12 (2)

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 CIRP time limit 330 days is to be extended or not has to be seen comprehensively with the decision of the CoC whether any further time is to be granted – Triumph Commodities Pte. Ltd. Vs. Aster Pvt. Ltd. Represented by its Liquidator Mr. Naren Sheth – NCLAT Chennai

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Whether CIRP time limit 330 days is to be extended or not has to be seen comprehensively with the decision of the CoC whether any further time is to be granted – Triumph Commodities Pte. Ltd. Vs. Aster Pvt. Ltd. Represented by its Liquidator Mr. Naren Sheth – NCLAT Chennai 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 17 of the Code can be interpreted as suspension of powers of the board of directors and not their duties & responsibilities, the Board is fastened with the responsibility of running & managing the company’s affairs – Wittur Elevator Components India Pvt. Ltd. Vs. Axiomata Elevators Pvt. Ltd. – NCLT Kochi Bench

The AA held that a careful reading of Section 17 of the Code, this can be interpreted as suspension of powers of the board of directors(BOD) and not their duties and responsibilities. The Board is fastened with the responsibility of running and managing the company’s affairs. If the powers of the board are suspended and the management of the affairs of the Corporate Debtor vests with the IRP after his appointment, then the responsibility also lies with the IRP. The suspension of the powers of the BOD means suspension of the role of directors, and responsibilities emanating from such role. Section 20 mandates the IRP to preserve and protect the value of the property and to manage the operations of the corporate debtor as a going concern. But in this case, even though the RP is empowered to take possession of the Registered Office and records of the Corporate Debtor, he has taken only symbolic possession of the same and allowed the suspended Directors to enjoy for their benefits. This is against the provisions of the Code. On verification of records of this case, it is seen that only one meeting of CoC took place with the presence of Resolution Professional, and without making any endeavour for inviting Expression of Interest, the CoC unanimously resolved to liquidate the Corporate Debtor.

Section 17 of the Code can be interpreted as suspension of powers of the board of directors and not their duties & responsibilities, the Board is fastened with the responsibility of running & managing the company’s affairs – Wittur Elevator Components India Pvt. Ltd. Vs. Axiomata Elevators Pvt. Ltd. – NCLT Kochi Bench Read Post »

NCLAT extends CIRP period beyond 330 days – CoC of M/s. Vasan Health Care Pvt. Ltd. Vs. Mr. S. Rajendran RP M/s. Vasan Health Care Pvt. Ltd. – NCLAT Chennai

NCLAT held that it is unequivocal that the Appellants have shown exceptional circumstances i.e. pendency of Judicial Proceedings before the Hon’ble Courts, imposition of nationwide lockdown, change of RP, calling fresh Expression Of Interest and the nature of business of the Corporate Debtor which admittedly spread over to many parts of the Country. It is also an admitted fact that many interested prospective Resolution Applicants have submitted their plans evincing their interest in the bid process of the Corporate Debtor. This Tribunal is of the view that Corporate Debtor cannot be pushed into Liquidation.

NCLAT extends CIRP period beyond 330 days – CoC of M/s. Vasan Health Care Pvt. Ltd. Vs. Mr. S. Rajendran RP M/s. Vasan Health Care Pvt. Ltd. – NCLAT Chennai 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 »

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