Suspended director allowed to submit Resolution Plan under Insolvency Code Section 60(5)

The Tribunal granted permission to the suspended director of the Corporate Debtor to submit a Resolution Plan within a specified timeline under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The decision was based on the director's eligibility as an MSME and the need to conclude the Corporate Insolvency Resolution Process promptly. Despite the belated submission, the Tribunal emphasized no further extensions would be granted, ensuring the timely progress of the resolution process.

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Issues:
1. Application filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 by the suspended director seeking permission to submit a Resolution Plan.
2. Eligibility of the suspended director to submit a resolution plan based on the classification of the Corporate Debtor as an MSME.
3. Consideration of the belated Resolution Plan by the Committee of Creditors (CoC) and Resolution Professional.
4. Granting permission to the applicant to submit the Resolution Plan within a specified timeline.

Issue 1: Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016
The suspended director of the Corporate Debtor filed an application seeking permission to submit a Resolution Plan under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The application requested approval to allow the suspended director to present a Resolution Plan to the Resolution Professional and members of the Committee of Creditors (CoC).

Issue 2: Eligibility of the suspended director to submit a resolution plan
The applicant, as the suspended director of the Corporate Debtor, claimed eligibility to submit a Resolution Plan based on the revised classification of the Corporate Debtor as a medium enterprise under the Ministry of Micro, Small and Medium Enterprises notification. The applicant argued that certain clauses of Section 29A of the Code would not be applicable to the Corporate Debtor, making the suspended director eligible to propose a resolution plan.

Issue 3: Consideration of the belated Resolution Plan
The Resolution Professional informed that the applicant submitted a belated Resolution Plan without prior approval from the Tribunal. The Committee of Creditors (CoC) considered the request but required explicit permission from the Tribunal to accept the late submission. Despite extensions granted, the applicant failed to comply with the timeline, leading the CoC to proceed with the examination of other resolution plans due to the impending completion date of the Corporate Insolvency Resolution Process (CIRP).

Issue 4: Granting permission to submit the Resolution Plan
After hearing arguments from both sides, the Tribunal granted permission to the applicant to submit the Resolution Plan within a week from the date of the order. The Resolution Professional was directed to present the plan to the Committee of Creditors promptly for their consideration to ensure the timely conclusion of the CIR Process. It was emphasized that no further extensions would be granted for the submission of the Resolution Plan.

In conclusion, the Tribunal disposed of the application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, allowing the suspended director to submit a Resolution Plan within a specified timeline. The decision was based on the eligibility of the suspended director as an MSME and the necessity to conclude the Corporate Insolvency Resolution Process without further delays.

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