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Insolvency and Bankruptcy - Case Laws
Showing 121 to 140 of 177 Records
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2021 (5) TMI 276 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - pre-existing dispute or not - HELD THAT:- It is seen that the Petitioner had entered into Directors on Employment Agreement dated 01.08.2015 and worked as a Director in the Board of the Respondent Company. The present application has been filed for claiming unpaid 15 months' salary. The Petitioner has filed minutes of the meeting which has not been dated but has been signed by various parties. Pre-existing dispute between the parties based on the settlement has been arrived at. Since this matter is ex-parte, there are no complete facts before this Adjudicating Authority.
On perusal of documents, it is clear that various meetings between both parties were held, to arrive at amicable settlement. Since the respondent has not filed reply, the responsibility of the applicant to prove 'debt' and 'default' is very high. The onus is on the Applicant to satisfy that there is no "pre-existing dispute" between the both. From the documents, it is clear that there were lot of discussions and meetings between both. The outcome of the same is not before this Adjudicating Authority. Since the IBC is rigorous statue, abundant caution ought to be exercised, before passing order.
Application dismissed.
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2021 (5) TMI 275 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The Bench is of the view that the contention of the Corporate Debtor that 51% approval of Debenture-holders should have been taken in writing is incorrect. The very fact that the Debenture Trustee has written to all debenture-holder to give their consent and that a non-receipt of any response would constitute as 'deemed approval', is totally correct.
Hon'ble Supreme Court in M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK & ANR. [2017 (9) TMI 58 - SUPREME COURT] has clearly mentioned that in case where a Corporate Debtor commits a default of financial debt, the Adjudicating Authority has to merely see the records of the Information Utility and other evidence produced to satisfy itself that a default has occurred.
The facts clearly reveal that the Corporate Debtor who has defaulted in making the payment to the Petitioner is liable to pay the Petitioner - the nature of Debt is a "Financial Debt" as defined under section 5 (8) of the Code. It has also been established that there is a "Default" as defined under section 3 (12) of the Code on the part of the Debtor. The two essential qualifications, i.e. existence of 'debt' and 'default', for admission of a petition under section 7 of the I&B Code, have been met in this case. Besides, the Company Petition is well within the period of limitation.
Petition admitted - moratorium declared.
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2021 (5) TMI 274 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or not - Financial Debt or not - existence of debt and dispute or not - time limitation - HELD THAT:- The nature of transaction pursuant to the Investment Agreement and all other collateral transactions are that of investment based upon an 'Approved Business Plan' - It appears that as an Investor, the applicant herein had explored the possibility of making investment by taking calculated business risk. Many of the Clauses contained in the Investment Agreement demonstrate the fact that the Applicant is an 'Investor' and not a "Financial Creditor" within the meaning of the definition contained in the IBC. The allegation that the Corporate Debtor Company has not utilized the proceeds of investment in accordance with the approved business plan does not carry any merit in as much as the Board of the investee company consists of two nominee directors and an observer nominated by the investor in order to oversee the entire corporate documentation pertaining to various meetings and activities including meetings of the Board of Directors in order to safeguard the interest of the Investor Company. Therefore, the Investor cannot be and need not be treated as a "Financial Creditor".
Whether the alleged debt is a 'financial debt' and applicant as a "financial creditor" under the provisions of Section 5(8) of the IBC? - HELD THAT:- Admittedly, the entire amount due and payable under the application arises out of Investment-cum-Shareholders Agreement dated 07.09.2013 which was subsequently and mutually agreed between the parties and a Settlement Agreement dated 06.09.2016 was arrived at. Further, the applicant admits that the entire amount as agreed between the parties has been repaid by the Corporate Debtor. This alleged amount mentioned in the application is only towards the outstanding interest between the parties arising out of the Settlement Agreement dated 06.09.2016. Hence, an Investment Agreement which subsequently converted into a Settlement agreement with a payment schedule between the parties fails to fall within the definition of a 'financial debt' and the Applicant herein is a not a "Financial Creditor" as per the provisions of the IBC. The Applicant has also hopelessly failed to satisfy, regarding "date of default".
The alleged claim is not a 'financial debt' - Application dismissed.
