Exclusion of Period in CIRP to Aid Resolution Process

The Tribunal allowed the exclusion of a specific period from the Corporate Insolvency Resolution Process (CIRP) under Section 12 of the Insolvency and Bankruptcy Code, 2016. The exclusion encompassed days from the admission of the petition to the order's pronouncement, totaling 41 days. This decision aimed to facilitate the resolution process, potentially saving the Corporate Debtor from liquidation and aligning with the Code's objective of promoting distressed entities' revival.

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Issues:
Exclusion of period from Corporate Insolvency Resolution Process (CIRP) under Section 12 of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Application for Exclusion of Period:
The application, IA 67 of 2020, was filed by the Resolution Professional of the Corporate Debtor seeking an exclusion of a certain period from the Corporate Insolvency Resolution Process (CIRP) under Section 12 of the Insolvency and Bankruptcy Code, 2016.

2. Background of the Case:
The Operational Creditor had initiated the CIRP, appointing an Interim Resolution Professional (IRP). Various litigations during the CIRP period led to delays in the process, including a stay on conducting Committee of Creditors (CoC) meetings. The Resolution Professional (RP) took charge after changes in the IRP, and the period for resolution was extended beyond the initial 180 days.

3. Objective of the Insolvency and Bankruptcy Code:
The judgment emphasized the objective of the Insolvency and Bankruptcy Code to maximize the value of assets, promote entrepreneurship, and balance stakeholders' interests. It highlighted the focus on revival and continuation of the corporate debtor to prevent liquidation.

4. Legal Precedents and Observations:
Citing legal precedents, the judgment referred to the discretion of the Adjudicating Authority to extend the timeline for resolution under exceptional circumstances. The Supreme Court's observations emphasized that the primary focus is on the revival of the corporate debtor to prevent liquidation.

5. Decision and Findings:
Considering the circumstances and the likelihood of a successful Resolution Plan, the Tribunal allowed the application for exclusion of a specific period from the CIRP. The exclusion included days from the admission of the petition to the pronouncement of the order, ensuring a total of 41 days were excluded.

6. Conclusion:
The judgment concluded by disposing of the instant application, allowing the exclusion of the specified period to facilitate the resolution process and potentially save the Corporate Debtor from liquidation. The decision aligned with the objective of the Insolvency and Bankruptcy Code to promote the revival of distressed entities.

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