Tribunal grants 90-day extension for fund arrangement in insolvency case

The Tribunal rejected the Applicant's plea to reflect a total liability of &8377; 87,03,60,530/- for Operational Creditors, as it was not in line with the facts of the case. However, considering the exceptional circumstances due to the Covid-19 pandemic and the difficulties in fund disbursement, the Tribunal allowed the Applicant's request for a 90-day extension to arrange funds and granted time until 26 November 2020 for making payments as per the approved Resolution Plan. The Tribunal partially allowed the Application, recognizing the challenges faced by the Applicant in arranging funds amidst the Covid-19 impact.

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Issues:
1. Application for rectification of order for apportioning dues towards Operational Creditors.
2. Application for revision/modification of Resolution Plan timeline for payment.
3. Request for extension of time due to Covid-19 pandemic impact on fund disbursement.

Issue 1: Application for rectification of order for apportioning dues towards Operational Creditors

The Tribunal considered an Application by the Successful Resolution Applicant seeking rectification of the Order to reflect the amount apportioned towards the dues of Operational Creditors. The Applicant requested the Tribunal to allow a revision in the Resolution Plan timeline for payment to creditors. The Resolution Professional and counsel for the Applicant presented their arguments before the Bench. The Tribunal noted that the admitted claim of operational creditors was &8377; 54.71 Crores, and the CoC decided to provide only &8377; 50,00,000/- for payment. The Tribunal rejected the Applicant's plea to reflect a total liability of &8377; 87,03,60,530/- for Operational Creditors, as it was not in line with the facts of the case.

Issue 2: Application for revision/modification of Resolution Plan timeline for payment

The Applicant submitted that due to the Covid-19 pandemic, there were difficulties in fund disbursement by HDFC Bank, hindering the implementation of the Resolution Plan approved on 2nd July 2020. The Applicant sought a 90-day extension to arrange funds as per the Plan. The Applicant detailed the impact of the pandemic on business operations, citing restrictions on movement and banking services. The Applicant emphasized exceptional circumstances beyond their control for not honoring the payment timeline envisaged in the Resolution Plan, leading to the application for an extension.

Issue 3: Request for extension of time due to Covid-19 pandemic impact on fund disbursement

The Applicant relied on legal precedents, including orders by the Supreme Court and NCLAT, granting extensions in light of the pandemic situation. The Applicant referred to regulatory provisions exempting the lockdown period for timeline calculations in insolvency proceedings. The CoC highlighted the funds already infused by the Resolution Applicant and opposed the extension, citing the availability of funds as per HDFC Bank certification. The Respondents argued against the extension, stating that the Applicant should expedite payments as agreed in the Resolution Plan without taking advantage of the pandemic situation.

In its decision, the Tribunal acknowledged the unprecedented circumstances caused by the pandemic and the delay in fund disbursement due to the global situation. Considering the exceptional nature of the situation, the Tribunal allowed the Applicant's request for an extension, granting time until 26 November 2020 for making payments as per the approved Resolution Plan. The Tribunal partially allowed the Application, recognizing the challenges faced by the Applicant in arranging funds amidst the Covid-19 impact.

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