Tribunal Extends Moratorium to Facilitate Resolution Plan Submission

The Tribunal extended the moratorium period by 36 days until 20 June 2018 to facilitate a viable resolution plan despite the late receipt of an order. The RP was directed to submit a resolution plan within the extended timeframe. In a separate matter, the Tribunal instructed the RP to provide an objective report explaining the rejection of an application to classify a creditor as a financial creditor. Additionally, the RP was directed to furnish necessary information, including the list of COC members and meeting minutes, for a well-informed decision. The Resolution Plan report was to include information on payments made by the CD to the creditor.

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Issues:
1. Extension of moratorium period
2. Classification of creditor as financial or operational
3. Lack of information provided by RP

Extension of Moratorium Period:
The Resolution Professional (RP) sought an extension for the moratorium period due to late receipt of an order. The RP submitted a proposal from the Committee of Creditors (COC) to exclude 36 days. The Tribunal noted that it is the duty of the petitioner to keep the Insolvency Resolution Professional (IRP) informed about the proceedings. Despite this, the Tribunal decided to extend the period of Corporate Insolvency Resolution Process (CIRP) by 36 days until 20 June 2018 in the interest of the corporate debtor to facilitate a viable resolution plan. The RP was instructed to take urgent steps to submit a resolution plan within the extended timeframe.

Classification of Creditor as Financial or Operational:
In another matter, an application was filed seeking to classify the creditor as a financial creditor instead of an operational creditor. The applicant stated that the RP had rejected the request. However, various applications in the petition indicated inconsistency in the classification of the creditor. The Tribunal directed the RP to provide an objective report explaining why the application to classify the creditor as a financial creditor was rejected, and to issue necessary orders based on the report.

Lack of Information Provided by RP:
It was observed that the RP had not enclosed a list of members of the COC and the minutes of the meeting where the extension of CIRP was discussed. The Tribunal directed the RP to furnish the necessary information to enable a well-informed decision. Additionally, the application highlighted that accepting the creditor as a financial creditor resulted in certain payments being made by the Corporate Debtor (CD). The Tribunal ordered that this information should be included in the Resolution Plan report to be submitted before 04 June 2018, with a hearing scheduled for the same date.

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