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Insolvency and BankruptcyAugust 27, 2024Case LawsAT
The appellate tribunal held that the maximum 120-day period for completing the Pre-Package Insolvency Resolution Process (PPIRP) is not mandatory. The termination of PPIRP requires an order from the adjudicating authority, and there is no concept of automatic termination after the expiry of 120 days. The tribunal observed that all IBC processes have timelines for completion, but the adjudicating authority has discretion to extend the period in appropriate cases, even after the prescribed timeline, as held by the Supreme Court in the Essar Steel case. The adjudicating authority erred in rejecting the application for a 60-day extension of PPIRP and holding that the proceedings must be terminated after 120 days. The impugned order was set aside, and the appeal was allowed.
The appellate tribunal held that the maximum 120-day period for completing the Pre-Package Insolvency Resolution Process (PPIRP) is not mandatory. The termination of PPIRP requires an order from the adjudicating authority, and there is no concept of automatic termination after the expiry of 120 days. The tribunal observed that all IBC processes have timelines for completion, but the adjudicating authority has discretion to extend the period in appropriate cases, even after the prescribed timeline, as held by the Supreme Court in the Essar Steel case. The adjudicating authority erred in rejecting the application for a 60-day extension of PPIRP and holding that the proceedings must be terminated after 120 days. The impugned order was set aside, and the appeal was allowed.
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