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2019 (11) TMI 316

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..... tempt 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 liquidation process under Chapter III of Part II of the I & B Code - the IRP is directed 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. Appeal disposed off. - CIVIL APPEAL NO….. OF 2019 (D. NO.27229/2019), CIVIL APPEAL NO. 6486 of 2019 - Dated:- 6-11-2019 - Justice A. M. Khanwilkar And Justice Dinesh Maheshwari, JJ. ORDER 1. Permission to file .....

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..... wed, 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 and continue to remain invested and shall abide by such directions as may be issued by the NCLT. 4. Consequent thereto, the matter proceeded before the NCLT being the adjudicating authority. The Interim Resolution Professional ( IRP for short) had issued public notice inviting claims from all JIL s stakeholders including the home buyers. IRP submitted his report on formation of Committee of Creditors ( CoC for short) before the adjudicating authority on the following basis : 37.3% in case of Financial Institutions. 62.3% home buyers and 0.4% Fixed Deposit holders 5. One of the home buyers Association filed application before the NCLT seeking clarification as to the manner in which the voting percentage of the allottees (home buyers) will be reckoned. That application was filed on 17th September, 2018 before the NCLT. After hearing the concerned authorities, the members of N .....

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..... 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 an application is filed by the Resolution Professional or the Committee of Creditors or any aggrieved person for justified reasons, it is always open to the Adjudicating Authority/Appellate Tribunal to exclude certain period for the purpose of counting the total period of 270 days, if the facts and circumstances justify exclusion, in unforeseen circumstances. 10. For example, for following good grounds and unforeseen circumstances, the intervening period can be excluded for counting of the total period of 270 days of resolution process: (i) If the corporate insolvency resolution process is stayed by a court of law or the Adjudicating Authority or the Appellate Tribunal or the Hon ble Supreme Court. (ii) If no Resolution Professional is functioning for one or other reason during the corporate insolvency resolution process, such as removal. (iii) The period between the date of .....

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..... 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. the date the matter was finally decided by the Third Hon ble Member (Total 260 days), can be excluded for the purpose of counting the 270 days. However, as the matter is pending since long, we are not inclined to exclude the total period of 260 days and instead in the interest of the Allottees, we exclude 90 days for the purpose of counting the period of 270 days of Corporate Insolvency Resolution Process , which should be counted from the date of receipt of the copy of this order. 23. The aforesaid period is excluded to enable the Resolution Professional / Committee of Creditors to call for fresh resolution plans and to consider them, if so required after negotiations pass appropriate order under subsection (5) of Section 30 of the I&B Code preferably within a period of 45 days. Rest of the period of 45 days margin is given to remove any difficulty and appropriate or .....

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..... on 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 after expiry of the statutory period for completion of the CIRP. 9. The limited issue that needs to be examined in these appeals is about the power of the NCLT or NCLAT, as the 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. Further, is it open to allow the bidder whose resolution plan has already been rejected by the CoC to submit revised plan or to invite fresh resolution plans to be considered by the CoC after the statutory period specified for submission of such plans? Learned counsel appearing for the concerned parties have invited our attention to the relevant provisions of the I & B Code to buttress their respective arguments. 10. After cogitating over the submissions, it has become clear to us that the inevitable fall out of accepting the stand taken by t .....

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..... is 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 with being in conflict with the opinion expressed by the three Judge Bench of this Court in Chitra Sharma (surpa). In paragraph 39 of the said decision, the Court observed, thus : 39. …Learned counsel for the IRP submitted that in the CoC which will be reconstituted under the amended IBC, the home buyers would have a substantial voting power so as to be able to effectively protect their interests. Moreover, this Court should follow the discipline of the IBC which has been enacted by Parliament specifically to streamline the resolution of corporate insolvencies. Matters involving corporate insolvencies require expert determination. The legislature has made specific provisions which are conceived in public interest and to facilitate good corporate governance. The Court should not take upon itself the burden of supervising the intricacies of the resolution process. Accept .....

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..... cy 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 & B Code so as to address the problems faced in implementation of the new legislation introduced as recently as in 2016. The case on hand is a classic example of how the entire process has got embroiled in litigation initially before this Court and now before the NCLT and NCLAT respectively, because of confusion or lack of clarity in respect of foundational processes to be followed by the CoC. That becomes evident from the time consumed by IRP or the adjudicating and appellate authority to remove the doubts on matter such as how the vote share of CoC be computed on account of inclusion of allottees/home buyers as financial creditors. The home buyers have also expressed some doubt about their status as secured creditors. All these issues are being ironed out by the adjudicating authority. It is also a matter of record that NCLT was functioning only on two days of the week and .....

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..... ns 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 stated to have been rejected. However, applying the principle underlying Regulation 36B(7), we deem it appropriate to permit the IRP to reissue request for resolution plans to the two bidders (Suraksha Realty and NBCC) and/or to call upon them to submit revised resolution plan(s), which can be then placed before the CoC for its due consideration. 17. In the present case, as aforementioned, 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. 18. In view of the legislative changes referred to above, 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), l .....

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..... er, 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 process the revised resolution plan from the abovenamed two bidders and take it to its logical end as per the provisions of the I & B Code within the extended timeline prescribed in terms of this order. iii) We direct that the IRP shall not entertain any expression of interest (improved) resolution plan individually or jointly or in concert with any other person, much less ineligible in terms of Section 29A of the I & B Code. iv) These directions are issued in exceptional situation in the facts of the present case and shall not be treated as a precedent. v) This order may not be construed as having answered the questions of law raised in both the appeals, including as recognition of the power of the NCLT / NCLAT to issue direction or order not consistent with the statutory timelines and stipulations specified in the I & B Code and Regulations framed thereunder. 22. .....

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