TMI Blog2018 (12) TMI 1821X X X X Extracts X X X X X X X X Extracts X X X X ..... alculated taking August 9, 2017 it being the insolvency commencement date as the cut-off date. Once the insolvency process commences from August 9, 2017 the claim amounts have to be verified as on August 9, 2017. Although the claims were received after August 9, 2017 or after August 9, 2018. This Authority is of the considered view that the insolvency commencement date, i.e., the cut-off date for calculating the quantum of claim amounts for all types and classes of creditors is August 9, 2017. - I. A. No. 217 of 2018 in Company Petition No. (IB) 77/ALD/2017. - - - Dated:- 10-12-2018 - Bikki Raveendra Babu (Judicial Member) And Ms. Saroj Rajware (Technical Member) For the IDBI Bank/Applicants : Bishwajit Dubey along with Ms. Ruchi Chaudhary , Aditya Marwah and Rahul Agarwal For the Respondents : Anand Grover , Senior Advocate along with Amit Mishra , Shivam Pandey , Samyak Gangwal and Yash Tandon, Sanjay Bhatt along with Ms. Janhvi Bhasin ORDER BIKKI RAVEENDRA BABU (JUDICIAL MEMBER). - 1. Eight financial creditors who are the members of CoC filed this application under section 60(5) of the Insolvency and Bankruptcy Code, 2016 to declare that August ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BC, 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 pro visions which are conceived in public interest and to facilitate good corporate governance. The court should not take upon itself the bur den of supervising the intricacies of the resolution process. Accepting the suggestion of Mr. Nariman (and one of the two options proposed by Mr. Tripathi) of the court appointing a committee to supervise the resolution process outside the IBC will involve the court in an insuperable burden of evaluating intricate matters of financial expertise on which Parliament has legislated to create specific mechanisms. We are emphatically of the view that it would not be appropriate for the court to appoint a committee to oversee the CIRP and assume the task of supervising the work of the committee. We must particularly be careful not to supplant the mechanisms which have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 the date of the order of the Adjudicating Authority. 6. It is pointed out by the applicants that a proviso was added to the definition of insolvency commencement date which reads as follows : Provided that where the interim resolution professional is not appointed in the order admitting application under section 7, 9 or 10 the insolvency commencement date shall be the date on which such interim resolution professional is appointed by the Adjudicating Authority. 7. It is contended by learned counsel appearing for the applicants that the IBC do not envisage the insolvency commencement date occurring prior to the appointment of the IRP. It is argued that the hon'ble Supreme Court of India made it clear that the proceedings are to be recommenced from the stage of appointment of the IRP , and therefore the insolvency commencement date that is the cut-off date for verifying the quantum of claims is August 9, 2018 but not August 9, 2017. 8. It is further stated that the representation made by the applicants before the RP on the above said lines has not been considered by the IRP. The following is the letter of the applicants : The order emphasizes that the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a-vis JIL (corporate debtor) cannot be ascertained unless fresh claims are invited from all creditors taken the cut-off date as September 1, 2018 considering the change of circumstances during that period. 12. It is further stated that this Authority vide its order dated August 14, 2018 recognised the fresh CIRP period commencing from August 9, 2018 and accordingly passed a moratorium order effective from August 9, 2018 as per the provision of the IBC. The order dated August 14, 2018 reads as follows : Learned counsel for the IRP has informed that the status about the current insolvency proceedings and as per the direction of the hon'ble Supreme Court in Writ Petition No. 744 of 2017 insolvency proceeding fresh 180 days has been provided for completion of CIRP with effect from August 9, 2018. It is to be clarified that a moratorium order shall be effective till 180th day from the date of August 9, 2018. Learned counsel for the IRP is directed to proceed for the completion of CIRP in the light of direction of hon'ble Supreme Court and keeping in consideration of the provisions of the Code. 13. It is stated that the IRP failed to appreciate that since the CIRP i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as directed recommencement of the resolution process afresh from the stage of appointment of IRP by the order dated August 9, 2017. 19. It is contended by the RP, the stage from which the process has to recommence, is the stage of appointment of IRP by the order dated August 9, 2017 but not August 9, 2018. According to the IRP, the cut-off date for submission of claims as per section 15 of the IBC read with the regulations is the date of commencement of the insolvency resolution process. Therefore, the cut-off date remains as August 9, 2017. 