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2019 (11) TMI 316

..... he case may be, to exclude any period from the statutory period in exercise of inherent powers sans any express provision in the I & B Code in that regard - HELD THAT:- The inevitable fall out of accepting the stand taken by the appellants would be to set aside the impugned judgment and relegate the parties to a situation where the only option would be to proceed with the liquidation process concerning JIL under Chapter III of Part II of the I & B Code, on the premise that no resolution plan has been received before the expiry of the Insolvency Resolution Process under Section 12 of the I & B Code or being a case of rejection of the resolution plan under Section 31 of the I & B Code. In the present case, there is unanimity amongst all the parties appearing before this Court including the resolution applicant that liquidation of JIL must be eschewed and instead an attempt be made to salvage the situation by finding out some viable arrangement which would subserve the interests of all concerned. We are of the considered opinion that we need to and must exercise our plenary powers to make an attempt to revive the corporate debtor (AIL), lest it is exposed to liquidatio .....

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..... initial period of 180 days for the conclusion of the CIRP in respect of JIL shall commence from the date of this order. If it becomes necessary to apply for a further extension of 90 days, we permit the NCLT to pass appropriate orders in accordance with the provisions of the IBC; (ii) We direct that a CoC shall be constituted afresh in accordance with the provisions of the Insolvency and Bankruptcy (Amendment) Ordinance, 2018, more particularly the amended definition of the expression financial creditors ; (iii) We permit the IRP to invite fresh expressions of interest for the submission of resolution plans by applicants, in addition to the three shortlisted bidders whose bids or, as the case may be, revised bids may also be considered; (iv) JIL/JAL and their promoters shall be ineligible to participate in the CIRP by virtue of the provisions of Section 29A; (v) RBI is allowed, in terms of its application to this Court to direct the banks to initiate corporate insolvency resolution proceedings against JAL under the IBC; (vi) The amount of ₹ 750 crores which has been deposited in this Court by JAL/JIL shall together with the interest accrued thereon be transferred to the NCLT .....

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..... NCLAT. 7. The NCLAT, accordingly, thought it appropriate to proceed with both the appeals together for consideration and disposed of the same vide the impugned judgment. The relevant discussion and the conclusion arrived at by the NCLAT can be discerned from paragraph 19 onwards of the impugned judgment. The same read, thus : 19. The only question arises for consideration in these appeals is whether in the facts and circumstances of the case and the interest of the Allottees, which is of primary importance in this Corporate Insolvency Resolution Process , the Jaypee Infratech Ltd. (Corporate Debtor) should be allowed to go for Liquidation on the ground that 270 days has expired on 6th May, 2019 or the period from 17th September, 2018 to 4th June, 2019 during which the matter remained pending for consideration before the Adjudicating Authority relating to voting share of the Allottees should be excluded for the purpose of counting 270 days in the light of the decision Quinn Logistics India Pvt. Ltd. vs. Mack Soft Tech Pvt. Ltd. & Ors. - Company Appeal (AT) (Insolvency) No.185 of 2018 wherein this Appellate Tribunal observed: 9. From the decisions aforesaid, it is clear that if a .....

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..... placing the matter before Third Hon ble Member who has delivered its decision by the order dated 24th May, 2019. In the meantime, 270 days lapsed, if counted from the date the proceeding was remitted by the Hon ble Supreme Court, i.e. 6th May, 2019. 21. This is an extraordinary situation when the law was silent and there was no guideline, which caused difference of opinion between the two Hon ble Members and finally decided by the Third Hon ble Member. In Quinn Logistics India P. Ltd. vs. Macksoft Tech P. Ltd. taking into consideration different situations including extra ordinary situation, this Appellate Tribunal held that certain period can be excluded while counting the total period of 270 days. The aforesaid principle has also been followed by the Hon ble Supreme Court in the case of Arcelormittal India Private Limited vs. Satish Kumar Gupta & Ors. - (2019) 2 SCC 1 as also in the case of Chitra Sharma (Supra). 22. In view of aforesaid extra ordinary situation, we are of the view that the period from 17th September, 2018 i.e. the date of application filed by the Association of the allottees for clarification for the order and till the final decision i.e. 4th June, 2019 i.e .....

