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TMI Blog2022 (1) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... cy resolution process has to be completed within 330 days maximum, but in exceptional cases, the period can be extended by Adjudicating Authority/ Appellate Tribunal. From the materials on the record, it is clear that CIRP period along with extensions granted from time to time was to come to an end on 15th September, 2021/ 30th September, 2021 and in the Application filed by Resolution Professional, further extension was sought. There is no doubt that maximum period of 330 days has already come to an end in the month of September 2021. The Adjudicating Authority made observation that even after 730 days, there is no sight of completion of CIRP and RP and COC merely want to explore the possibility of Resolution. Adjudicating Authority lost sight that after extension given from time to time the period expired only in the month of September 2021 - Adjudicating Authority ought to have given reasonable extension of period for proceeding further with Resolution Project Wise for which 25 Expression of Interests have already been received with the Resolution Professional. Appeal allowed. - Company Appeal (AT) (Insolvency) Nos.896, 980 & 1045 of 2021 - - - Dated:- 4-1-2022 - [Just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor a Real Estate Company started several multi-storied Housing Project. The Company pursuant to grant of license by various statutory Authorities launched several Housing Projects. After admission of the Application under Section 7 on 29th August, 2019, Interim Resolution Professional was appointed, who was also approved as Resolution Professional by the Committee of Creditors (CoC). After issuance of Form-G by Resolution Professional, the CIRP proceeded for substantially longer period, but no Resolution Plan could be received by the Resolution Professional. On representation submitted by various Homebuyers Association of various projects, requesting the Resolution Professional to undertake Project Wise Resolution, the Resolution Professional included the same in Agenda, but the same could not be earlier considered favourably by the Committee of Creditors. The CoC in its 18th Meeting held on 08.09.2021 approved the Resolution, decided to consider re-run of the CIRP and explore the possibility of Project wise Resolution and put the same for e-voting. The CoC approved division of the assets of the Corporate Debtor into eight Project for the purpose of exploring possibility of parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by collecting necessary finances and after taking loans from different Banks have made payments to the Corporate Debtor for allotment of flats. It was only 8th September, 2021 that CoC agreed to explore possibility of Project Wise Resolution, hence, reasonable time ought to have been allowed by the Adjudicating Authority by extending the CIRP period. He further submits that with regard to whole Project, when CIRP proceedings were initiated, not a single Resolution Plan was received, whereas, after the decision dated 8th September, 2021, 25 applications have been received, evidencing interest in the Project wise Resolution. 10. Learned Counsel for the Appellant submits that Adjudicating Authority has not considered the ratio laid down by Hon ble Supreme Court in Committee of Creditors of Essar Steel India Ltd. vs. Satish Kumar Gupta and Ors. (2020) 8 SCC 531. The learned Counsel for the Appellant has also relied on a judgment of this Tribunal in Company Appeal (AT) (Insolvency) No. 926 of 2019 - Flat Buyers Association Winter Hills 77, Gurgaon vs. Umang Realtech Pvt. Ltd through IRP Ors. 11. The learned Counsel appearing for Resolution Professional candidly submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain date - without any exception thereto - may well be an excessive interference with a litigant's fundamental right to non-arbitrary treatment under Article 14 and an excessive, arbitrary and therefore unreasonable restriction on a litigant's fundamental right to carry on business under Article 19(1)(g) of the Constitution of India. This being the case, we would ordinarily have struck down the provision in its entirety. However, that would then throw the baby out with the bath water, inasmuch as the time taken in legal proceedings is certainly an important factor which causes delay, and which has made previous statutory experiments fail as we have seen from Madras Petrochem [Madras Petrochem Ltd. v. BIFR, (2016) 4 SCC 1 : (2016) 2 SCC (Civ) 478] . Thus, while leaving the provision otherwise intact, we strike down the word mandatorily as being manifestly arbitrary under Article 14 of the Constitution of India and as being an excessive 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for completion of the said Project to enable the members of his Intervener Association to get possession of their homes, which Application remained pending. 16. We have noted above that in the Corporate Insolvency Resolution Process, no Resolution Plan was received. The Committee of Creditors deliberated on the request of the Resolution Professional to undertake Project Wise Resolution. It is useful to quote following extract from the Minutes of the Committee of Creditors Meeting dated 8th September, 2021: The Chairperson stated that in order to achieve maximization of value , assets/ projects of the CD can be divided into various verticals/ groups/ projects based on the viability/ security interest. The Chairperson reiterated that in 13th CoC meeting held on 30th January, 2021 the RP proposed project wise resolution comprising of 7 projects/ verticals and suggested that on same line CoC members can divide assets in 7 or more groups. The subject matter was discussed, when representative of LIC suggested that HDIL towers may be considered as separate group/ verticals as they have exclusive charge on this asset. After discussion, the CoC decided to consider 8 verticals fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls on the record, it is clear that CIRP period along with extensions granted from time to time was to come to an end on 15th September, 2021/ 30th September, 2021 and in the Application filed by Resolution Professional, further extension was sought. There is no doubt that maximum period of 330 days has already come to an end in the month of September 2021. The Adjudicating Authority made observation that even after 730 days, there is no sight of completion of CIRP and RP and COC merely want to explore the possibility of Resolution. Adjudicating Authority lost sight that after extension given from time to time the period expired only in the month of September 2021. The Adjudicating Authority after noticing the Resolution of the CoC dated 8th September, 2021 observed that the said Resolution has been taken because of the pressure from the Homebuyers. The Resolution taken on 8th September, 2021 as extracted above was with regard to Project Wise Resolution, dividing entire assets into eight Projects. This Project Wise Resolution became possible only after 8th September, 2021. The Committee of Creditors, whose commercial wisdom has to be given due weight, rightly took the decision for P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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