CIRP-40C

When an extension for 90 days to complete CIRP is granted by an Adjudicating Authority then such period will be counted from the date on which the Adjudicating Authority/Tribunal passed the order for such extension – Kiran Martin Gulla RP of Varadharaja Foods Pvt. Ltd. – NCLAT Chennai

Hon’ble NCLAT held that the meaning of the term extension is the act of stretching out or elongating the ambit of something, the additional period of time given to a person, to meet one end. However, the term exclusion is an example of leaving something or keeping out, eliminate, facing out, rule out etc. In fact, the exclusion of particular period by an Adjudicating Authority / Tribunal using its discretionary powers under Rule 11 of NCLT Rules, 2016 and relying upon the Regulation 40C of the Regulations to keep the Company a Going Concern was held to be a proper, although it was dissented by 42% of the Committee of Creditors Members as per decision in India Bulls Housing Finance Ltd. V. Sandeep Chandna (2022) ibclaw.in 53 NCLAT.

It is to be pointed out that the pendency of judicial proceedings before a Tribunal is an exceptional circumstance and the time taken in legal proceedings cannot harm a Stakeholder/Litigant. No doubt, time is the essence of the Code, 2016.

When an extension for 90 days to complete CIRP is granted by an Adjudicating Authority then such period will be counted from the date on which the Adjudicating Authority/Tribunal passed the order for such extension – Kiran Martin Gulla RP of Varadharaja Foods Pvt. Ltd. – NCLAT Chennai Read Post »

Whether CoC has the necessary power to restart the process of Insolvency Resolution by issuing Form G when it is not satisfied with the amount offered by the Resolution Applicant(s) – Mr. Jalesh Kumar Grover, RP M/s. Nexgen Laminators Pvt. Ltd. – NCLT Chandigarh Bench

The Adjudicating Authority held that as regards the applicant’s allegations that respondent No. 1-Resolution Applicant offered a higher amount in his proposal than the applicant at a belated stage by fraudulently accessing confidential information. The Adjudicating Authority held that this issue of an alleged breach of confidentiality cannot be adjudicated by this Bench as it has only a summary jurisdiction in the matter.

Whether CoC has the necessary power to restart the process of Insolvency Resolution by issuing Form G when it is not satisfied with the amount offered by the Resolution Applicant(s) – Mr. Jalesh Kumar Grover, RP M/s. Nexgen Laminators Pvt. Ltd. – NCLT Chandigarh Bench Read Post »

Whether the approval of the CoC under Section 12(2) of the Code is mandatory for seeking exclusion of time even if it is sought on grounds of lockdown/time lost during the period of any Stay/Status Quo /or for any other reason – Indiabulls Housing Finance Ltd. Vs. Sandeep Chandna, IRP of Ambience Pvt. Ltd. – NCLAT New Delhi

This is important decision of NCLAT which defines different between exclusion and extension of time period u/s 12 of IBC, clarify question on replacement of IRP/RP such as no provision under the Code which empowers one of the Members of the CoC to approach this Tribunal seeking replacement of the IRP or RP and clarify contempt proceedings.

Whether the approval of the CoC under Section 12(2) of the Code is mandatory for seeking exclusion of time even if it is sought on grounds of lockdown/time lost during the period of any Stay/Status Quo /or for any other reason – Indiabulls Housing Finance Ltd. Vs. Sandeep Chandna, IRP of Ambience Pvt. Ltd. – NCLAT New Delhi Read Post »

If CoC has approved with 66% majority as provided under Section 12(2) of the Code and has decided not to extend the time, the RP cannot take any contrary decision – CRPL Infra Pvt. Ltd. Vs. Shri Anil Agarwal, RP, Transafe Services Ltd. and Ors. – NCLAT New Delhi

NCLAT observes that in a catena of Judgements, the Hon’ble Apex Court has laid down that the provisions investing jurisdiction and authority in the NCLT has not made the commercial decision exercised by the CoC of not approving the Resolution Plan or rejecting the same, justiciable. So, in the instant case, if CoC has approved with 66% majority as provided under Section 12(2) of the Code and has decided not to extend the time to the Appellant herein on the ground that several extensions have already been given, the RP cannot take any contrary decision. Therefore the contention of the Learned Counsel for the Appellant that the RP has not given sufficient advance time for the meeting and has acted contrary to provisions of IBC, is untenable.

