations including extra ordinary situation, this Appellate Tribunal held that certain period can be excluded while counting the total period of 270 days. The aforesaid principle has also been followed by the Hon ble Supreme Court in the case of Arcelormittal India Private Limited vs. Satish Kumar Gupta Ors. (2019) 2 SCC 1 as also in the case of Chitra Sharma (Supra). 22. In view of aforesaid extra ordinary situation, we are of the view that the period from 17th September, 2018 i.e. the date of application filed by the Association of the allottees for clarification for the order and till the final decision i.e. 4th June, 2019 i.e. the date the matter was finally decided by the Third Hon ble Member (Total 260 days), can be excluded for the purpose of counting the 270 days. However, as the matter is pending since long, we are not inclined to exclude the total period of 260 days and instead in the interest of the Allottees, we exclude 90 days for the purpose of counting the period of 270 days of Corporate Insolvency Resolution Process , which should be counted from the date of receipt of the copy of this order. 23. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days from the statutory period of the CIRP, much less for the reasons stated in the impugned judgment. The second question is as to whether despite rejection of resolution plans of Suraksha Realty and NBCC by the CoC on 5th May, 2019 and 10th June, 2019 respectively, could the NCLAT, after excluding 90 days period from the total CIRP period, again start the CIRP afresh by allowing the two bidders to submit their revised resolution plans and/or invite fresh resolution plan from eligible persons and to call upon the CoC to reconsider the same, if so required, after negotiations. The home buyers Association, in its appeal have also questioned the power of NCLAT to disregard the mandatory provisions of I B Code and to issue directions for inviting fresh resolution plans after expiry of the statutory period for completion of the CIRP. 9. The limited issue that needs to be examined in these appeals is about the power of the NCLT or NCLAT, as the case may be, to exclude any period from the statutory period in exercise of inherent powers sans any express provision in the I B Code in that regard. Further, is it open to allow the bidder whose resolution plan has already been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 12. We are conscious of the fact that a section of the home buyers have come up in appeal against the impugned judgment as they entertain bona fide apprehension that the entire process would get delayed further due to inviting fresh offers from eligible persons. However, we must immediately note that we are not in favour of inviting fresh resolution plans from other eligible persons, as noted by the NCLAT, for being considered by the CoC afresh. We shall elaborate on this a little later. 13. We also take note of the suggestion given by the home buyers Association, appellants before this Court, that the entire process be kept outside the I B Code dispensation and to be monitored directly by this Court. The temptation of accepting the said submission, however, is fraught with being in conflict with the opinion expressed by the three Judge Bench of this Court in Chitra Sharma (surpa). In paragraph 39 of the said decision, the Court observed, thus : 39. Learned counsel for the IRP submitted that in the CoC which will be reconstituted under the amended IBC, the home buyers would have a substantial voting power so as to be able to effectively protect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ode than to say that the mechanism provided by I B Code be modulated in some respect whilst ensuring that such modulation does not do any violence to the legislative intent and at the same time, subserve the cause of justice and provide a window to find out a viable solution to all the stakeholders. 15. We are also conscious of the fact that the recent amendment to the I B Code has come into effect, thereby amending Section 12 to freeze or peg the maximum period of CIRP to 330 days from the insolvency commencement date which in this case must be taken as 9th August, 2018 in light of the direction given in Chitra Sharma (supra). It is, however, noticed from several amendments made to the I B Code from time to time that the Legislature has also continually worked upon introducing changes to the I B Code so as to address the problems faced in implementation of the new legislation introduced as recently as in 2016. The case on hand is a classic example of how the entire process has got embroiled in litigation initially before this Court and now before the NCLT and NCLAT respectively, because of confusion or lack of clarity in respect of foundational processes to be fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Section 12A enables the adjudicating authority to allow the withdrawal of an application filed under Section 7 or Section 9 or Section 10, on an application made by the applicant with the approval of 90% voting share of the CoC. Similarly, subclause (7) of Regulation 36B inserted with effect from 4th July, 2018, dealing with the request for resolution plans unambiguously postulates that the Resolution Professional may, with the approval of the Committee, reissue request for resolution plans, if the resolution plans received in response to earlier request are not satisfactory, subject to the condition that the request is made to all prospective resolution applicants in the final list. In the present case, finally only two bidders had participated and submitted their resolution plan which was placed before the CoC and stated to have been rejected. However, applying the principle underlying Regulation 36B(7), we deem it appropriate to permit the IRP to reissue request for resolution plans to the two bidders (Suraksha Realty and NBCC) and/or to call upon them to submit revised resolution plan(s), which can be then placed before the CoC for its due consideration. 17. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial and complete justice to the parties and in the interest of all the stakeholders of JIL: i) We direct the IRP to complete the CIRP within 90 days from today. In the first 45 days, it will be open to the IRP to invite revised resolution plan only from Suraksha Realty and NBCC respectively, who were the final bidders and had submitted resolution plan on the earlier occasion and place the revised plan(s) before the CoC, if so required, after negotiations and submit report to the adjudicating authority NCLT within such time. In the second phase of 45 days commencing from 21st December, 2019, margin is provided for removing any difficulty and to pass appropriate orders thereon by the Adjudicating Authority. ii) The pendency of any other application before the NCLT or NCLAT, as the case may be, including any interim direction given therein shall be no impediment for the IRP to receive and process the revised resolution plan from the abovenamed two bidders and take it to its logical end as per the provisions of the I B Code within the extended timeline prescribed in terms of this order. iii) We direct that the IRP shall not entertain any expression of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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