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TMI Blog2018 (12) TMI 1821X X X X Extracts X X X X X X X X Extracts X X X X ..... f this application, respondents Nos. 2 to 10 (herein home buyers associations) filed C. A. No. 263 of 2018 to implead them as parties and the said application is allowed by this Authority on November 2, 2018. 3. IDBI Bank Ltd. (applicant No. 1 herein) filed C. P. No. (IB)77/ALD/2017 with a request to the trigger corporate insolvency resolution process (CIRP) in respect of Jaypee Infratech Ltd. (JIL). The said petition was admitted by this court on August 9, 2017 for the purpose of commencement of the CIRP in respect of JIL. 4. The home buyers filed Writ Petition (Civil) No. 744 of 2017 before the hon'ble Supreme Court of India in the case of Chitra Sharma v. Union of India [2018] 210 Comp Cas 609 (SC) under article 32 of the Constitution of India. The hon'ble Supreme Court of India in its final order dated August 9, 2018 in the case of Chitra Sharma v. Union of India [2018] 210 Comp Cas 609 (SC), directed, inter alia, recommencement of the CIRP of the JIL from the date of its order. The relevant paragraphs of the said order are reproduced hereinbelow (page 642) : "Having regard to the material change which has been brought about by the amendment of the IBC by the Ordina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at the present stage for the limited purpose of recommencing the resolution process afresh from the stage of appointment of IRP by the order dated August 9, 2017 and resultantly renew the period which has been prescribed for the completion of the resolution process. We have furnished above, the reasons for doing so. Chief amongst them is the fact that in the present case the period of 270 days expired before the Ordinance conferring a statutory status on home buyers as financial creditors came into existence. In the circumstances, it would be necessary to revive the period prescribed by the statute by another 180 days commencing from the date of this order. During this period, the IRP shall follow the provisions of the IBC afresh in all respects. A new CoC should be constituted in accordance with the amended provisions of the IBC to enforce the statutory status of the allottees as financial creditors. We also clarify that apart from the three bidders whose bids were found to be eligible by the IRP, it would be open to the IRP to invite fresh bids to facilitate a wider filed of choice before the CoC. In that process, the offers made by the interveners in this proceedings can also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 as if the date of the order was the order of the Adjudicating Authority under section 7(5) of the IBC. Accordingly, the claims need to be invited from all the creditors for debt due to them as of the date and CoC has to be constituted accordingly." (emphasis supplied) 9. The RP gave reply dated August 30, 2018 considering the cut-off date as August 9, 2017. The reply of the respondent is as follows : "The cut-off date for submission of claims as per section 15 of the IBC read with regulations is the date of commencement of insolvency resolution process. Therefore, the cut-off date for submission of claims in this case remains August 9, 2017. The hon'ble Supreme Court has not changed the commencement date and the cut-off date, which is prescribed by substantive provisions in the IBC, to August 9, 2018. A copy of the reply dated August 30, 2018 has been annexed and marked as annexure D." 10. Learned counsel appearing for the applicants contended that the RP failed to appreciate the order of the hon'ble Supreme Court of India in proper prospective. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of claims should also stand revised to the date of order as per the provisions of the IBC. 14. It is stated by the applicants that unless this application is allowed, the applicants would not be able to file a fresh claim before the IRP. It is also stated that allowing this application does not in any manner cause any prejudice to the right of any of the parties. It is also stated that, if the application is not allowed, it would cause serious losses to the applicants, who are public sector banks holding public money. 15. The IRP filed reply stating that the reliefs prayed in the application are based on the applicants interpretation and clarification of the order dated August 9, 2018 passed by the hon'ble Supreme Court of India in Writ Petition (Civil) No. 744 of 2017 and therefore the applicants should approach the hon'ble Supreme Court of India for clarification of the order. 16. It is further stated by the IRP that the hon'ble Supreme Court of India in its order did not change the date of commencement of insolvency resolution process of the JIL from August 9, 2017 to August 9, 2018. It is further stated by the IRP that the hon'ble Supreme Court of India exerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g heavy financial loss to other financial creditors and stakeholders of JIL. The hon'ble Supreme Court of India in its order dated August 9, 2018 has held that the avoidance order passed by this authority as one of the grounds for disqualification of the promoters of the corporate debtor under section 29A of the Code. 22. The home buyers associations, who are the interveners also filed the reply stating the insolvency commencement date can only be the date when the petition is admitted and the IRP is appointed. It is further stated that in corollary, the commencement date can only change, if the section 7 application filed by the lenders were to be declared infructuous and a new application under section 7 was to be filed against the corporate debtor, leading to a fresh appointment of the IRP. It is stated that nothing of that sorts, was done by the hon'ble Supreme Court in this case. 23. It is stated that in the case on hand, the IRP was appointed on August 9, 2017 thus making it the insolvency commencement date for the purpose of present CIRP. It is contended that the plea of the financial creditors that there is a material change between August 9, 2017 and August 9, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows : "5. (12) 'insolvency commencement date' means the date of admission of an application for initiating corporate insolvency resolution process by the Adjudicating Authority under section 7, 9 or section 10, as the case may be : 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 ;" 28. Section 16 of the Insolvency and Bankruptcy Code, 2016 deals with appointment and tenure of IRP, which reads as under : "16. Appointment and tenure of interim resolution professional.- (1) The Adjudicating Authority shall appoint an interim resolution professional within fourteen days from the insolvency commencement date. (2) Where the application for corporate insolvency resolution pro cess is made by a financial creditor or the corporate debtor, as the case may be, the resolution professional, as proposed respectively in the application under section 7 or section 10, shall be appointed as the interim resolution professional, if no disciplinary proceedings are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . e., August 9, 2017. In this context, it is necessary to refer to the definition of insolvency commencement date under section 5, sub-section (12) of the Code. Section 5, sub-section (12) clearly says that the insolvency commencement date means the date of admission of application for initiating the CIRP by the Adjudicating Authority under section 7, 9 or 10 as the case may be. The proviso to section 12 applies only, whereas the Adjudicating Authority did not choose to appoint the IRP in the order admitting application under section 7, 9 or 10. 33. In section 7, 9 or 10 it is not enjoined upon the Adjudicating Authority to appoint the IRP simultaneously with the admission of the application or on the same date, on which the admission order was passed. 34. Section 16 of the I and B Code says that the Adjudicating Authority shall appoint the IRP within 14 days from the insolvency commencement date, that means 14 days time is given to the Adjudicating Authority to appoint IRP even from the insolvency commencement date. This is a time space given to the Adjudicating Authority to appoint the IRP depending upon the facts and circumstances of the case. In a given case, if the Adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement date given in section 5, sub-section (12) of the Code. The hon'ble Supreme Court did not even interpret that the insolvency commencement date in this case is from August 9, 2018. The hon'ble Supreme Court only dealt with the revival of the CIRP and renew the period of 180 days prescribed under section 12(3) of the Code. 40. Coming to the factual aspects of the case, the contention of the bankers/ financial institutions that they are not being paid interest from August 9, 2017 to August 9, 2018 equally applies to the home buyers, deposit holders and other classes of creditors also. 41. The IRP is not at all prevented from taking claims. But the claim amounts should be calculated 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. 42. Therefore, when the cut-off date is taken on August 9, 2017 it applies equally to all classes of creditors for the purpose of calculating the interest. Interest would be calculated only till the date of cut-of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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