2018 (5) TMI 78 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI

Maintainability of resolution plan submitted by the applicant on 20.02.2018 - rejection on the ground of delay - Held that: - It is pertinent to mention that after the Corporate Insolvency Resolution Process is triggered then the broad time line of 180 days or extended period of 270 days is fixed by Section 12 of the Code. The term of the Interim Resolution Professional according to Section 16 (5) of the Code ‘shall not exceed thirty days from the date of his appointment. During his tenure of 30 days he is required to make a public announcement in terms of Section 13(l)(b) of the Code immediately after his appointment.

A perusal of Section 12 of the Code would show that initial time limit for completion of Corporate Insolvency Resolution Process is 180 days from the date of admission of the application which is extendable to 270 days if the Committee of Creditors by a vote of 75% of voting share passes a resolution to that effect. The provisions of Regulation 39 of CIRP Regulations as stood on 21.09.2017, postulate that a resolution applicant shall endeavour to submit a resolution plan 30 days before the expiry of the maximum period permitted under Section 12 for completion of the C1R Process. It is evident that a resolution applicant could submit its plan 30 days before expiry of the maximum period permitted under Section 12.

In the present case, after issuance of public notice in print media on 21.09.2017 the Resolution Professional has not issued any other public notice notifying the criteria which might have been laid down by the Committee of Creditors. If no new public notice notifying the criteria finalized by CoC in terms of amendment is issued, then the original public notice would prevail with regard to the period for receipt of Resolution Plan application.

The resolution plan in the present case was submitted on 20.02.2018. The period of 180 days was extended to 270 days on an application filed by the Resolution Professional under Section 12 (2) vide order dated 22.12.2017. The period of 270 days admittedly would be expiring on 22.04,2018. If we apply the aforesaid yardstick then the decision of the CoC in its meeting dated 21.02.2018 would not be sustainable.

In the present case the process which has started on 21.09.2017 could not be concluded by 21.02.2018 on account of unnecessary complications created in conducting the process by inviting expression of interests. It is worthwhile to notice that the fashionable phenomena ‘expression of interest’ is resorted to in cases where thousands of applicants are expected to participate. In a case where the number is not likely to exceed more than ten then such process seems to be un-necessary.

The object of the Insolvency and Bankruptcy Code is to reorganize and evolve insolvency resolution of, inter alia, Corporate persons in a time bound manner for maximization of the value of assets of such person.

The Resolution Professional shall place the unopened sealed cover apparently containing the resolution plan of the Liberty House before the next meeting of the CoC - The period spend on this litigation stands excluded. The whole process may now be concluded before 23.06.2018 - Resolution Plan of the Liberty House shall not be rejected on the ground of delay - application allowed.