Tribunal denies interim relief, approves Creditors' Committee to continue CIRP, dismisses Financial Creditor's claim

The tribunal rejected the appellant's request for interim relief, allowing the Committee of Creditors to proceed with the Corporate Insolvency Resolution Process (CIRP), including considering liquidation. The appellant's claim as a Financial Creditor was dismissed, emphasizing the importance of progressing the CIRP without delays.

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Issues involved:
1. Leave to urge additional grounds.
2. Interim reliefs and stay of impugned order.
3. Status of the appellant as a Financial Creditor.
4. Consideration of liquidation by the Committee of Creditors (CoC).
5. Exclusion of certain periods from the Corporate Insolvency Resolution Process (CIRP).
6. Acceptance of Resolution Plans.

Detailed Analysis:

1. Leave to urge additional grounds:

The appellant filed I.A. No. 1789 of 2020 seeking leave to urge additional grounds in view of the impugned order. The application was allowed, and the appellant filed an amended memorandum of appeal, which was taken on record and treated as the amended memorandum of appeal.

2. Interim reliefs and stay of impugned order:

The appellant sought interim reliefs as claimed in I.A. No. 1557/2021, arguing that the impugned order should be stayed to prevent the CoC from deciding on liquidation, which would deprive the appellant of its right to participate in the CIRP. However, the tribunal found no prima facie case to justify holding up the progress of CIRP and rejected the interim relief application.

3. Status of the appellant as a Financial Creditor:

The appellant claimed to be a Financial Creditor based on an agreement clause stipulating interest payment for breach of obligations. The Resolution Professional (RP) rejected this claim, and the Adjudicating Authority upheld the RP's decision, stating that the appellant's claim was a mere right to recovery or entitlement and did not qualify as a Financial Debt under the relevant legal definitions.

4. Consideration of liquidation by the Committee of Creditors (CoC):

The appellant argued that the Adjudicating Authority had orally directed the CoC not to consider liquidation while the appellant's application was pending. However, the tribunal noted that the Adjudicating Authority had since dismissed the appellant's application and lifted the oral direction, allowing the CoC to proceed with considering liquidation.

5. Exclusion of certain periods from the Corporate Insolvency Resolution Process (CIRP):

The tribunal discussed the exclusion of certain periods from the CIRP, noting that the Adjudicating Authority had granted an extension, and the CIRP period was set to expire on 30th September 2021. There was a discrepancy regarding the exact expiry date, but the tribunal acknowledged the extension granted by the Adjudicating Authority.

6. Acceptance of Resolution Plans:

The tribunal considered the advanced stage of the CIRP and the presence of prospective Resolution Applicants. It noted that the CoC had not agreed to project-wise resolution plans and emphasized the need for the CIRP to progress without further delays. The tribunal did not grant interim orders to stay the proceedings before the CoC, allowing them to either accept or reject resolution plans or decide on liquidation as per the law.

Conclusion:

The tribunal rejected the appellant's request for interim relief and allowed the CoC to proceed with the CIRP, including considering liquidation. The appellant's status as a Financial Creditor was not accepted, and the tribunal emphasized the need for the CIRP to progress without further delays.

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