Court Affirms NCLT Cannot Extend CIRP Beyond Section 12 IBC 2016 Deadline; Dismisses Appeal as Meritless.

The court upheld the decision of the learned Single Judge, affirming that the NCLT lacks jurisdiction to extend the Corporate Insolvency Resolution Process (CIRP) beyond the statutory period outlined in Section 12 of the IBC 2016. The NCLT's order granting a 30-day extension was deemed contrary to the mandatory provisions of the Code. The court dismissed the writ appeal, finding it without merit, and maintained the judgment that invalidated the NCLT's extension order, emphasizing adherence to the statutory timeline for CIRP completion.

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Issues Involved:
1. Jurisdiction of NCLT to extend the Corporate Insolvency Resolution Process (CIRP) beyond the statutory period.
2. Interpretation of Section 12 of the Insolvency and Bankruptcy Code (IBC) 2016.
3. Locus standi of the Resolution Professional to file the appeal.

Summary:

1. Jurisdiction of NCLT to Extend CIRP:
The core issue was whether the NCLT had the jurisdiction to extend the CIRP beyond the statutory period prescribed under Section 12 of the IBC 2016. The learned Single Judge held that the provisions of Section 33 of the IBC 2016 were mandatory, and the NCLT had no jurisdiction to extend the limitation for completion of the CIRP beyond the statutory period.

2. Interpretation of Section 12 of IBC 2016:
Section 12 of the IBC 2016 mandates that the CIRP must be completed within 180 days from the date of admission of the application, with a possible extension of up to 90 days, not exceeding a total of 330 days. The appellant argued that the word "mandatorily" in the second proviso to Section 12(3) was struck down by the Supreme Court in the case of Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta & Ors. The appellant contended that this allowed the NCLT to grant extensions beyond 330 days under Section 60(5) of the IBC 2016 read with Rule 11 of the NCLT Rules 2016. However, the court found that the NCLT's order extending the CIRP by 30 days did not reflect that the extension was granted because the CIRP was nearing completion and would result in a positive outcome for the Corporate Debtor.

3. Locus Standi of the Resolution Professional:
The respondent challenged the locus standi of the Resolution Professional to file the appeal, arguing that the Resolution Professional should act as an independent facilitator and not in a partisan manner. The court decided to address the merits of the appeal rather than dismissing it on the ground of locus standi, noting that the Resolution Professional was impleaded as a party respondent in the writ petition.

Conclusion:
The court affirmed the view of the learned Single Judge that Section 60(5) of the IBC 2016 does not override the provisions of Section 12 of the Code. The order dated 25.08.2022 by the NCLT, Guwahati Bench, granting a 30-day extension, was found to be in gross ignorance of the mandate of the first proviso to Section 12(3) of the IBC 2016. Consequently, the writ appeal was dismissed as devoid of merit, upholding the judgment dated 22.12.2022 by the learned Single Judge, which set aside the NCLT's extension order.

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