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TaxTMI 
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2024 (7) TMI 1769
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....he connected Appeal, the Appellant has filed an Intervention Application, being IA No. 670/2021 & IA No. 671/2021, and the same has been sought to be withdrawn. Hence the same is accordingly directed to be dismissed as withdrawn. In both the Appeals, the issues coming forth from the respective arguments as extended by the counsels, are as to what would be the rational interpretations to be given to Section 12 and especially the 2nd proviso to it of the Insolvency and Bankruptcy Code, 2016, for the purposes of extension of time towards completion of the CIRP proceedings and how such can be undertaken under provisions contained under Section 60(5) of the Code. Another very important issue which involves consideration is as to how the term "legal proceedings" would be construed for the purposes of extension of time, in the context of the provisions contained under 2nd proviso to Section 12(2), and whether the pendency of proceedings for the "consolidation" of the two Company Petitions could be taken as to be a legal proceeding at all, as contemplated under the I & B Code. Before dealing with the aforesaid issues, we feel it apt to precisely deal with the facts of both the App....
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....d allowed only 67 days for exclusion on account of Covid-induced lockdown and accordingly directed that with this exclusion CIRP period stands extended up to 02.02.2021 by which RP must complete CIRP. (xi) Against this order dated 26.11.2020 the instant Appeal has been filed before this Tribunal. Taking up the case NCLAT granted stay on the Impugned Order on 20.12.2020. Subsequently, on application by RP, NCLAT on 08.04.2021 clarified that CIRP of the CD may continue as per Law and the stay order will not come in the way. (xii) In another order dated 27.01.2021 NCLAT requested NCLT to decide on the Consolidation Application as early as possible. NCLT on 12.02.2021 dismissed the Consolidation Application. (xiii) Against this order, Company Appeal (AT) (CH) (Ins) No.46/2021 was filed before NCLAT which was permitted to be withdrawn by NCLAT on 11.06.2024. (xiv) Thus, finally there remains the 2 Company Appeals CA (AT) (CH) (Ins) No.1116/2020 filed by RP of the CD and CA (AT) (CH) (Ins) No.1097/2020, filed by CoC to be decided upon, in which the order of NCLT dated 26.11.2020 declining to exclude 102 days from CIRP Timelines is being challenged. ....
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....ion of CIRP proceedings as provided under Section 12. Consolidation of Company Petitions, is not a procedure prescribed under the I & B Code, which since being an exclusively a special statute, has got its self-contained procedure. A procedural law cannot be permitted to be, disturbed or modified by a way of an interpretation of law or in a manner to suit a particular need in a particular case depending upon the facts of the case, because the procedural law particularly aims at to attain the objective of the Act and if it is permitted to be altered, it may at times lead to judicial impropriety and distortion too. Once the consolidation is not a philosophy as prescribed under I & B Code nor has it been envisaged by the framers of law, the same could not be introduced through an interpretation of law. As it has been informed by the Learned Counsel for the Appellant, that it is an issue pending and is subject matter of consideration in a proceeding under Section 62 of I & B Code, before the Hon'ble Apex Court, hence, from that perspective we are not expressing any opinion on the aspect, as to whether there could at all be a consolidation of company cases under the provision of the ....
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....the past filled her mind to the exclusion of all else. Opp inclusion 2 [c] a person or thing that is not induced in sth: Check the list of exclusions in the insurance policy. 3 [U] ~ (of sth) the act of deciding that sth is not possible: the exclusion of robbery as a motive 4[U, C] (BrE) a situation in which a child is banned from attending school because of bad behaviour: the exclusion of disruptive students from school. Two exclusions from one school in the same week is unusual". If a logical interpretation is given to the description of the word extension as extracted above, it means that it is a continuation or an addition or an enlargement of an act, which has already been partially carried out, and for that reason it will not include within its ambit the concept of "exclusion" as it has been prayed for by the appellant herein for the purposes of extension of the period under the 2nd proviso to 12(3), stipulated for conclusion of the CIRP proceedings by excluding certain time period within it. The word "extension" ordinarily implies the prior existence of something which is to be extended further. The said concept has been dealt with in the matter of State Vs Greaves C52....
