2025 (7) TMI 1715 - AT - IBC

30-Day Extension Allowed for Completing Personal Insolvency Resolution Process Under IBC Rules

Shiv Kumar Goel Versus Piyush Moona (RP) & Anr. And Uma Goel Versus Piyush Moona (RP) & Anr.

The NCLAT set aside the order rejecting the RP's application for a 30-day extension to complete the Personal Insolvency Resolution Process. Despite 61% of ... Rejection of application filed by RP to extend the time for completion of Personal Insolvency Resolution Process by 30 days - in view of the rejection of the application, voting could not be concluded and left inconclusive - HELD THAT:- The minutes of the 15th CoC meeting has been brought on the record, on 15.05.2025 the detailed discussion was noticed, Union Bank of India and State Bank of India has prayed for extension of 30 days since they could not obtain necessary approval for voting due to the new policy implemented in the bank. It was on the request of the Union Bank of India and State Bank of India that decision was taken to seek extension for 30 days and it was also noticed in the minutes that 61% of committee of creditors had already voted and only 39% of voters need to be noticed. In the facts of the case where repayment plan is to be voted and voting has been going and 61% had been voted and request was only made by SBI and Union Bank of India for 30 days in response to which the application was filed. The observations of the Adjudicating Authority that there appears to be lack of seriousness in the attitude conduct and approach of the parties concerned, not approved. The personal guarantor after having submitted repayment plan it was for the CoC to vote and take a decision thereafter. The order rejecting the application cannot be sustained, in result the order dated 23.05.2025 in IA No. 2477/2025 is set aside the extension of 30 days is allowed for completing the e-voting on the repayment plan. RP to take necessary steps for complete the voting within 30 days from today after conclusion of voting further steps shall be taken for correspondence. Appeal disposed off. 1. ISSUES: 1. Whether the Adjudicating Authority was justified in rejecting the application filed by the Resolution Professional (RP) seeking a 30-day extension for completion of the Personal Insolvency Resolution Process (PIRP) voting period under Section 112 of the Insolvency and Bankruptcy Code (IBC), 2016.2. Whether the observations of the Adjudicating Authority regarding the 'lack of seriousness in the attitude, conduct, and approach of the parties concerned' were appropriate in the context of the extension request.3. The procedural requirements and authority of the Committee of Creditors (CoC) to approve an extension of the PIRP timeline and the RP's obligation to file a report under Section 112 of the IBC. 2. RULINGS / HOLDINGS: 1. The Court set aside the Adjudicating Authority's order rejecting the extension application and allowed the 30-day extension for completing the e-voting on the repayment plan, holding that the rejection was not justified as the voting was ongoing and the extension was sought on the basis of a resolution passed by the CoC.2. The Court disapproved the Adjudicating Authority's observation of 'lack of seriousness in the attitude, conduct, and approach of the parties concerned,' stating that the personal guarantor had submitted the repayment plan and it was for the CoC to vote, thus no lack of seriousness was evident.3. The Court recognized that under Section 112 of the IBC, the RP must submit a report to the Adjudicating Authority detailing the outcome of the creditors' meeting concerning the repayment plan, regardless of approval, and that the CoC's resolution to seek extension was valid and binding for filing the extension application. 3. RATIONALE: 1. The Court applied the framework under the Insolvency and Bankruptcy Code, 2016, specifically Section 112, which mandates the RP to file a report on the resolution plan's voting outcome and contemplates extensions of the PIRP period to facilitate completion of the process.2. The Court relied on the minutes of the CoC meeting dated 15.05.2025, which showed that 61% of votes were cast and the remaining 39% required additional time due to new bank policies delaying approvals, justifying the requested extension.3. The Court emphasized the importance of procedural fairness and the CoC's authority to decide on extension requests, rejecting the Adjudicating Authority's adverse inference about the parties' conduct as unsupported by the facts.4. The decision reflects a doctrinal affirmation that extensions of insolvency timelines should be granted where justified by procedural delays and creditor interests, ensuring the resolution process is not unduly prejudiced by rigid timelines.