2021 (5) TMI 571 - Tri - Insolvency and Bankruptcy

Dismissal of Shree Sai Rolling Mills CIRP Due to Delays: Importance of Timely Compliance

The Corporate Insolvency Resolution Process (CIRP) of Shree Sai Rolling Mills (India) Pvt. Ltd. was dismissed due to significant delays exceeding the ... CIRP process - discontinuation of Interim Resolution Professional in the Corporate Insolvency Resolution Process of Shree Sai Rolling Mills (India) Pvt. Ltd. - amicable settlement between the IRP and the FC - HELD THAT:- The Corporate Resolution Process (CIRP) of Shree Sai Rolling Mills (India) Pvt. Ltd. has been set aside with effect from 20.06.2020, but it is made clear that though the CIRP is set aside, but the Application filed by the FC under Section 7 of the IBC is not dismissed/is alive. It is further made it clear that both the FC and the CD are at liberty to come before this Bench with regard to the petition filed by the FC under Section 7 of IBC after the outcome of the appeal preferred by the FC before the Hon’ble Supreme Court against the impugned order of the Hon’ble NCLAT dated 18.06.2020. The IRP, Mr. Anil Agarwal is hereby relieved, as prayed for, from his assignment with effect from 20.06.2020 the day on his receipt of the Order of the Hon’ble NCLAT and also at the request made by the CD after presenting the order dated 18/06/2020 of Hon’ble NCLAT on 20/06/2020 - It is also taken on record that the matter relating to the payment of fees and other CIRP cost have been settled amicably between the IRP and the FC. However, we do not appreciate the issue relating to the IRP fees / CIRP cost is brought before this Bench for adjudication, when the Application is filed under Section 7 of IBC and IRP is appointed only at the request of the FC and with the consent letter of the IRP. Application disposed off Issues Involved:1. Dismissal of the Corporate Insolvency Resolution Process (CIRP) of Shree Sai Rolling Mills (India) Pvt. Ltd.2. Discharge of Mr. Anil Agarwal as Interim Resolution Professional (IRP).3. Payment of CIRP costs amounting to Rs. 17,81,160/- to Mr. Anil Agarwal.4. Compliance with orders from higher courts and procedural delays.Detailed Analysis:1. Dismissal of the CIRP of Shree Sai Rolling Mills (India) Pvt. Ltd.:The Tribunal reviewed the procedural history, noting that the original petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) was filed on 21.05.2018 and admitted on 23.08.2019. Subsequent appeals and orders from the Hon’ble NCLAT and the Hon’ble Supreme Court led to delays. The Hon’ble NCLAT set aside the admission order on 18.06.2020 and remanded the matter back to the Tribunal for fresh consideration. The Tribunal observed that the CIRP had been delayed significantly, exceeding the 330-day limit established by the Hon’ble Supreme Court in the matter of COC of Essar Steel India Ltd. Vs Satish Kumar Gupta. The Tribunal emphasized the objectives of the IBC, which include timely resolution of stressed assets, and directed the Financial Creditor (FC) to take a clear stand on pursuing the applications.2. Discharge of Mr. Anil Agarwal as IRP:The Tribunal acknowledged that Mr. Anil Agarwal was appointed as IRP on 23.08.2019 and continued in his role until the Hon’ble NCLAT’s order on 18.06.2020. The IRP handed over management back to the Corporate Debtor (CD) on 20.06.2020. The Tribunal noted that the IRP had not withdrawn his consent but deemed it appropriate to release the CD from his control following the NCLAT’s order. The Tribunal formally relieved Mr. Anil Agarwal from his duties as IRP effective from 20.06.2020.3. Payment of CIRP Costs to Mr. Anil Agarwal:The IRP sought reimbursement of CIRP costs amounting to Rs. 17,81,160/- for his services. The Tribunal noted that the matter of fees and costs had been amicably settled between the IRP and the FC. The Tribunal expressed disapproval of bringing the issue of IRP fees and CIRP costs before it for adjudication, emphasizing that such matters should be resolved directly between the parties involved.4. Compliance with Orders from Higher Courts and Procedural Delays:The Tribunal highlighted the procedural delays caused by multiple appeals and writ petitions filed before various courts. It pointed out that more than 1000 days had passed since the original application was filed, far exceeding the statutory timelines for CIRP under the IBC. The Tribunal stressed the importance of adhering to the IBC’s objectives and timelines to avoid defeating the purpose of the legislation. It directed both the FC and the CD to file necessary documents and comply with orders from the Hon’ble Supreme Court.Conclusion:The Tribunal concluded that the CIRP of Shree Sai Rolling Mills (India) Pvt. Ltd. had been set aside effective from 20.06.2020, but the application filed by the FC under Section 7 of the IBC remained alive. The IRP, Mr. Anil Agarwal, was relieved from his assignment, and the matter of his fees and CIRP costs was noted to have been settled amicably. The Tribunal emphasized the need for timely resolution of insolvency cases to uphold the objectives of the IBC.