Exclusion of 102 Days in CIRP Timeline to Resolve CoC Disputes: Ensuring Timely Insolvency Resolution

The Adjudicating Authority allowed the exclusion of 102 days from the Corporate Insolvency Resolution Process (CIRP) timeline due to disputes over voting share among Committee of Creditors (CoC) members. The exclusion was granted under section 12(2) of the Insolvency and Bankruptcy Code, 2016, to prevent potential liquidation and ensure timely resolution of the insolvency proceedings. Failure to adhere to the revised timeline would result in commencement of liquidation proceedings, emphasizing the significance of timely resolution in insolvency cases.

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Issues:
1. Exclusion of time period in the Corporate Insolvency Resolution Process (CIRP) due to disputes regarding voting share among Committee of Creditors (CoC).

Analysis:
1. The judgment dealt with an interlocutory Application filed by the Resolution Professional seeking exclusion of 103 days from the CIRP process under section 12(2) of the Insolvency and Bankruptcy Code, 2016. The RP requested the exclusion due to disputes regarding voting share among CoC members, impacting the Resolution Plan consideration.
2. The Adjudicating Authority had admitted the application under section 7 of the IBC, 2016 and appointed an Interim Resolution Professional (IRP) who later became the Resolution Professional. CoC meetings approved Expression of Interest (EoI) and directed RP to invite Resolution Plans from prospective Resolution Applicants.
3. A CoC member filed an application challenging the admission of claims and sought revision in voting rights, affecting the voting pattern. The matter was pending before the Adjudicating Authority, leading to uncertainty in the voting share among CoC members.
4. The RP sought exclusion based on the ground that the application challenging voting rights was listed for hearing on 01.11.2019 and reserved for orders on 11.02.2020. The RP relied on a precedent regarding grounds for exclusion in CIRP timelines.
5. The Hon'ble NCLAT precedent highlighted various grounds for exclusion, including unforeseen circumstances impacting the CIRP process. The judgment applied parameter (vi) of the precedent, considering the voting share dispute as an unforeseen circumstance affecting the CIRP timeline.
6. The Adjudicating Authority found the RP's request justified, as not granting exclusion could lead to liquidation. Therefore, the exclusion of 102 days from the computation of 330 days for completing the CIRP process was allowed to ensure the interests of all stakeholders.
7. The judgment directed the RP to complete the CIRP process within the revised timeline, failing which liquidation proceedings would commence. The Application seeking exclusion of time was disposed of accordingly, emphasizing the importance of timely resolution in insolvency matters.

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