Extension of CIRP Period and Resolution Plan Submission: Key Details and Rulings

The Tribunal allowed the extension of the Corporate Insolvency Resolution Process (CIRP) period by 90 days from the date of the order, taking into account delays caused by the late appointment of the Resolution Professional and the nationwide lockdown. The lockdown period was excluded from the CIRP timeline following precedents from higher courts. The suspended promoter was deemed eligible to submit a Resolution Plan under the revised MSME definition, with an extension of 45 days granted for plan submission, to be considered by the Committee of Creditors (CoC) within the ongoing CIRP period.

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Issues Involved:
1. Extension of Corporate Insolvency Resolution Process (CIRP) period.
2. Exclusion of lockdown period from CIRP.
3. Eligibility of the suspended promoter to submit a Resolution Plan under the revised MSME definition.

Detailed Analysis:

1. Extension of Corporate Insolvency Resolution Process (CIRP) period:
The CIRP of the Corporate Debtor commenced on 23.09.2019, with an initial period of 180 days set to expire on 21.03.2020. Due to various delays, including the late appointment of the Resolution Professional (RP) and the nationwide lockdown, the RP sought an extension of 116 days beyond the initial 180 days. The Tribunal acknowledged the adverse impact of the pandemic on the CIRP and allowed the extension of the CIRP period by 90 days from the date of the order, which includes the extension and exclusion sought by the RP.

2. Exclusion of lockdown period from CIRP:
The RP cited the nationwide lockdown due to the Covid-19 outbreak as a significant factor in the delay of the CIRP. The Tribunal referred to the orders of the Hon'ble Supreme Court and the Hon'ble NCLAT, which extended the period of limitation and excluded the lockdown period from the CIRP timeline. Consequently, the Tribunal found it appropriate to exclude the pandemic phase from the CIRP period, thereby allowing the RP's application for exclusion of the lockdown period.

3. Eligibility of the suspended promoter to submit a Resolution Plan under the revised MSME definition:
The suspended promoter of the Corporate Debtor sought an extension of 45 days to submit a Resolution Plan, citing the changes in the categorization of MSMEs effective from 01.07.2020. The Tribunal noted that the Corporate Debtor came within the definition of Medium Enterprise from 01.07.2020, and Section 240A of the Code exempts MSMEs from certain ineligibility criteria under Section 29A. The Tribunal held that the promoter became eligible to submit a Resolution Plan from 01.07.2020, within the ongoing CIRP period. Therefore, the Tribunal allowed the promoter to submit a Resolution Plan within 30 days from the date of the order, with the CoC to consider the plan if submitted within the stipulated time.

Order:
- IA No. 973 of 2020 and IA No. 1504 of 2020 are allowed, extending the CIRP period by 90 days from the date of the order.
- IA No. 1306 of 2020 is allowed, permitting the promoter to submit a Resolution Plan within 30 days. The CoC shall consider the plan in accordance with the law. No order as to costs.

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