2021 (2) TMI 1192 - Tri - Insolvency and Bankruptcy

Tribunal rules on exclusion of time periods and initiation delay in corporate insolvency resolution process

The Tribunal rejected the exclusion of the 322-day period between the order of admission and the IRP's actual knowledge of appointment, citing public ... Seeking extension of time period of 322 days between the date of order of admission dated 30.01.2020 till the actual date (i.e. 16.12.2020) on which the present IRP came to know about the appointment and to declare 16.12.2020 as the date of commencement of CIRP - HELD THAT:- As evident from the various reports, since the order dated 30.01.2020 was uploaded on the website of this Tribunal on the very next day of the pronouncement i.e., on 31.01.2020, it is deemed to have been communicated to all the parties. Therefore, the plea that the parties had no knowledge about the order dated 30.01.2020 does not merit any consideration. Further, the IP, who admittedly pursuant to the Rule 9 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016, had given his consent dated 17.12.2020 in the Form-2 to act as Interim Resolution Professional (IRP) in the present matter was obligated to keep a track of the status of the case, for which he had given the express consent. In view of the amendment by Section 12 of IBC 2016, by which the CIRP shall mandatorily be completed within a period of 330 days including any extension of the period of CIRP granted and the time taken in legal proceedings, there are no merit in the prayers for exclusion of the period of 322 days from CIRP and declaration of 16.12.2020 as the date of commencement of CIRP. In the interest of taking the CIR process forward, what could utmost be done in terms of the Regulation 40C of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2020 is to exclude the period of Lockdown imposed by Central Government in the wake of Covid-19 and accordingly, the exclusion of the period from 25.03.2020 to 30.06.2020 i.e., a total period of 97 days from the period of CIRP is ordered with a direction to the IRP to expedite the CIR process. Application disposed off. Issues Involved:1. Exclusion of the time period between the date of order of admission and the date of actual knowledge of appointment by the IRP.2. Declaration of a new commencement date for the Corporate Insolvency Resolution Process (CIRP).3. Conduct of the Interim Resolution Professional (IRP) and subsequent actions.Detailed Analysis:1. Exclusion of the Time Period:The Applicant, Mr. Kumud Shekhar, Interim Resolution Professional (IRP) of the Corporate Debtor, sought exclusion of the 322-day period between the order of admission (30.01.2020) and the date he became aware of his appointment (16.12.2020). The Applicant contended that he did not receive any intimation regarding his appointment either from the Financial Creditor or the Registry, preventing him from taking necessary actions under the CIRP. The Applicant referenced the judgment in Quinn Logistics India Pvt. Ltd., which allows exclusion of certain periods under unforeseen circumstances. However, the Tribunal noted that the order was uploaded on the NCLT website on 31.01.2020, making it publicly accessible, and thus deemed communicated to all parties. The Tribunal did not find merit in the Applicant's plea for exclusion of the 322-day period.2. Declaration of a New Commencement Date:The Applicant requested that 16.12.2020 be declared as the new commencement date for the CIRP. The Tribunal, however, emphasized the amended Section 12 of the Insolvency and Bankruptcy Code (IBC) 2016, which mandates that the CIRP must be completed within 330 days, including any extensions and time spent in legal proceedings. Given this statutory requirement, the Tribunal rejected the request to declare a new commencement date for the CIRP.3. Conduct of the IRP and Subsequent Actions:The Tribunal expressed concern over the IRP's failure to initiate the CIRP until 16.12.2020, despite the order being in the public domain since 31.01.2020. The Tribunal highlighted the responsibility of the IRP to keep track of the case status, especially after giving express consent to act as IRP. The Tribunal also criticized the Financial Creditor and its Counsel for not keeping abreast of the order's pronouncement and communication. Consequently, the Tribunal referred the matter to the Insolvency and Bankruptcy Board of India (IBBI) for necessary action against the IRP.Conclusion:The Tribunal did not find merit in the prayers for exclusion of the 322-day period and the declaration of a new commencement date for the CIRP. However, it allowed the exclusion of the lockdown period (25.03.2020 to 30.06.2020) from the CIRP timeline, directing the IRP to expedite the process. The conduct of the IRP was referred to the IBBI for further action. The IA-5641/ND/2020 was accordingly disposed of.