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2021 (5) TMI 273 - NATIONAL COMPANY LAW TRIBUNAL , HYDERABAD BENCH
E-auction for the sale of assets of the Corporate Debtor as a going concern by the Liquidator - seeking permission to the Applicant to pay/adjust the Sale Consideration by way of investment into the equity shares of the Corporate Debtor - HELD THAT:- The Liquidator can sell the assets of the Corporate Debtor during liquidation in any of the modes stated in Regulation 32 of Liquidation Process Regulations. The Applicant purchased the Corporate Debtor as a going concern with a view to run the business and that in order to run the Company as a going concern, the Purchaser/Applicant herein is entitled to have certain reliefs stated above. The Liquidator has filed his reply stating that the assets of the Corporate Debtor is ordered to be sold as on going concern as it will fetch more value. The Liquidator also stated that the bid amount is more than the liquidation value. Already Applicant has deposited ₹ 1,07,96,456/-. In order for the Applicant to kick start the business and follow the law laid down under the Companies Act, 2013, it is imperative for the Tribunal to grant necessary reliefs.
Since the decision to sell the Corporate Debtor as a going concern is taken by the Liquidator in consultation with the creditors/stakeholders and the proceeds from the sale of assets are going to be utilized for distribution to the creditors in the manner specified under Section 53 of the Code, all the creditors of the Corporate Debtor get discharged and the assets are transferred free of any encumbrances.
Permission is accorded to Applicant to pay/adjust the sale consideration of ₹ 109,964,559/- by way of investment into the equity shares of the Corporate Debtor and upon payment of consideration, the following shall be deemed to have occurred and become effective and operative in the sequence and order mentioned - Corporate Debtor shall allot 10,996,456 shares at a face value of ₹ 10/- each to the Applicant and its shareholders which shall constitute 100% of the equity of the Corporate Debtor and such allotment to be made in accordance with Applicable laws - Application disposed off.
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2021 (5) TMI 272 - NATIONAL COMPANY LAW TRIBUNAL , HYDERABAD BENCH
Maintainability of application - availability of alternative remedy - Seeking reference of dispute or difference to arbitration - HELD THAT:- The availability of the alternative remedy cannot be the reason for not considering the application before us as regards to the debt and default of the corporate debtor as laid down by the NCLAT. The existence of pre-existing dispute as laid down by the corporate debtor is being demonstrated that a suit was pending in respect of operational debt, in respect whereof corporate debtor was alleged to have defaulted the adjudicating authority would not be drawing a conclusion in respect of alternative remedy available to the parties for settlement of the matter, even though the agreement between the parties provide for the same.
Further, section 238 of the IBC which has an overriding effect over the existing laws or any other law or contract would not admit of the alternative remedy to seek resolution of the dispute in the light of Section 238 of IBC.
The Adjudicating Authority is only to satisfy itself whether there is debt and default in the instant application. The alternative remedy that is available may not be of much help to the corporate debtor as long as there is debt and default in regard to the operational debt.
Application filed by the corporate debtor/applicant has no substance - application dimissed.
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2021 (5) TMI 271 - NATIONAL COMPANY LAW TRIBUNAL , AHMEDABAD BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - application has been filed on 29.05.2018 whereas period of supplies and invoices is 28.08.2015 to 31.03.2016. However, in the Form No. 5, it is mentioned that debt fell due between May 2015 to March, 2016 though two invoices are of the date of 28.08.2015 - typographical error - pre-existing dispute or not - Service of demand notice - principles of parity - HELD THAT:- It is an admitted fact that this application has been filed by the Resolution Professional and subsequently, pursued by liquidator of the Corporate Debtor and this has been done with the approval of the CoC. The amount claimed in this application is more than the threshold limit of ₹ 1 lakh. The debt is due and payable both in law as well as in fact because the same is neither barred by limitation nor premature. Notice under Section 8 of IBC, 2016 has also been delivered to the Corporate Debtor. As regard to plea of Corporate Debtor that reply to such notice of demand had been given, there are proofs of dispatch of such reply to notice which are not at all readable and clear, hence, it does not establish the fact of delivery of such reply. Thus, claim of the Corporate Debtor is liable to be rejected that it had replied to the notice of demand under 8 of IBC, 2016. Accordingly, we hold that no reply to Demand Notice has been given by the Corporate Debtor within the statutory period of 10 days from the receipt of such notice and no reasonable cause has been shown even during the course of hearing for not doing so. Hence, in our opinion, this application is liable to be admitted for this reason alone on the principle of parity i.e. whom delivery of notice under Section 8 of IBC, 2016 is mandatory for the Operational Creditor to make an application under Section 9 maintainable, similar obligation is on the Corporate Debtor to avoid itself being admitted into CIRP to give reply to such notice of demand within 10 days.
