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TMI Blog2020 (1) TMI 1207X X X X Extracts X X X X X X X X Extracts X X X X ..... wal of the Resolution Plan by the Resolution Applicant was not dealt with on merit and that no decision has either been passed or attained finality as regards allowing the party to withdraw the Resolution Plan. The question of applying res judicata therefore cannot arise in the present application seeking withdrawal of the resolution plan. It is relevant to note here that the Corporate Insolvency Resolution Process against the Corporate Debtor was initiated vide order dated 30.05.2017 passed in IB-101 (PB)/2017a Under third proviso to sub-section (3) of Section 12 of the Code the corporate insolvency resolution process period has expired on 16.11.2019 - Ordinarily the Corporate Insolvency Resolution Process period must be completed within the outer time limit provided under the Code. However, in exceptional cases in order to achieve a resolution and to avoid to drive the corporate debtor into liquidation, Adjudicating Authority (NCLT) can extend the outer time limit provided under the Code. In the facts the Corporate Insolvency Resolution Process period in the present case is further extended by 90 days from 16.11.2019. The Resolution Professional and the members of Commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) Apprehensions of the Resolution Applicant as to erosion of the commercial viability of the Resolution Plan; (c) Apprehensions as to severe mismanagement of funds, fraud and misconduct of the affairs of the corporate debtor during the period of 2014-2018; (d) Investigations against the company by the Special Frauds Investigation Office and other governmental agencies; and (e) On account of specific contractual stipulations forming the basis of the Resolution Plan, that the said plan would be valid for a mere period of six (6) months from the date of its filing, leading to invalidity of the same by way of lapse of time. 5. The Committee of Creditors has filed Reply on 21.10.2019 raising objection that the withdrawal of a duly approved resolution plan will create uncertainty in the Corporate Insolvency Resolution Process and may not be permitted at this advanced stage. It is contended that the terms of the Resolution Plan are now binding on the Resolution Applicant and withdrawal of the Resolution Plan at this stage is not supported by the Code or by the various dicta governing operability of the provisions thereof. 6. One of the main objections raised by the COC in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aded, has not been considered by a court/ tribunal and expressly dealt with in the order so passed. 13. Even a bare perusal of the Order dated 10.07.2019 would indicate that the issue of withdrawal of the Resolution Plan by the Resolution Applicant was not dealt with on merit and that no decision has either been passed or attained finality as regards allowing the party to withdraw the Resolution Plan. 14. It is also pertinent to note here that the Resolution Applicant had subsequently taken up the prayer for withdrawal of the Resolution Plan in the Application beating CA No.1310 (PB)/2019. While dealing with the said Application, liberty was given to the Applicant vide order dated 01.09.2019 to re-file an application for withdrawal of the Resolution Plan. This direction further confirms that there was no conscious adjudication in CA No. 1252(PB)/2019 on the issue of withdrawal of the resolution plan by the Applicant. 15. The question. of applying res judicata therefore cannot arise in the present application seeking withdrawal of the resolution plan. 16 The COC in its Reply has additionally averred that withdrawal of a duly approved resolution plan will create uncertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he resolution plan filed by the Resolution Applicant is to be decided before passing order under Section 31 of the Code. 22. Accordingly, the present application for withdrawal of the resolution plan filed by the Resolution Applicant is to be decided first before passing any order under Section 31 of the Code. 23. Section 30 (2) (d) of the Code mandates the Adjudicating Authority to ensure that there are effective means of enforcement and implementation of the Resolution Plan. Similarly, the proviso to sub-section (1) of Section 31 of the Code mandates Adjudicating Authority to ensure effective implementation of the resolution plan. The object in approval of the resolution plan is to save the corporate debtor and to put it back on its feet. An unwilling and reluctant resolution applicant, who has withdrawn his resolution plan, neither can put the corporate debtor back to its feet nor the effective implementation of its resolution plan can be ensured. 24. No doubt the withdrawal of the resolution plan at this advance stage has caused great prejudice to the creditors/ stake holders and legal consequences on the withdrawal of the resolution plan shall follow as per law. The R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessive and unreasonable restriction on the litigant's right to carry on business under Article 19(1)(g) of the Constitution. The effect of this declaration is that ordinarily the time taken in relation to the corporate resolution process of the corporate debtor must be completed within the outer limit of 330 days from the insolvency commencement date, including extensions and the time taken in legal proceedings. However, on the facts of a given case, if it can be shown to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days, and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation and that the time taken in legal proceedings is largely due to factors owing to which the fault cannot be ascribed to the litigants before the Adjudicating Authority and/or Appellate Tribunal, the delay or a large part there of being attributable to the tardy process of the Adjudicating Authority and/or the Appellate Tribunal itself, it may be open in such cases for the Adjudicating Authority and/or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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