2019 (6) TMI 1557 - Tri - Insolvency and Bankruptcy

Tribunal excludes 148-day stay period, directs continuation of CIRP for Sriramagiri Spinning Mills.

Oriental Bank of Commerce Versus Sri Ramagiri Spinning Mills Ltd.

The Tribunal granted the Resolution Professional's application to exclude the 148-day stay period during the Corporate Insolvency Resolution Process ... Exclusion of period of stay of Hon'ble High Court of Telangana - Section 18 and 60 (5) (c) of Insolvency & Bankruptcy Code, 2016 - HELD THAT:- Hon'ble High Court of Telangana passed interim stay of all further proceedings including appointment of IRP by order dated 06.12.2018. It is the case of IRP, had there been no stay, CIRP of 180 days will come to end on 02.06.2019. The contention of IRP that he has to commence CIRP afresh after exclusion of the period during which stay was in force from the CIRP period of 180 days. It is the case of IRP, Hon'ble High of Telangana disposed of CRP No.7229 & 7230 on 01.05.2019. Therefore, stay is deemed to have been vacated by order of dismissal of CRP No. 7229 & 7230 of 2018. Hon'ble NCLAT held in the matter of QUINN LOGISTICS INDIA PVT. LTD. VERSUS MACK SOFT TECH PVT. LTD., MOHD. SABIR PARVEZ AND MR. M.L. JAIN, (RESOLUTION PROFESSIONAL) [2018 (6) TMI 904 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] held that in certain cases some period to be excluded from CIRP - One of the grounds mentioned for exclusion is that when CIRP is stayed by a court of law, Adjudicating Authority or Appellate Tribunal or Hon'ble Supreme Court. Relying on the decision of Hon'ble NCLAT, the period during which stay was in force i.e from 06.12.2018 to 01.05.2019 i.e. till the date of order is to be excluded from the CIRP and IRP is directed to commence the CIRP against Corporate Debtor as per provisions of IBC and Regulations thereon. The period of 148 days is to be excluded for the purpose of computation of 180 days. This period of 148 days is to be added to the CIRP wef 11.06.2019. The Application is allowed excluding the period of stay i.e, 148 days for the purpose of computation of 180 days of CIRP and IRP is further directed to proceed according to the provisions of the Code and Regulations thereon with effect from 11.06.2019 - Application disposed off. Issues:- Application for directions to exclude the period of stay of Hon'ble High Court of Telangana during the Corporate Insolvency Resolution Process (CIRP).Analysis:1. Admission of Petition and Appointment of IRP: The Tribunal considered the Application filed by the Resolution Professional regarding Sriramagiri Spinning Mills Limited under Sections 18 and 60 (5) (c) of the Insolvency & Bankruptcy Code, 2016. The petition was admitted under Section 7 of the IBC by Oriental Bank of Commerce, and an Interim Resolution Professional was appointed.2. Impact of Stay Order: Following the admission of the petition, a public announcement was made inviting claims. However, the Hon'ble High Court of Telangana granted an interim stay on the Corporate Insolvency Resolution Process (CIRP), leading to a standstill in the proceedings. The stay was eventually vacated by the High Court, allowing the CIRP to proceed.3. Request for Exclusion of Stay Period: The Resolution Professional sought exclusion of the 178-day stay period from the CIRP under Section 12 (1) of the IBC, 2016. Additionally, directions were requested for setting new cut-off dates for claim submissions, constituting the Committee of Creditors, and conducting the 1st CoC meeting.4. Judicial Precedent and Decision: The Tribunal relied on the decision of the Hon'ble NCLAT regarding the exclusion of certain periods from the CIRP, especially when stayed by a court of law. The period of stay from 06.12.2018 to 01.05.2019 was excluded from the computation of the 180-day CIRP period, with the IRP directed to proceed with the process from 11.06.2019 onwards.5. Final Decision: The Tribunal allowed the Application, excluding the 148-day stay period for the purpose of calculating the 180-day CIRP duration. The IRP was instructed to continue the process in accordance with the provisions of the Insolvency & Bankruptcy Code and related Regulations from 11.06.2019.6. Conclusion: The Application was disposed of, granting the requested exclusion of the stay period and providing clear directions for the IRP to move forward with the Corporate Insolvency Resolution Process effectively.