TaxTMI 
TaxTMI 
2019 (11) TMI 316
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....eing CP No. (I&B) 77/ALD/2017 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short, 'the I & B Code') against JIL before the National Company Law Tribunal, Allahabad ('NCLT' for short), as the JIL had turned NPA (NonPerforming Asset). During the pendency of the said application, writ petitions were filed in this Court by the home buyers concerning the stated project of JIL, which came to be disposed of on 9th August, 2018 in the case of Chitra Sharma & Ors. vs. Union of India & Ors . 2018 (9) SCALE 490. This Court issued the following directions : " 42. We, accordingly, issue the following directions: (i) In exercise of the power vested in this Court under Article 142 of the Constitution, we direct that the initial period of 180 days for the conclusion of the CIRP in respect of JIL shall commence from the date of this order. If it becomes necessary to apply for a further extension of 90 days, we permit the NCLT to pass appropriate orders in accordance with the provisions of the IBC; (ii) We direct that a CoC shall be constituted afresh in accordance with the provisions of the Insolvency and Bankruptcy (Amendment) Ordinance, 2018, more pa....
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....('CIRP' for short). While the said application was pending, NCLT by order dated 6th May, 2019 called upon the authorities, representatives of the allottees and others to file their reply on the necessity to proceed further with the CIRP in accordance with law, for considering the resolution plan received from the concerned bidder, subject to the outcome of the pending application. The IDBI Bank, feeling aggrieved by the opinion expressed by the NCLT to proceed further with the CIRP despite pending clarificatory motions before the NCLT/NCLAT respectively, including the application to exclude the period during the clarificatory application from the total period of 270 days of the CIRP, assailed the order passed by the NCLT dated 6th May, 2019 by way of Company Appeal (AT)(INS) No.536/2019 before the NCLAT. 7. The NCLAT, accordingly, thought it appropriate to proceed with both the appeals together for consideration and disposed of the same vide the impugned judgment. The relevant discussion and the conclusion arrived at by the NCLAT can be discerned from paragraph 19 onwards of the impugned judgment. The same read, thus : " 19. The only question arises for consideration in....
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....ncy resolution process is restored. (vi) Any other circumstances which justifies exclusion of certain period. However, after exclusion of the period, if further period is allowed the total number of days cannot exceed 270 days which is the maximum time limit prescribed under the Code". 20. Admittedly, no regulation was framed under the 'Insolvency and Bankruptcy Code' as to how the voting share of thousands of Allottees will be counted, all of whom come within the meaning of 'Financial Creditors' and thereby are members of the 'Committee of Creditors'. It was in this background the Allottees Association preferred the application before the Adjudicating Authority (National Company Law Tribunal), Allahabad Bench on 17th September, 2018 to decide such issue. The two Hon'ble Members of NCLT differed on the principle on 13th December, 2018 as noticed above and referred the matter to the Principal Bench for placing the matter before Third Hon'ble Member who has delivered its decision by the order dated 24th May, 2019. In the meantime, 270 days lapsed, if counted from the date the proceeding was remitted by the Hon'ble Supreme Court, i.e. 6th May, 2019. ....
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....rmed that 'Adani Infra (I) Ltd.' also proposed to file 'resolution plan' but we are not expressing any opinion with regard to the same. We have given opportunity to all the eligible persons to file 'expression of interest'/(improved) 'resolution plan', individually or jointly or in concert with any person, but those who are ineligible in terms of Section 29A, are barred from filing such plan. No liberty is given to 'Jaiprakash Associates Ltd.', in view of the aforesaid observation and decision of Hon'ble Supreme Court in 'Chitra Sharma' (Supra) 25. In view of the aforesaid observations, we are not inclined to interfere with the impugned order dated 24th (sic) May, 2019. Order of exclusion having already passed by this Appellate Tribunal, C.A. No.115 of 2019 in C.P. No.(IB) 77/ALD/2017 preferred by the 'Resolution Professional' and the order dated 6th May, 2019 as impugned in 'Company Petition (AT) (Insolvency) No.536 of 2019' are declared infructuous. Both the appeals stand disposed of with aforesaid observations and directions." 8. This judgment is assailed by Jaiprakash Associates Ltd. ('JAL' for short). JIL is the subsidiary of JAL. Another appeal has been f....