Pre-existing dispute or not - HELD THAT:- No material has brought on record by the Corporate Debtor as regard to what work was done by Operational Creditor till termination and what work remained to be completed. As per claims of Operational Creditor outstanding invoice pertain to work already done by the Operational Creditor only. Further, in the reply to notice of demand, assuming that it was given, slow rate of completion of project as alleged in letters of 15.03.2016 and 01.04.2016 has not been mentioned but issue of variation in rates applied in the invoice has only been mentioned, hence, such reply of Corporate Debtor contradicts nature of its claim as regard to pre-existing dispute. Thus, for this reason also, this claim of Corporate Debtor is rejected - The Corporate Debtor has failed to make out a triable case. However, considering the general importance of this issues as this please is taken almost in all case where aspect of pre-existing dispute is involved and even in above discussion, it has been held that Adjudicating Authority has briefed jurisdiction and proceedings before Adjudicating Authority are of summary nature. This situation has prompted us to look into legal mechanism which has been in operation for resolution of commercial disputes before IBC, 2016 was enacted.
It is pertinent to mention that the tribunalisation or creation of institutions of Adjudication Authority is a modern practice which is evolved, firstly, for the purpose of expeditious disposal of the matters, of social importance and in particular of matters of the nature of the commercial disputes having economic significance for the parties in dispute as well as for the society and the National Economy as a whole and secondly to deliver justice with the help of technical experts along with legal experts. For these reasons also, there are no substance in the claims made by the Corporate Debtor.
The application is otherwise complete and defect free - The application deserves to be admitted - application admitted - moratorium declared.
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2021 (5) TMI 270 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCH
Alteration of distribution matrix with respect to the resolution plan of the successful applicant - inclusion of success fee approved by the Committee of Creditors payable to Respondent - HELD THAT:- It is clear that the CoC has unanimously approved the Resolution Plan submitted by Prestige Estates Projects Ltd. The RP had also filed an application bearing No. 3714 of 2020 for approval of the said Resolution Plan. It is pertinent to note here that this application has been approved today by this Bench but the success fees has not been approved being unreasonable. This Bench has relied on the judgment of the Hon'ble NCLAT passed in the matter of MR. DEVARAJAN RAMAN, RESOLUTION PROFESSIONAL, POONAM DRUM & CONTAINERS PVT. LTD. VERSUS BANK OF INDIA LTD. [2020 (7) TMI 758 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] that the fees of the RP is not the commercial wisdom of the CoC.
This Bench hereby directs to proportionately distribute the said amount of ₹ 3 Crores among the employees/operational creditors/unsecured creditors - Application dismissed.
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2021 (5) TMI 253 - NATIONAL COMPANY LAW TRIBUNAL , AHMEDABAD BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - existence of debt and dispute or not - Service of demand notice - time limitation - HELD THAT:- Since the Corporate Debtor did not pay the outstanding, till 14.09.2020, the Operational Creditor served on the Corporate Debtor a demand notice under Section 8 of the IB code. In-spite of receipt of such notice, the Corporate Debtor neither made any payment nor replied the notice, pointing any pre-existing dispute. Hence, this application is filed to start the Corporate Insolvency Resolution Process of the Corporate Debtor - Notice of this application was duly served to the Corporate Debtor. One of its Directors, Mr. Mukund D. Patel appeared and filed the reply. We have gone through contentions therein. It appears to us that the Corporate Debtor did not dispute the fact that the operational debt of more than ₹ 17,62,920/- is due and payable by it to the Operational Creditor. It has also admitted that the payment of operational debt could not be made due to peculiar financial position that has arisen due to COVID-19 pandemic.
Since the Corporate Debtor admitted the existence of its debt and the default and also admitted that he did not make any payment in-spite of receipt of demand notice, we did not go into details of his further explanation(s) given in reply. Suffice to say that the Corporate Debtor admitted that in-spite of receipt of demand notice from the Operational Creditor it could not make payment of operational debt, due and payable due to his weak financial condition.