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..... resaid observations and directions. 8. This judgment is assailed by Jaiprakash Associates Ltd. ( JAL for short). JIL is the subsidiary of JAL. Another appeal has been filed by the Wish Town Home Buyers Welfare Society (one of the home buyers Association). In the appeal filed by the JAL, two principal questions of law have been urged. The first is as to whether the NCLAT had power or authority in law to exclude 90 days from the statutory period of the CIRP, much less for the reasons stated in the impugned judgment. The second question is as to whether despite rejection of resolution plans of Suraksha Realty and NBCC by the CoC on 5th May, 2019 and 10th June, 2019 respectively, could the NCLAT, after excluding 90 days period from the total CIRP period, again start the CIRP afresh by allowing the two bidders to submit their revised resolution plans and/or invite fresh resolution plan from eligible persons and to call upon the CoC to reconsider the same, if so required, after negotiations. The home buyers Association, in its appeal have also questioned the power of NCLAT to disregard the mandatory provisions of I & B Code and to issue directions for inviting fresh resolution plans .....

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..... nd to answer the questions of law urged by the appellants noted hitherto. Instead, we may exercise our plenary powers under Article 142 of the Constitution of India to effectuate the exposition in Chitra Sharma (supra) and to do substantial justice to the parties before us. In doing so, we may have to adopt the same course as noted in paragraphs 22 to 24 of the impugned judgment with some modulation thereto. 12. We are conscious of the fact that a section of the home buyers have come up in appeal against the impugned judgment as they entertain bona fide apprehension that the entire process would get delayed further due to inviting fresh offers from eligible persons. However, we must immediately note that we are not in favour of inviting fresh resolution plans from other eligible persons, as noted by the NCLAT, for being considered by the CoC afresh. We shall elaborate on this a little later. 13. We also take note of the suggestion given by the home buyers Association, appellants before this Court, that the entire process be kept outside the I & B Code dispensation and to be monitored directly by this Court. The temptation of accepting the said submission, however, is fraught wi .....

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..... 42(i) in Chitra Sharma (supra) reproduced above, namely, that the initial period of 180 days for the conclusion of the CIRP in respect of JIL shall commence from the date of the order, i.e., 9th August, 2018 and the further extension could be only for 90 days. However, it is one thing to accept the stand of the stakeholders to provide mechanism outside the I & B Code than to say that the mechanism provided by I & B Code be modulated in some respect whilst ensuring that such modulation does not do any violence to the legislative intent and at the same time, subserve the cause of justice and provide a window to find out a viable solution to all the stakeholders. 15. We are also conscious of the fact that the recent amendment to the I & B Code has come into effect, thereby amending Section 12 to freeze or peg the maximum period of CIRP to 330 days from the insolvency commencement date which in this case must be taken as 9th August, 2018 in light of the direction given in Chitra Sharma (supra). It is, however, noticed from several amendments made to the I & B Code from time to time that the Legislature has also continually worked upon introducing changes to the I & .....

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..... ion for restructuring the corporate debtor including by way of merger, amalgamation and demerger and more so the power bestowed on the CoC to consider not only the feasibility and viability of the resolution plan but also the manner of distribution proposed, which may take into account the order of priority amongst the creditors. Additionally, the recently inserted Section 12A enables the adjudicating authority to allow the withdrawal of an application filed under Section 7 or Section 9 or Section 10, on an application made by the applicant with the approval of 90% voting share of the CoC. Similarly, subclause (7) of Regulation 36B inserted with effect from 4th July, 2018, dealing with the request for resolution plans unambiguously postulates that the Resolution Professional may, with the approval of the Committee, reissue request for resolution plans, if the resolution plans received in response to earlier request are not satisfactory, subject to the condition that the request is made to all prospective resolution applicants in the final list. In the present case, finally only two bidders had participated and submitted their resolution plan which was placed before the CoC and stat .....

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..... spective counsel for the nature of order that we intend to pass, including about the locus standi of JAL which, in our opinion, already stands answered against JAL by virtue of Section 29A of the Act as expounded in Chitra Sharma (supra). 21. Accordingly, we pass the following order to do substantial and complete justice to the parties and in the interest of all the stakeholders of JIL: i) We direct the IRP to complete the CIRP within 90 days from today. In the first 45 days, it will be open to the IRP to invite revised resolution plan only from Suraksha Realty and NBCC respectively, who were the final bidders and had submitted resolution plan on the earlier occasion and place the revised plan(s) before the CoC, if so required, after negotiations and submit report to the adjudicating authority NCLT within such time. In the second phase of 45 days commencing from 21st December, 2019, margin is provided for removing any difficulty and to pass appropriate orders thereon by the Adjudicating Authority. ii) The pendency of any other application before the NCLT or NCLAT, as the case may be, including any interim direction given therein shall be no impediment for the IRP to receive and pro .....

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