National Company Law Appellate Tribunal, New Delhi (NCLAT): The Coram of Justice M. Venugopal (Judicial Member) and Dr Ashok Kumar Mishra (Technical Member) held that if granting exclusion of time helps the Corporate Debtor to revive, the basic objective of Insolvency and Bankruptcy Code will eb achieved.
An appeal was filed under Section 61 of the Insolvency and Bankruptcy Code, 2016 against the impugned order passed by the Adjudicating Authority.
Adjudicating Authority had not granted exclusion of certain period of ‘Corporate Insolvency Resolution Process’ inspite of the Resolution passed by the 100% voting share of the Committee of Creditors of the Corporate Debtor.
Counsel for the appellant submitted that the exclusion of 90 days from the CIRP of the CD would save the company from ‘Liquidation’. It was also pointed that there was a ‘Prospective Resolution Applicant’ who has submitted his ‘Resolution Plan’ & there was a likelihood for the revival of the CD.
Due to the prevalent pandemic, there was not much progress in de-attachment of property from ED at Tribunals/Courts. The CoC had also considered reissue of ‘Expression of Interest’ (EOI) and hence there was a need for exclusion of such period.
Appellant was perusing legal proceedings to get attachment of sole property of the CD lifted before various judicial forum to get the property released as early as possible and also cited the decision of Supreme Court in the case of Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta, (2020) 8 SCC 531, wherein it has held that the ‘Adjudicating Authority or the Appellate Authority has discretion to extend the time of CIRP period even beyond 330 days in certain exceptional cases’.
Analysis and Decision
Tribunal observed that the pandemic had no doubt updated the normalcy in various activities of ‘Corporate Insolvency Resolution Process’.
The Resolution Professional received a Resolution Plan for Prospective Resolution Applicant which was under the scrutiny of Resolution Professional/Committee of Creditors.
Further, Coram expressed that,
“If granting of 90 days helps the Corporate Debtor to revive, then the basic objective of the I&B Code, 2016 will be met. Liquidation is the last resort.”
Therefore, Tribunal opined that no prejudice will be caused in allowing the instant appeal to prevent an aberration of justice and to promote the substantial cause of justice.
Hence, the appeal was allowed. [Vinod Tarachand Agrawal, In Re., 2022 SCC OnLine NCLAT 82, decided on 16-2-2022]
Advocates before the Tribunal:
For Appellant: Mr. Monaal Davawala, Advocate.