The fact proved on record is that the Corporate Debtor is an insolvent and its insolvency has to be resolved by the process of law - application for CIRP admitted - application is defect free and is admitted - moratorium declared.
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2021 (5) TMI 248 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute not - ratification of contract - HELD THAT:- Since the Corporate Debtor was completely aware of the existence of such outstanding balances in its books, the confirmation of balances by their Purchase Manager cannot be considered as voidable and hence cannot be invalid. In continuation to the above, the contract was not rescinded and hence sub-section 2 of Section 27 of the Specific Relief Act, 1963 does not permit rescission of the contract and the grounds that it is impliedly ratified - Further, the Corporate Debtor's objection that the Purchase Manager cannot enter or sign the confirmation of balances of its creditors on behalf of the Corporate Debtor and thereby making the entire transaction as invalid ab initio is not sustainable.
For the purpose of defeating the claim of the Operational Creditor, the Corporate Debtor is raising a feeble defence, which is not supported by any documentary evidence, that the Purchase Manager is not the Authorized Signatory of the Corporate Debtor in order to acknowledge the accounts. The Corporate Debtor has not placed on record any concrete evidence to show that the said signature has been obtained balance conformation of accounts of the Corporate Debtor.
This Bench is inclined to admit this Application as the Applicant has made out a case and also satisfied this Adjudicating Authority for admitting this Application. It is also proved that there is a debt due and payable by the Corporate Debtor - Application admitted - moratorium declared.
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2021 (5) TMI 247 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditor - existence of debt and dispute or not - HELD THAT:- It is seen from the 'Master Data' that the Applicant's company is a public company limited by shares. The transaction between both the parties arise out of agreement of sale dated 04.01.2016. Admittedly, after various issues between both, the agreement for sale was cancelled by Applicant and consequently sought for refund of the advance paid. This clearly fails as 'financial debt' under Section 5(8) of IBC, 2016.
Thus, it is concluded that the alleged debt failed as "Financial Debt" - application dismissed.
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2021 (5) TMI 246 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Permission for withdrawal of Corporate Insolvency Resolution Process (CIRP) - Section 12A of Insolvency And Bankruptcy Code, 2016 (IBC) and Regulation 30A of Insolvency and Bankruptcy Board of India [Insolvency Resolution Process for Corporate Persons] Regulations, 2016, (Regulations) r/w Rule 11 of NCLT, Rules 2016 - HELD THAT:- Perusal of the statement of the expenditure as made out at Page No. 37 discloses that apart from the fees as claimed by the IRP a major portion of the expenditure seems to have been incurred in respect of meeting of the expenditure in relation to Advocate fees for filing of the Application under Section 19(2) as well as the present Application and for filing a Counter to the Application as filed by the erstwhile Director under Section 60(5) of the IBC, 2016. Since already a sum of ₹ 2,00,000/- as represented by the Operational Creditor seems to have been paid and the additional cost in a sum of ₹ 75,000/- seems to have been incurred in relation to the legal cost, in view of non-cooperation on the part of the personnel of the Corporate Debtor and also in defending the Application as filed by the erstwhile Director of the Corporate Debtor, it is appropriate that the balance sum of ₹ 73,938.45 is required to be defrayed by the Corporate Debtor.
The CIRP initiated against the Corporate Debtor stands withdrawn.
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2021 (5) TMI 236 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Permission for withdrawal of appeal - appellant case is that Appeal may be allowed to be withdrawn with liberty to seek restoration in case the effort with regard to Section 12 A of IBC runs into difficulty - HELD THAT:- There are no reason to doubt that the Adjudicating Authority without standing on technicalities would pass appropriate Orders, if settlement has taken place between the Original Operational Creditor and Corporate Debtor and CoC is not yet constituted.
The Appeal is permitted to be withdrawn with liberty to seek restoration of the Appeal in case at any future time the effort to settle in terms of Section 12A of IBC runs into difficulty and does not happen.
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2021 (5) TMI 235 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Permission for withdrawal of appeal - Appellant submits that in view of such developments, she has instructions from the Appellant to withdraw the Appeal - HELD THAT:- The Appeal is disposed as withdrawn without liberty to challenge the same Impugned Order.
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2021 (5) TMI 233 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Permission to withdraw the appeal with the liberty to file fresh appeal at appropriate stage - HELD THAT:- Permission granted.
