Tribunal Extends CIRP Deadline, Emphasizes Stakeholder Value

The Tribunal approved the exclusion of an additional 54 days from the Corporate Insolvency Resolution Process (CIRP) period, citing procedural delays and circumstances beyond the Resolution Professional's control. This decision, in line with the Essar Steel case guidance, aims to facilitate the completion of the CIRP and avoid liquidation. The Tribunal also supported the consideration of the new Resolution Plan submitted by M/s. Earthin Projects Ltd, emphasizing the importance of reviving the Corporate Debtor and maximizing value for stakeholders, particularly amid the economic impact of the COVID-19 pandemic.

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Issues Involved:
1. Request for exclusion of additional 54 days from the Corporate Insolvency Resolution Process (CIRP) period.
2. Approval and deliberation on the new Resolution Plan submitted by M/s. Earthin Projects Ltd.

Issue-wise Detailed Analysis:

1. Request for Exclusion of Additional 54 Days from the CIRP Period:

The Applicant, the Resolution Professional (RP), sought the exclusion of 54 days from the CIRP period which ended on 04.02.2020. The RP highlighted that a total of 69 days was lost due to various procedural delays and circumstances beyond control, out of which 15 days had already been excluded by the Adjudicating Authority. The RP argued that the remaining 54 days should also be excluded to enable the completion of the CIRP.

The RP referenced the Supreme Court judgment in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta & Ors., which allows for the extension of the CIRP period beyond 330 days if it is in the interest of all stakeholders and if the delay is not attributable to the litigants. The RP emphasized that the exclusion of the additional days would help in reviving the Corporate Debtor and maximize value for stakeholders.

2. Approval and Deliberation on the New Resolution Plan Submitted by M/s. Earthin Projects Ltd:

The RP received a new Resolution Plan from M/s. Earthin Projects Ltd, offering Rs. 345 Crores along with a Letter of Commitment for payment within six months from the date of approval of the Resolution Plan by the Adjudicating Authority. The RP communicated this to the Committee of Creditors (CoC), and members holding 74.05% voting shares approved exploring the new Resolution Plan via email.

The RP argued that considering the new Resolution Plan would be in line with the objectives of the Insolvency and Bankruptcy Code (IBC) to revive the Corporate Debtor and avoid liquidation, which would lead to unemployment and economic loss. The RP also cited the NCLT Mumbai Bench judgment in ICICI Bank Vs. Unimark Remedies, which emphasized considering Resolution Plans even if submitted after the stipulated time to uphold the spirit of the IBC.

Judgment:

The Tribunal observed that the exclusion of the additional 54 days from the CIRP period was justified due to procedural delays and circumstances beyond the control of the RP. The Tribunal referenced the Supreme Court's guidance in the Essar Steel case, which allows for such exclusions to facilitate the completion of the CIRP rather than opting for liquidation.

The Tribunal acknowledged the interest shown by the Prospective Resolution Applicant (PRA) and the approval by the CoC members. Given the economic impact of the COVID-19 pandemic and the need to avoid liquidation, the Tribunal approved the exclusion of 54 days from the CIRP period.

The Tribunal concluded that the exclusion would be in the interest of all stakeholders and would allow the completion of the CIRP, thus disposing of the application.

Conclusion:

The Tribunal approved the exclusion of an additional 54 days from the CIRP period, enabling the RP to call for CoC meetings to deliberate and vote on the new Resolution Plan submitted by M/s. Earthin Projects Ltd. This decision aligns with the objectives of the IBC to revive the Corporate Debtor and maximize value for stakeholders.

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