Tribunal excludes interim litigation period from 90-day timeline under Insolvency and Bankruptcy Code

The Tribunal granted the Resolution Professional's application, ruling that the 55-day interim period spent in litigation should be excluded from the 90-day timeline set in the previous order. The decision underscored the RP's compliance with statutory provisions, the significance of COC resolutions for extensions, and the relevance of judicial precedents in interpreting and applying the Insolvency and Bankruptcy Code, 2016.

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Issues:
1. Clarification of exclusion of interim period in insolvency resolution process.
2. Interpretation of Section 12(2) of the Insolvency and Bankruptcy Code, 2016.
3. Authority of Resolution Professional in seeking extension of Corporate Insolvency Resolution Process (CIRP) period.
4. Application of relevant judicial precedents in insolvency resolution proceedings.

Issue 1: Clarification of exclusion of interim period in insolvency resolution process

The Tribunal considered an application filed by the Resolution Professional (RP) seeking clarification regarding the exclusion of a 55-day interim period during the pendency of a matter filed by Suraksha Asset Reconstruction Pvt. Ltd. The RP requested the exclusion of this period from the 90-day timeline set in a previous order. The RP highlighted that the Committee of Creditors (COC) meeting was delayed due to the Tribunal's oral directions, and the meeting could only be conducted after the final order was passed. The RP sought a direction to clarify the time spent on the adjudication of the matter, which led to the delay in conducting the COC meeting.

Issue 2: Interpretation of Section 12(2) of the Insolvency and Bankruptcy Code, 2016

The Tribunal referred to Section 12(2) of the Insolvency and Bankruptcy Code, 2016, which allows the RP to seek an extension of the CIRP period upon passing a resolution by the COC. The Tribunal noted that the RP had followed the necessary procedures in seeking the exclusion of the 55-day period from the overall timeline. The Tribunal emphasized the importance of adhering to the statutory provisions and the need for clarity in interpreting the provisions related to the extension of the CIRP period.

Issue 3: Authority of Resolution Professional in seeking extension of CIRP period

The Tribunal examined the RP's authority to seek an extension of the CIRP period beyond the prescribed timeline. The RP clarified that they were not requesting an extension beyond the 270 days as stipulated in Section 12(2) of the Code but sought clarification to exclude the 55-day period from the previous order. The Tribunal acknowledged the RP's role in managing the insolvency resolution process and ensuring compliance with the legal requirements for seeking extensions based on the COC's decisions.

Issue 4: Application of relevant judicial precedents in insolvency resolution proceedings

The Tribunal considered the RP's reliance on a previous order of the Hon'ble NCLAT in a similar matter to support the request for exclusion of the interim period. The Tribunal noted the importance of judicial precedents in guiding decisions related to insolvency resolution proceedings and ensuring consistency in interpreting the provisions of the Code. By referencing relevant judicial decisions, the Tribunal provided a comprehensive analysis of the RP's application and the need for excluding the specific period from the CIRP timeline.

In conclusion, the Tribunal allowed the RP's application, clarifying that the 55-day period consumed in the litigation should be excluded from the 90-day timeline set in the previous order. The decision emphasized the RP's adherence to the statutory provisions, the importance of COC decisions in seeking extensions, and the relevance of judicial precedents in interpreting and applying the provisions of the Insolvency and Bankruptcy Code, 2016.

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