Bengaluru Tribunal Extends CIRP Deadline by 30 Days Due to Delays with Foreign Company's Plan, Ensuring Justice and Equity.

The NCLT, Bengaluru Bench, granted the Resolution Professional's application to exclude 30 days from the statutory 270-day CIRP period under the IBC, 2016, due to communication delays with a foreign company's Resolution Plan. The Tribunal, referencing NCLAT and Supreme Court judgments, justified the exclusion based on unforeseen circumstances, ensuring the resolution process aligns with justice and equity principles. The Tribunal directed the Resolution Professional to expedite the CIRP, emphasizing the balance between timely resolution and necessary flexibility, ultimately facilitating the successful resolution of stressed assets within the IBC's legal framework.

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Issues:
- Exclusion of time period in Corporate Insolvency Resolution Process (CIRP) under IBC, 2016.

Analysis:
The judgment by the National Company Law Tribunal, Bengaluru Bench, involved the consideration of I.A. No. 92/2020 in C.P.(IB) No. 51/BB/2018, filed by the Resolution Professional seeking exclusion of 30 days from the statutory period of 270 days to conclude the CIRP of the Corporate Debtor. The Application was based on the need for justice and equity in the resolution process. The Resolution Professional highlighted that two Resolution Plans were received, one from a foreign company, causing delays due to communication challenges. The recent judgment by the Supreme Court on the timely resolution of stressed assets was cited, emphasizing the importance of completing the CIRP within the outer limit of 330 days, with provisions for extension in exceptional cases.

The Tribunal, after hearing the arguments, referred to the judgment of the NCLAT in a similar case, emphasizing the authority's power to exclude certain periods for counting the total CIRP period based on justified reasons and unforeseen circumstances. The Tribunal also referenced the Supreme Court's judgment, which empowered the Adjudicating Authority to consider exclusion of time from the statutory period prescribed under the Code, depending on the justifications presented. In this case, the Tribunal found the facts and circumstances justified the exclusion of time as requested, aligning with the interest of justice.

Consequently, the Tribunal exercised its powers under the Code and Rules to grant further exclusion of 30 days from the statutory period of 180+90 days, in addition to the previous exclusions granted. The Resolution Professional was directed to expedite the CIRP process, ensuring timely completion and submission of the necessary applications before the extended period expires. The judgment focused on balancing the need for timely resolution with the flexibility to extend time in exceptional cases, ultimately aiming to facilitate the successful resolution of stressed assets within the legal framework provided by the IBC, 2016.

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