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....atisfied that the subject matter of the case is such that corporate insolvency resolution process cannot be completed within one hundred and eighty days, it may by order extend the duration of such process beyond one hundred and eighty days by such further period as it thinks fit, but not exceeding ninety days". The legislature had specifically used the word "extension" and has deliberately, not used the word "exclusion" under Section 12. That is why if the implication of Section 12(2) is taken into consideration, it literally provides for the extension of the period of the CIRP proceedings which does not contemplate an exclusion of the period spent in certain other incidental proceedings, by the parties to a company petition for the purposes of meeting the intention of Section 12(2). An exception has been attempted to be carved out by the Learned Counsel for the Appellant by arguing that the 'period to be extended', therein also will mean 'period to be excluded', as the same is included under the 2nd proviso of Section 12(3) which is extracted hereunder: - "^2[provided further that the corporate insolvency resolution process shall mandatorily be completed within a peri....
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....rein is to be excluded. Hence, he contends that the exclusion is a concept which is a self-contained provision under the 2nd proviso to 12(3). The interpretation to these expressions, becomes an important issue to be dealt with by us. We are of the view that when an exception has been carved out by the 2nd proviso of Section 12(3), it will mean that this exception could only be in relation to the proceedings which are contemplated under the I & B Code and not otherwise which has been attempted to be argued by the counsel for the appellant, who contends that the proceedings for consolidation of the cases will fall to be within the domain of the expression of the legal proceedings and hence the period as engaged therein, in carrying the proceedings for consolidation of Company Petitions should be excluded for the purposes of determining the end date of the completion of the CIRP proceedings. We are in disagreement to this argument, for the reason being, that it is only those legal proceedings which will qualify for exclusion provided they satisfy the subsequent expression given under the 2nd proviso, that is "in relation to such resolution process of the corporate debtor". The ....
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.... to withdraw from the said process. But this term "exclusion" does not mean an exclusion of the period engaged to pursue it, as it has been sought to be pressed by the counsel or the appellant so as to exclude the period, which was involved in the proceedings with regards to the consolidation of company petitions, because if the principle as sought to be pressed by the appellant is taken into consideration it will be having an altogether different impact according to the facts of the case, because that it will be on contrary to the provisions of Section 12 which did not use the word exclusion and coupled with the fact that the use of word exclusion herein may be procedurally misused by the parties to gain time for their own benefit by filing applications such as consolidation application which was not procedurally prescribed under the statute. It was further argued by the Learned Counsel for the Appellant, that the exclusion is a concept which could be borrowed from the provisions contained under Regulation 40 and especially 40-C of IBBI (Insolvency Resolution Process for Corporation Persons), Regulations, 2016. Regulation 40 of the I & B Code is extracted hereunder: - ....
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....w for the time being in force, NCLT shall have jurisdiction to entertain or dispose of:- (C) Any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the Corporate Debtor or Corporate person under this code". The Counsel of Appellant has attempted to argue that the exclusion of 102 days from CIRP timelines can be ordered by this Tribunal under Section 60(5)(C) of the Code as this is a matter of priority on the grounds that CIRP has to be done successfully failing which Rs.29330 crore of credit and electricity supply to 6 states will be at risk and as the Impugned Order is creating an impediment which needs to be set right. We are of the view that logical interpretation has to be given to provisions of Section 60(5)(C), that even if there is a provision for "exclusion" of a period under the statute, that has had to be read as if it is an "extension" of time, to meet out the purpose of Section 12 of I & B Code. Having gone through the Sub- Section 5(c) of Section 60, which has been extracted above, we are clear that whenever there is a question of "priorities" to be decided, those ....