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M/s. Brasher Boot Company Limited Versus M/s. Forward Shoes (India) Private Limited

2018 (2) TMI 885 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI

Corporate Insolvency Resolution Process - Time limit for completion of insolvency resolution process - extension of the CIRP more than 90 days after the completion of 180 days - Held that:- It is settled principle that the proviso cannot be torn apart from the main enactment nor can it be used to nullify by implication what enactment clearly says, nor set at naught the real object of main enactment, unless the words of proviso are such that it is its necessary effect. - To support the view, .....

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sition stated above, the second objection raised by the Counsel for the Operational Creditor stands rejected. Therefore, this Authority is satisfied that the CIRP could not be completed during 180 days plus 30 days in this matter, so there is a requirement to grant extension of CIRP for a further period of sixty days. Hence, the CIRP period in relation to the Corporate Debtor, viz., M/s. Forward Shoes (India), private Limited, is hereby extended for a further period of 60 days w.e.f. 15.01.2018 .....

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ted, seeking extension of further period of 90 days for the Corporate Insolvency Resolution Process (CIRP). On 06.12.2017, an extension of CIRP was granted by this Adjudicating Authority for a period of 30 days w.e.f. 15.12.2017 onwards which has already expired. 2. The Resolution Professional (RP) has submitted that a tentative Resolution Plan is in place which has been submitted by M/s. Acestar Properties Private Limited, wholly owned subsidiary of M/s. XS Real Properties (P.) Limited, who is .....

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ee of Creditors (CoC) were convened, one by IRP and another by RP. The 2nd meeting of CoC was convened on 01.11.2017 i.e. more than two months after the date of the Ist meeting of the CoC, and in two months, there has been no activity for being reported by the RP during the 2nd meeting of the CoC. The RP had not even invited the prospective lenders, investors and any other person to put forward a Resolution Plan until 2nd meeting of the CoC. It has also been submitted that very recently i.e. on .....

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he second objection is that the discretionary powers under Section 12 of the I&B Code, 2016, has already been exercised by this Adjudicating Authority vide Order dated 06.12.2017 by granting 30 days extension. Therefore, no further extension can be granted for the CIRP as prayed by the Applicant viz, the RP, because the proviso to section 12(3) provides that the extension of CIRP after the expiry of the period 180 days can be granted once. 5. The basic object and purport of the provisions of .....

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r the Operational Creditor on 11.01.2018, a tentative Resolution Plan has been submitted by M/s. Acestar Properties Private Limited, that requires consideration by the RP, for being presented before the CoC for approval. However, the time period of 180 days had expired on 15.12.2017 and 30 days time was extended, vide Order dated 06.12.2017. In case, more time is not granted to the RP for working out the Plan of the Resolution Applicant as mentioned above, it will amount to scuttling the process .....

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e CIRP could not been completed within 180 days. 7. The arguments of the Counsel for Operational Creditor that the Application filed by the RP is devoid of merits is not tenable in the eye of law for the reasons that it is for the CoC to decide as to whether there requires extension of CIRP or not. The CoC in its 2nd meeting held on 01.11.2017 has resolved that RP viz., Ms. Kavitha Surana, be and is hereby authorised to apply for extension to the Adjudicating Authority for further period of 90 d .....

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any Resolution Plan for being submitted to the CoC for consideration. Therefore, the objection raised by the Operational Creditor is not tenable in the eye of law due to the above mentioned reason. 8. The second objection raised by the Counsel for the Operational Creditor is that the proviso provided to Sub-section (3) of Section 12 of the I&B Code, 2016, provides that the Adjudicating Authority can exercise the discretion for extension of the time period of CIRP not more than once, because .....

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cess cannot be completed within one hundred and eighty days. It may by order extend the duration of such process beyond one hundred and eight days by such further period as it thinks fit, but not exceeding ninety days. Provided that any extension of the period of corporate insolvency resolution process under this section shall not be granted more than once. As can be seen, Sub-section (3) of Section 12 of the I&B Code, 2016 provides that the Adjudicating Authority, if satisfied that the CIRP .....

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ion or to remove any doubt in relation to its implementation. The proviso cannot take away the effect of the main provision. 9. However, in this case, the proviso to Sub-section (3) of Section 12 of I&B Code, 2016, provides that any extension of period of CIRP under this Section shall not be granted more than once which means that any extension of CIRP cannot be given more than 90 days in total after expiry of 180 days. In other words, the proviso restricts the exercise of discretion by the .....

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p;B Code, 2016 will be rendered otiose. This view is supported with a well-established maxim of interpretation which says ut res magis valeat quam pereat. This Latin maxim of interpretation when translated into English means that it is better for a thing to have effect than to be void. But, the language used in Sub-section (3) of Section 12 of the I&B Code, 2016 is plain and unambiguous, to which an ordinary meaning can easily be given. So the principal provision need not to be aided by the .....

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