Corporate insolvency time exclusion and liquidation: further exclusion refused, and expiry of the resolution period led to liquidation.

Further exclusion of time from the corporate insolvency resolution process was refused because exclusion is justified only on unforeseen and recognised grounds, and the record showed an earlier exclusion had already been granted while the same period had previously been rejected. With the statutory resolution period expired and no viable resolution plan under consideration, the tribunal held that the process could not be extended beyond the outer limit and ordered liquidation of the corporate debtor, appointing the resolution professional as liquidator with consequential statutory directions.

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Issues: (i) Whether any further period could be excluded from the corporate insolvency resolution process for computing the statutory period of 270 days; (ii) whether, on expiry of the statutory period without any resolution plan under consideration, liquidation was required to be ordered.

Issue (i): Whether any further period could be excluded from the corporate insolvency resolution process for computing the statutory period of 270 days.

Analysis: The application sought exclusion of additional time from the corporate insolvency resolution process under the insolvency code and the tribunal rules. The record showed that an earlier exclusion had already been granted, that the earlier request for exclusion of the same period had been rejected, and that no resolution plan was under consideration. The tribunal applied the principle that exclusion of time is justified only in unforeseen circumstances and held that the facts did not fall within the recognised grounds for such exclusion.

Conclusion: No further period was excluded from computation of the corporate insolvency resolution process period.

Issue (ii): Whether, on expiry of the statutory period without any resolution plan under consideration, liquidation was required to be ordered.

Analysis: The tribunal held that the statutory period for completion of the corporate insolvency resolution process had expired and that the adjudicating authority could not extend the process beyond the outer limit. In the absence of any viable resolution plan and in view of the governing law on expiry of the resolution period, the tribunal proceeded to liquidation and appointed the resolution professional as liquidator, with consequential directions regarding cessation of powers, cooperation by personnel, fees, and the effect on pending proceedings.

Conclusion: Liquidation of the corporate debtor was ordered and the resolution professional was appointed as liquidator.

Final Conclusion: The request for additional exclusion failed, and the insolvency process was brought to an end by liquidation with all consequential statutory effects.

Ratio Decidendi: Exclusion of time in insolvency resolution is permissible only on justified and unforeseen grounds, and once the statutory resolution period expires without a workable resolution plan, liquidation follows as the mandatory consequence.

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