If CoC has approved with 66% majority as provided under Section 12(2) of the Code and has decided not to extend the time, the RP cannot take any contrary decision – CRPL Infra Pvt. Ltd. Vs. Shri Anil Agarwal, RP, Transafe Services Ltd. and Ors. – NCLAT New Delhi Read Post »

Section 19(2) of the Code application is neither for exclusion of time period nor for extension of time period – Harish Taneja The RP of Cosmopolitan Technofab Textiles Pvt. Ltd. – NCLAT New Delhi

NCLAT held that the time period provided under IBC for completion of CIRP is 180 days as per section 12. If the CIRP is not completed within this time period, an explicit extension order is to be sought from the Adjudicating Authority, which can be of maximum of 90 days. From the averments made by the Resolution Profession and the arguments submitted before us, we do not find that after the expiry of 180 days from the date of commencement of CIRP, the Resolution Professional obtained approval of the CoC to file an application for extension of CIRP. Moreover, he never filed any application for extension of CIRP and waited for a decision on his section 19(2) application. Section 19(2) application was neither for exclusion of time period nor for extension of time period. We are of the very clear opinion that since the Resolution Professional could not receive any order in action with section 19(2) application, he should have filed an application for extension of CIRP as required under section 12, after a lapse of 180 days from the commencement of CIRP, after due approval of CoC. All this is requirement under Law, which cannot be lost sight of, and the Resolution Professional has been remiss in carrying out his responsibilities as per provisions of IBC. In such a situation, we find that he is seeking extension of time period of CIRP in the garb of “exclusion of time period” which cannot be permitted.

Section 19(2) of the Code application is neither for exclusion of time period nor for extension of time period – Harish Taneja The RP of Cosmopolitan Technofab Textiles Pvt. Ltd. – NCLAT New Delhi Read Post »

Landmark Judgment – Whether Resolution Plan is the statutory or contract? | Whether a Resolution Applicant is entitled to withdraw or modify its Resolution Plan – Ebix Singapore Pvt. Ltd. Vs. Committee of Creditors of Educomp Solutions Ltd. & Anr. – Supreme Court

Landmark judgment on IBC.

Landmark Judgment – Whether Resolution Plan is the statutory or contract? | Whether a Resolution Applicant is entitled to withdraw or modify its Resolution Plan – Ebix Singapore Pvt. Ltd. Vs. Committee of Creditors of Educomp Solutions Ltd. & Anr. – Supreme Court Read Post »

Judgment on co-operation by Suspended directors/managements in conducting CIRP – Mr. Venugopal Dhoot Individual Indian Inhabitant Vs. Mr. Pravin R. Navandar RP – VOVL Ltd. – NCLAT New Delhi

The AA has directed the Promoters, Directors and the persons associated with the management of Corporate Debtor – VOVL Limited to extend full cooperation and handover all the Books of Accounts/ Bank Accounts etc., to the Resolution Professional of the Corporate Debtor. The impugned order has also stated that in case of violation of this order under Section 70 of the Code provides for punishment for misconduct in course of CIRP.
NCLAT set aside the order and held that on a specific query by the Bench, why RP for more than one year could not get the books reconstructed with the assistance of expert IT Professional from outside to ascertain avoidable transactions of the Code, if he suspects something based on inputs available with him. The bench could not get a clarity on the issue. What we find basically that a culture has come were Accounts people wants to do the job of Auditor, Auditor wants to do the job of Vigilance and Vigilance wants to do the job of CBI. The RP being a competent professional and bankers within his charge, he should have reconstructed a book showing cash flow for the specified period as per the Code and by this time could have detected that whether any preliminary finding is for avoidance transactions and then the other party could have proved either way by this time. The RP can take the assistance of concerned Registrar of Company/MCA website and could have obtained financial statements/annual return and his apprehension could have been proved either way. We cannot enter into a domain where Section 18 vide its explanation the term, assets, shall not include asset of any Indian or foreign subsidiary of the CD.

Judgment on co-operation by Suspended directors/managements in conducting CIRP – Mr. Venugopal Dhoot Individual Indian Inhabitant Vs. Mr. Pravin R. Navandar RP – VOVL Ltd. – NCLAT New Delhi Read Post »

If at belated stage when the Resolution Applicants are already before the CoC, if new claims keep popping up & are entertained, the CIRP would be jeopardized & Resolution Process may become more difficult – Harish Polymer Product Vs. Mr. George Samuel, RP of Jason Dekor Pvt. Ltd. – NCLAT New Delhi

An Operational Creditor filed belated claim and contented to allow claim on the grounds of distance, Lockdown, CIRP Regu. 40C and Order of SC on extension of limitation.
The Appellate Tribunal upheld the decision of the AA and observed that the reasons recorded by the AA have substance and if at belated stage when the Resolution Applicants are already before the CoC with their Resolution Plan(s) if new claims keep popping up and are entertained, the CIRP would be jeopardized and Resolution Process may become more difficult. Keeping in view the object of the Code which is Resolution of the Corporate Debtor in time bound manner to maximize value, if such requests of applicants like Appellant are accepted the purpose of Code would be defeated.(p10)

If at belated stage when the Resolution Applicants are already before the CoC, if new claims keep popping up & are entertained, the CIRP would be jeopardized & Resolution Process may become more difficult – Harish Polymer Product Vs. Mr. George Samuel, RP of Jason Dekor Pvt. Ltd. – NCLAT New Delhi Read Post »

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