20. The RP stated that this Authority in C. A. No. 26 of 2018 vide its order dated May 16, 2018 declared certain transactions are avoidable transactions that involved mortgage of 858 acres of land of JIL under sections 43, 45 and 66 of the Code. The said order was under challenge before the hon'ble National Company Law Appellate Tribunal. If the date of commencement of insolvency process is taken as August 9, 2018, those avoidable transactions will become infructuous and redundant. The avoidance of transactions falling under sections 43, 45 and 66 of the Code are linked with the date of insolvency commencement and provide for a maximu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) : We, accordingly, issue the following directions : (i) In exercise of the power vested in this court under article 142 of the constitution, we direct that the 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 National Company Law Tribunal 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. (emphasis supplied) 25. It is stated by the applicants that the Chairperson (IRP) clarified that the advances received in last one year have been included in the voting share, however, no interest calculation is done for period after August 9, 2017. It is stated by the applicants that their claims have been calculated as on August 9, 2017 by the IRP, whereas the advances received from the home buyers up to August 9, 2018 are being considered for the purpose of calculating voting shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iplinary proceedings are pending. (5) The term of the interim resolution professional shall continue till the date of appointment of the resolution professional under sec tion 22. 29. The hon'ble Supreme Court of India by exercising power under article 142 passed an order for the limited purpose of recommencing the resolution process afresh from the stage of appointment of the IRP by the order dated August 9, 2017 and resultantly renewed the period which has been prescribed for the completion of resolution process. 30. The hon'ble Supreme Court of India ordered to revive the CIRP and reconstitution of the CoC as per the amended provisions to include the home buyers. The hon'ble Supreme Court of India revived the period prescribed for the statute by another 180 days commencing from the date of the order, i. e., August 9, 2018. 31. Therefore, the hon'ble Supreme Court in Writ Petition (Civil) No. 744 of 2017 clearly held that, the resolution process start afresh from the stage of appointment of the IRP by the order dated August 9, 2017. 32. It is pertinent to mention here that this Authority by its order dated August 9, 2017 admitted C. P. No. (IB) 77/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated August 9, 2017. Therefore, a conjoint reading of section 5, sub-section (12) and section 16 and the order of hon'ble Supreme Court clearly goes to show that the insolvency commencement date in this case, is August 9, 2017. 36. The hon'ble Supreme Court in its order only recommenced the CIRP from the stage of appointment of IRP. The hon'ble Supreme Court of India by its order, directed the period prescribed under section 12(3) to run from the date of its order, i. e., August 9, 2018. 37. This Authority is of the considered view that reviving the period prescribed under the statute by another 180 days commencing from August 9, 2018 cannot be equated with insolvency commencement date. 38. The hon'ble Supreme Court considering the fact that the home buyers are treated as the financial creditors and they have to be included in the CoC and the entire process has to be undertaken, exercising its powers under article 142, extended the statutory period of 180 days from August 9, 2018. Therefore, taking that aspect of the order of the hon'ble Supreme Court into consideration, it cannot be said that the insolvency commencement date itself is August 9, 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of land of JIL under sections 43, 45 and 66 of the Code. The said order of this Authority is pending adjudication before the hon'ble National Company Law Appellate Tribunal. The insolvency commencement date has got a relevance in deciding whether the particular transactions is avoidable transactions or not under sections 43 and 45 of the I and B Code. 45. In the case on hand, if the insolvency commencement date is taken as August 9, 2018 there is a possibility of certain transactions not falling under sections 43 and 45 of the Code. 46. The IRP acting under regulations 13 and 14 of the CIRP Regulations, can estimate the amount of the claim from time to time based on the information available with him and revise the amount of the claims verified including the estimates of the claims made under sub-regulation (1) of regulation 14. 47. In view of the above discussion, this Authority is of the considered view that the insolvency commencement date, i.e., the cut-off date for calculating the quantum of claim amounts for all types and classes of creditors is August 9, 2017. 48. The application (I. A. No. 217 of 2018) is disposed of accordingly. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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