Exclusion of CIRP delay during extension proceedings confirmed, with the 90-day extension running from appeal disposal, not retrospectively.

Time spent in seeking extension of the corporate insolvency resolution process and in the appeal was held to be excludable from the CIRP timeline, because the delay arose from judicial proceedings and was not attributable to the applicant. The Tribunal also found that directing the 90-day extension to operate retrospectively from the earlier date fixed by the Adjudicating Authority was erroneous. The extension was therefore to run from the date of disposal of the appeal, with the excluded period taken out of the CIRP computation.

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Issues: Whether the period spent in pursuing the application for extension of the corporate insolvency resolution process, and the pendency of the appeal, ought to be excluded while computing the CIRP period, and whether the extension of 90 days could be directed to run retrospectively from the earlier date fixed by the Adjudicating Authority.

Analysis: The application before the Adjudicating Authority sought extension of the CIRP for 90 days and also sought exclusion of the pendency period. The record showed that the sole Committee of Creditors member had approved extension, and the proceedings before the Adjudicating Authority and thereafter before the Appellate Tribunal consumed time not attributable to the applicant. The Tribunal applied the principle that delay caused by judicial proceedings should not prejudice a litigant, and held that the period spent in pursuing the extension application had to be excluded when computing the CIRP timeline. On that basis, the Tribunal found that the direction making the extension run retrospectively from 10.05.2023 was erroneous.

Conclusion: The exclusion of time spent in the extension proceedings and in the appeal was allowed, and the 90-day CIRP extension was granted from the date of disposal of the appeal, not retrospectively from 10.05.2023.

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