Tribunal Extends CIRP Deadline to Aid Resolution Professional, Prevent Liquidation The Tribunal granted a 90-day extension from the initial 330-day period in the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and ...
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Tribunal Extends CIRP Deadline to Aid Resolution Professional, Prevent Liquidation
The Tribunal granted a 90-day extension from the initial 330-day period in the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code. This extension aimed to facilitate the Resolution Professional (RP) in completing the CIRP effectively, preventing liquidation of the Corporate Debtor. The decision was based on the delays faced by the RP in procuring assets and records, aligning with the Supreme Court's guidelines and the importance of timely resolution efforts to save distressed companies. The Tribunal's order allowed the RP to expedite necessary steps for successful conclusion of the CIRP within the extended timeline, emphasizing adherence to prescribed timelines while allowing flexibility in exceptional circumstances.
Issues: Application for exclusion of time lost during the legal process in Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (I&B Code).
Analysis: 1. The application was filed seeking to exclude 238 days from the CIRP period due to circumstances beyond the RP's control. The RP cited delays in procuring assets and records from the provisional liquidator appointed by the Delhi High Court. The matter was transferred to NCLT, and control over the Corporate Debtor was obtained in September 2019, after 8 months from the CIRP initiation. The RP argued that additional time was needed to conduct the resolution process effectively, invoking the judgment of the Supreme Court in Committee of Creditors of Essar Steel India Ltd. The COC also passed a resolution authorizing the RP to address the lost time during the CIRP process.
2. The Tribunal acknowledged the delays and the need for additional time to proceed with the CIRP in the true spirit of the Code. Referring to the guidelines set by the Supreme Court, the Tribunal granted a 90-day extension from the expiry of the initial 330-day period to facilitate the RP in completing the CIRP effectively, achieving resolution, and preventing the Corporate Debtor from facing liquidation. The decision was based on the facts of the case and the principles established by the higher court, emphasizing the importance of saving the Corporate Debtor through timely resolution efforts.
3. The Tribunal's order allowed the application and disposed of the matter by granting the requested extension to the RP. By providing additional time, the Tribunal aimed to enable the RP to expedite the necessary steps to conclude the CIRP successfully within the extended timeline. The decision aligned with the objective of the I&B Code to facilitate the resolution of distressed companies and prevent their liquidation, emphasizing the significance of adhering to the prescribed timelines while allowing flexibility in exceptional circumstances to achieve the overarching goal of corporate resolution.
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