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.... arguments, there has been complete unanimity between all the stakeholders including the appellants before this Court that the liquidation of JIL must be eschewed as it would do more harm to the interests of the stakeholders, in particular the large number of home buyers, who aspire to have their home at the earliest. 11. Considering the position taken by the stakeholders before this Court and the pendency of other writ petitions and miscellaneous applications filed by the home buyers and also by JAL to issue directions and pass orders and, if necessary, in exercise of power under Article 142 of the Constitution of India to salvage the situation and provide for a wholesome solution which will subserve the interests of all concerned and in particular of large number of home buyers who have voting share of 62.3% (as mentioned in the report submitted by IRP) being constituent of CoC, it may not be appropriate nor necessary for us to dilate on the submissions made across the Bar by the concerned parties and to answer the questions of law urged by the appellants noted hitherto. Instead, we may exercise our plenary powers under Article 142 of the Constitution of India to effectuate th....
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....of supervising the work of the Committee. We must particularly be careful not to supplant the mechanisms which have been laid down in the IBC by substituting them with a mechanism under judicial directions. Such a course of action would in our view not be consistent with the need to ensure complete justice under Article 142, under the regime of law. Hence, the power under Article 142 should be utilised at the present stage for the limited purpose of recommencing the resolution process afresh from the stage of appointment of IRP by the order dated 9 August 2017 and resultantly renew the period which has been prescribed for the completion of the resolution process..." The revival of CIRP in relation to JIL is on account of this decision in Chitra Sharma and would, therefore, be binding on all concerned. It is between the same parties. 14. We are conscious of the fact that adopting the course indicated in the impugned judgment as our direction, may also have the effect of modifying the directions given in paragraph 42(i) in Chitra Sharma (supra) reproduced above, namely, that the initial period of 180 days for the conclusion of the CIRP in respect of JIL shall commence from the ....
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....er dated 9th August, 2018 passed by this Court in Chitra Sharma (supra), remained pending for quite some time. That delay is attributable to the law's delay. Neither the home buyers nor the other financial creditors can be blamed for the pendency of the proceedings before the NCLT and later on before the NCLAT. The NCLT realizing the uncertainty in resolving the said issue, wanted to proceed with the resolution plan subject to the outcome of the pending IA as is manifest from its order dated 6th May, 2019. Even that became subject matter of challenge in the appeal filed by the IDBI before the NCLAT which was finally disposed of vide the impugned judgment. 16. Suffice it to note that an extraordinary situation had arisen because of the constant experimentation which went about at different level due to lack of clarity on matters crucial to the decision making process of CoC. Besides that, in view of the recent legislative changes, the scope of resolution plan stands expanded which may now include provision for restructuring the corporate debtor including by way of merger, amalgamation and demerger and more so the power bestowed on the CoC to consider not only the feasibility and ....
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....eed, the third proviso to Section 12(3) predicates time limit for completion of Insolvency Resolution Process, which has come into effect from 16th August, 2019.The same reads thus : "Provided also that where the insolvency resolution process of a corporate debtor is pending and has not been completed within the period referred to in the second proviso, such resolution process shall be completed within a period of ninety days from the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019." Taking an overall view of the matter, we deem it just, proper and expedient to issue directions under Article 142 of the Constitution of India to all concerned to reckon 90 days extended period from the date of this order instead of the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019. That means, in terms of this order, the CIRP concerning JIL shall be completed within a period of 90 days from today. 20. We do not deem it necessary to dilate on the arguments of the respective counsel for the nature of order that we intend to pass, including about the locus standi of JAL which, in our opinion, already stands answered agains....