Committee of Creditors stay vacated as the insolvency process was directed to move forward within timeline

The Tribunal vacated the interim stay that had kept constitution of the Committee of Creditors in abeyance, noting that the insolvency process had remained stalled and settlement efforts had made no concrete progress despite repeated oral assurances. It held that continued protection was no longer justified and directed the resolution professional to proceed with constitution of the Committee of Creditors and to continue the Corporate Insolvency Resolution Process within the prescribed timeline.

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Issues: Whether the interim order staying constitution of the Committee of Creditors should be vacated and directions issued to proceed with constitution of the Committee of Creditors and completion of the Corporate Insolvency Resolution Process.

Analysis: The application was filed invoking the Tribunal's inherent powers under its procedural rules. The order notes that, because of the interim stay, the corporate insolvency process had remained at a standstill and there was no meaningful progress in the settlement efforts outside the Court. In view of the repeated oral assurances and the absence of concrete progress, the Tribunal found it appropriate to withdraw the interim protection that had kept constitution of the Committee of Creditors in abeyance. The Tribunal also directed the resolution professional to proceed with constitution of the Committee of Creditors and to maintain the timeline for completion of the insolvency process.

Conclusion: The interim stay on constitution of the Committee of Creditors was vacated and the resolution professional was directed to proceed with constitution of the Committee of Creditors and continue the Corporate Insolvency Resolution Process in accordance with timeline.

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