Tribunal rejects Application for Resolution Plan extension citing delay and non-compliance

The Tribunal rejected the Application for acceptance of the Resolution Plan and direction to the Committee of Creditors (CoC) due to unsatisfactory reasons for delay and failure to meet submission timelines. The Applicant's request for an extension of the Corporate Insolvency Resolution Process (CIRP) period was denied, as the lockdown period did not justify the delay. The Tribunal emphasized adherence to statutory timelines and promptly pursuing rights, ultimately rejecting the Application for lack of merit.

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Issues:
1. Acceptance of Resolution Plan and direction to Committee of Creditors (CoC) for consideration.
2. Extension of Corporate Insolvency Resolution Period.
3. Exclusion of lockdown period and time spent in the process.
4. Rejection of Application.

Acceptance of Resolution Plan and direction to CoC for consideration:
The case involved an Application for the acceptance of a Resolution Plan submitted by the Applicant and direction to the Committee of Creditors (CoC) for consideration. The Corporate Debtor had sought initiation of Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. The Resolution Professional (RP) had invited claims and sought Expression of Interest (EOI) by specific dates. The Applicant, a Consulting Company, failed to submit EOI or Resolution Plan within the stipulated timelines. The Applicant later requested acceptance of the EOI and Resolution Plan, which was declined by the RP. The Applicant argued for an extension of the CIRP period due to the lockdown arising from the Covid-19 pandemic, but the Tribunal found the reasons provided by the Applicant for the delay unsatisfactory and declined to grant any indulgence.

Extension of Corporate Insolvency Resolution Period:
The Applicant sought an extension of the CIRP period, citing the proviso to Sub-Section 3 of Section 12 of the Code, which allows for the completion of CIRP within 330 days. Additionally, Regulation 40C of the IBBI Regulations excludes the lockdown period from the CIRP timeline. The Applicant contended that the lockdown affected its ability to submit the EOI and Resolution Plan. However, the Tribunal noted that the CIRP period had already expired before the lockdown commenced, and no valid reasons were provided for the delay in submission.

Exclusion of lockdown period and time spent in the process:
The Applicant argued for the exclusion of the lockdown period and the time spent in the process between the resolution passed and the submission of the Resolution Plan. The Tribunal emphasized the importance of adhering to the timelines set out in the Code unless extended by the Adjudicating Authority. As there was no extension granted beyond the original CIRP period, the Tribunal found the Applicant's reasons for the delay insufficient and refused to condone the delay.

Rejection of Application:
After considering the arguments presented by the Applicant and the RP, the Tribunal found the Application lacking merit and rejected it. The Tribunal emphasized the need for parties to pursue their rights promptly and not delay the resolution process. Citing established legal principles, the Tribunal concluded that the Applicant did not provide satisfactory reasons for the delay in submitting the Resolution Plan and, therefore, the Application was rejected.

In conclusion, the Tribunal rejected the Application for the acceptance of the Resolution Plan and direction to the CoC, as the reasons provided for the delay were deemed unsatisfactory, and the Applicant failed to meet the required timelines for submission.

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