The appeal is dismissed as withdrawn.
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2021 (5) TMI 232 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Permission to withdraw the appeal with liberty to pursue the legal remedies that may be available to Appellant - HELD THAT:- This is not objected to by Respondents as the Corporate Insolvency Resolution Process proceedings are proceeding ahead and embargo placed on constitution of Committee of Creditors stands removed in terms of order dated 4th February, 2021.
The appeal is dismissed as withdrawn. The Appellant shall be at liberty to pursue any other remedy available under law.
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2021 (5) TMI 231 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Withdrawal of appeal - Learned Counsel submits that he has instructions from the Appellant to withdraw this Appeal - HELD THAT:- The Appellant is allowed to withdraw this Appeal. It is disposed accordingly.
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2021 (5) TMI 230 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Permission for withdrawal of appeal - Appellant submits that he has been instructed to withdraw the instant Appeal bearing no. Company Appeal (AT) (Insolvency) No. 928 of 2020 - HELD THAT:- Appellant does not want to press the Appeal. The Appeal is dismissed as not pressed.
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2021 (5) TMI 229 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Permission for withdrawal of appeal - fault in the conduct of Corporate Insolvency Resolution Process or not - order of admission and commencement of Corporate Insolvency Resolution Process against the Corporate Debtor was not communicated to Appellant for 7 months - principles of natural justice - HELD THAT:- The appeal is permitted to be withdrawn with liberty granted to the Appellant to file an application before the Adjudicating Authority (National Company Law Tribunal), Division Bench-I, Chennai for revisiting the impugned order and expunging the observations/ remarks made against the Appellant as Resolution Professional, within one week.
Appeal dismissed as withdrawn.
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2021 (5) TMI 228 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Permission for withdrawal of appeal - Appellant submits that the claim of the Respondent (Financial Creditor) has already been settled and the company petition which was pending before the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata - HELD THAT:- Since in the instant appeal no more grievance survives, learned counsel for the Appellant is permitted to withdraw.
The appeal is accordingly dismissed as withdrawn.
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2021 (5) TMI 215 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI BENCH
Exclusion from the period of CIRP - exclusion of period commencing from 5 May 2020 till 31 October 2020, from the CIRP, to provide the benefit under Regulation 40 C - Section 12 (2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Based on Regulation 40C, it is clear that the Regulator, the IBBI brought this Regulation to meet the eventualities of the Covid 19 pandemic. It is stated that the period of lockdown imposed by the Central Government in the wake of the Covid-19 outbreak shall not be counted for the timeline for any activity that could not be completed due to such lockdown about a Corporate Insolvency Resolution Process - In the instant case, the IRP/RP conducted the CIR Process in the timeline with the provisions of the Code and the Regulations and, when required, invoked Regulation 40 C. The RP doesn't need to invoke Regulation 40 C as a matter of routine. Regulation 40 C provides exclusion of the timeline for completion of CIRP during the Covid-19 outbreak for any activity that could not be completed due to such lockdown. It excludes the timeline for the activities that could not be performed due to the lockdown during the Corporate Insolvency Resolution Process.
On perusal of the minutes of the CoC, it appears that the RP apprised the CoC about the legal options available either to seek an extension of the timeline for submission of Resolution Plan or to make the decision for publication of fresh Form-G. It was the CoC's commercial decision that "no extension of time for submission of Resolution Plan should be done and RP was directed to expedite the valuation process and check the feasibility and viability of the Resolution Plan already submitted and present the eligible Resolution Plan before the CoC for consideration." -In its commercial wisdom, the CoC discussed the viability and feasibility of the Resolution Plan and had taken such a decision which is pending consideration before the Adjudicating Authority.
In the instant case, even though it is found that Regulation 30 C could have been applied for exclusion of 179 days on account of the unprecedented situation created by the Covid 19 pandemic and some of the Financial Creditors opined for fresh publication of form G for the invitation of EOI. But the COC had unanimously decided only for seeking exclusion of 179 days, i.e. from 5 May 2020 to 31 October 2020, for completion of CIRP. But the CoC, under its commercial wisdom, did not prefer for publication of Form-G afresh to invite Expression of Interest. Therefore such a decision of the CoC is not justifiable.
The decision taken by the Adjudicating Authority needs no interference - Appeal dismissed.
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