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TMI Blog2021 (1) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... 66 of I&B Code, 2016. IV. Approve the eligibility of Resolution Applicant [Celestial Garden Owners Association] and participation of Resolution Applicant in voting of Resolution Plan. 2. The brief facts are thus: - The application for Corporate Insolvency Resolution Process filed as TIBA/19/KOB/2019 by Federal Bank Ltd (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code read with Rule 4 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016 was admitted by this Tribunal on 19.11.2019. 3. It is stated in the application that the National Company Law Appellate Tribunal [NCLAT] vide order dated 22.01.2020 vacated the stay order granted by the NCLAT. After vacating of stay order the IRP on 03.02.2020 made public announcement in two Newspapers. Claims have been received and notice of meeting was issued to the claimants for conducting the first meeting of CoC on 09.03.2020. 4. It is further stated that on 29.03.2020 Government of India notified National Lockdown throughout the country and only 57 days of the CIR Process was completed from the effective date after vacating the stay. Hence, the CIR Process came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this regard this Tribunal gone through Section 12 of I&B Code 2016 which is reproduced as under: "Section 12: Time-limit for completion of insolvency resolution process. 12. (1) Subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of one hundred and eighty days from the date of admission of the application to initiate such process. (2) The resolution professional shall file an application to the Adjudicating Authority to extend the period of the corporate insolvency resolution process beyond one hundred and eighty days, if instructed to do so by a resolution passed at a meeting of the committee of creditors by a vote of 1[sixty-six] per cent of the voting shares. (3) On receipt of an application under sub-section (2), if the Adjudicating Authority is satisfied that the subject matter of the case is such that corporate insolvency resolution process cannot be completed within one hundred and eighty days, it may by order extend the duration of such process beyond one hundred and eighty days by such further period as it thinks fit, but not exceeding ninety days: Provided that any e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided in the Second COC meeting Mr Sreenivasan is appointed as auditor and he has started the assignment. None of the directors, regular staff is available in the company to coordinate with theCIRP.RP has to issue IM within 5 days of confirmation of Prospective Resolution applicant. Available Information for IM is only very limited and IM is available with limited data Auditor has given the Audit report for the period 2013-14 and 2014-15 on 07/12/20. and he is finding difficult to collect data for further periods Expect for the bank statements. RP has sought the data for the period from 2015 from the company and has not received any response. RP has inspected the premise were the Books and records of the company are stored and could not find out the records for the period from 2016 from which the company stopped operation. Auditor has informed that accounts are recorded only for the period up to 29/01/2015." 11. Committee of Creditors of the Corporate Debtor with 100% voting share resolved to finalize the accounts with the available records at the earliest. 12. In the 6th CoC meeting the Resolution Professional placed the 'Verification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrower explaining the reasons as to why measures may or may not be taken under sub-section (4) of Section 13 in case of non-compliance with notice within 60 days. The creditor must apply its mind to the objections raised in reply to such notice and an internal mechanism must be particularly evolved to consider such objections raised in the reply to the notice. There may be some meaningful consideration of the objections raised rather than to ritually reject them and proceed to take drastic measures under sub-section (4) of Section 13 of the Act. Once such a duty is envisaged on the part of the creditor it would only be conducive to the principles of fairness on the part of the banks and financial institutions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edge which would be a step forward towards his right to know as to why his objections have not been accepted by the secured creditor who intends to resort to harsh steps of taking over the management/business of viz. secured assets without intervention of the court. Such a person in respect of whom steps under Section 13(4) of the Act are likely to be taken cannot be denied the right to know the reasons of no acceptance and of his objections. It is true, as per the provisions under the Act, he may not be entitled to challenge the reasons communicated or the likely action of the secured creditor at that point of time unless his right to approach the Debts Recovery Tribunal as provided under Section 17 of the Act matures on any measure having been taken under subsection (4) of Section 13 of the Act." &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is also a financial creditor." 16. The proviso to the aforesaid Section mandates that Resolution Applicant does not have the voting right at the CoC while considering the Resolution Plan. The Resolution Applicant herein is the Home Buyers (52 Numbers) who are Financial Creditors with 3.91% voting rights in the CoC formed an association called 'Celestial Garden Owners Association'. 17. In view of the above, and based on the prayers made by the Resolution Professional, this Tribunal dispose of IA/225/KOB/2020 and pass the following order: - ORDER i. This Tribunal extend the period of CIR Process for a further period of 90 days from 11.12.2020 with a direction to the Resolution Professional to meticulously adhere to the Rules and Regulations issued by IBBI in this regard from time to time. ii. The Resolution Professional is directed to submit an affidavit of the Auditor Mr. Sreenivasan stating that the accounts of the Corporate Debtor are only recorded for a period of up to 29.01.2015 except for the Bank Statements. The Resolution Professional is at liberty to audit the remaining period accounts through an authorised Chartered Accountant. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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