Tribunal Upholds August 9, 2017, as Insolvency Start Date; Claims and Transactions to Be Assessed from This Date.

The Tribunal determined that the insolvency commencement date remains August 9, 2017, as per statutory definition and the SC's order. Despite arguments to consider August 9, 2018, based on the SC's directive for recommencing the CIRP, the Tribunal upheld the original date. Consequently, claims and transactions must be assessed from August 9, 2017. The application was disposed of, affirming the original insolvency commencement date.

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Issues Involved:
1. Determination of the insolvency commencement date.
2. Interpretation of the Supreme Court's order regarding the recommencement of the CIRP.
3. Impact of the insolvency commencement date on claims and transactions.

Issue-Wise Detailed Analysis:

1. Determination of the Insolvency Commencement Date:
The primary issue was whether the insolvency commencement date should be August 9, 2017, or August 9, 2018. The applicants argued that the Supreme Court's order dated August 9, 2018, should be considered the insolvency commencement date. They contended that the IRP must invite fresh claims from all creditors treating this date as the cut-off for considering the quantum of claims.

The Tribunal referred to Section 5(12) of the Insolvency and Bankruptcy Code, 2016, which defines the "insolvency commencement date" as the date of admission of an application for initiating the CIRP by the Adjudicating Authority under section 7, 9, or 10. It was noted that the Supreme Court had not changed the date of commencement of the insolvency resolution process from August 9, 2017, to August 9, 2018. The Tribunal concluded that the insolvency commencement date remains August 9, 2017, as per the statutory definition and the Supreme Court’s order.

2. Interpretation of the Supreme Court's Order Regarding the Recommencement of the CIRP:
The applicants contended that the Supreme Court's order directed the recommencement of the CIRP afresh from the stage of the appointment of the IRP, implying a new insolvency commencement date. The Tribunal examined the Supreme Court's order and noted that the Supreme Court had exercised its powers under Article 142 of the Constitution to revive the CIRP and reconstitute the CoC to include home buyers as financial creditors. However, the Supreme Court did not set aside the original admission order dated August 9, 2017, nor did it change the statutory definition of the insolvency commencement date.

The Tribunal emphasized that the Supreme Court's order was for the limited purpose of recommencing the resolution process afresh from the stage of the appointment of the IRP by the order dated August 9, 2017, and extending the statutory period of 180 days for the completion of the resolution process from August 9, 2018. Therefore, the insolvency commencement date remains August 9, 2017.

3. Impact of the Insolvency Commencement Date on Claims and Transactions:
The applicants argued that the IRP should invite fresh claims from creditors based on the Supreme Court's order, and the cut-off date for submission of claims should be August 9, 2018. They also contended that they had not been paid interest accruing on their claims for the period between August 9, 2017, and August 9, 2018.

The Tribunal noted that the IRP is not prevented from taking claims, but the claim amounts should be calculated taking August 9, 2017, as the cut-off date. The Tribunal also highlighted that the insolvency commencement date has relevance in deciding whether particular transactions are avoidable under sections 43 and 45 of the Code. If the insolvency commencement date was changed to August 9, 2018, certain transactions might not fall under these sections, potentially causing financial loss to other financial creditors and stakeholders.

The Tribunal concluded that the insolvency commencement date, i.e., the cut-off date for calculating the quantum of claim amounts for all types and classes of creditors, is August 9, 2017. The application was accordingly disposed of, affirming that the insolvency commencement date remains August 9, 2017.

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