Exclusion of bona fide revival time from CIRP timeline supports resolution efforts under insolvency law

Time spent in bona fide revival efforts and other justified intervening circumstances may be excluded from the CIRP timeline under the Insolvency and Bankruptcy Code when such exclusion advances the resolution process. The Tribunal accepted that repeated meetings, administrative developments, State Government involvement, and employees' union participation had delayed effective progress within the original period, and noted that the resolution professional raised no objection. It therefore allowed exclusion of the specified period from computation of the statutory CIRP timeframe, so that further steps towards resolution could continue without delay.

---

---

Issues: Whether the period from 22.01.2019 to 03.08.2019 could be excluded from computation of the statutory period for completion of the Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016.

Analysis: The application was supported by the ongoing efforts for revival of the corporate debtor, the involvement of the State Government and employees' union, and the absence of any effective progress within the original CIRP timeline because of repeated meetings and administrative developments. The Tribunal relied on the principle that exclusion of intervening time is permissible where justified reasons and unforeseen circumstances exist, and that the object of the insolvency regime is revival rather than liquidation. It also noted that the resolution professional had no objection to the request and that the exclusion would serve the interests of justice.

Conclusion: The requested period was ordered to be excluded from the CIRP computation, and the application was allowed to that extent.

Final Conclusion: The statutory CIRP period stood extended by exclusion of the specified 194 days, enabling further steps towards resolution and requiring the resolution professional to expedite the process without delay.

Ratio Decidendi: Time spent in bona fide revival efforts and other justified intervening circumstances may be excluded from the CIRP timeline when such exclusion is necessary to advance the insolvency resolution process.

---