TMI Blog2021 (6) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... arising out of any litigation, the nation itself is confronted with a pandemic and in the circumstances the applicability of timelines which had been fixed under Regulation 40A for the completion of the CIR Process by IBBI, the Regulation itself had chosen to exclude from CIR Process the timelines in the wake of COVID-19 under Regulation 40C - it is seen that the outer limit of 330 days has not been completed (i.e.,) at the time when this Application had been moved before this Tribunal. It is also required to be seen that even as per the submission of the Ld. Senior Counsel for the Applicant, the nation is facing an extraordinary situation due to COVID-19 pandemic and a sporadic lockdown is being imposed by the Central Government as well as the State Government which in effect cripples the functioning of RP during the CIRP in a seamless manner. In relation to the claim of the Applicant that because of the overshooting of the timeline and in the circumstances as to whether the CIR Process would become a nullity and that the CIRP is required to be suspended, the Hon'ble NCLAT in the matter of Committee of Creditors of Rosewood Trexim Pvt. Ltd. Through Resolution Professional i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted. 3. Further, R1 herein was appointed as Interim Resolution Professional (IRP) of R3 Company by this Tribunal vide the said Order dated 19.02.2020. At the threshold stage itself, it is required to note that in an Appeal which has been filed in Company Appeal (AT) (INS) No. 328 of 2020 before the Hon'ble NCLAT, the Hon'ble NCLAT had chosen to pass an Order dated 25.02.2020. A perusal of the said Order shows that no stay of the Order passed by this Tribunal on 19.02.2020 has been granted by the Hon'ble NCLAT. On the other hand, the Appellant promoters of R3 had been directed to hand over the assets and records of R3 Corporate Debtor to the IRP to immediately hand over the same if not already done and the IRP has been directed to ensure that the Company is kept as a going concern. 4. The statement of the Appellant therein who is the Applicant herein has also been recorded in relation to the efforts being made to settle with State Bank of India, the Financial Creditor at whose instance, based on a Petition filed as stated above the CIRP of the Corporate Debtor was initiated. On the date of hearing of this matter on 10.02.2021, the Applicant's Counsel brought t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd process a nullity and as to whether R1 in the absence of leave or permission from this Tribunal can carry on the activities contrary to the timeline stipulated under the Code/Regulation. Further question of law raised is as to whether the benefit of insertion of Regulation 40C to the Insolvency and Bankruptcy Board of India (Insolvency Resolution for Corporate Persons) Regulations, 2016 would be available to R3 Company and also cover the proceedings that are pending against R3 Company before this Tribunal. In the circumstances, whether the CIRP which was initiated vide Order dated 19.02.2020 by this Tribunal is required to be suspended. 8. A Counter Affidavit has also been filed by R1 in response to the Application filed by the Applicant. On the part of R2 Bank, the notes of submissions have been circulated which is sought to be relied. Relying upon the statements made in the Counter, Ld. Counsel for Respondent No. 1 submits that the stand of the Applicant is paradoxical, in as much as on the one hand the Applicant raises the contention in view of insertion of Section 10A of the IBC, 2016 the CIR Process is required to be suspended. However on the other hand, it is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand only stops filing of Application for initiation of fresh CIRP of the Corporate Debtor that too for a period of six months. It is also stated that the Corporate Debtor has to undergo CIRP only because of events that happened prior to the pandemic and that the pandemic cannot improve the case of the Petitioner/Applicant in any manner. 13. In relation to the expiry of timelines of the CIRP on 16.08.2020 it is stated by R2 in its submission that the RP has taken out an application seeking for extension of CIRP before this Tribunal. 14. In relation to the proposal pending before R2 for settlement as projected by the Applicant, it is stated that no such proposal is pending. 15. It is also brought to the notice of this Tribunal by R2 through its submission that in relation to the allegation made by the Applicant that the RP is not adhering to Regulation 40A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution for Corporate Persons) Regulations, 2016 a statement is made to the effect that R2 vouchsafes the conduct of the CIRP by R1. It is also contended by R2 that the allegation in the Application had been made only in-effect a counter blast to the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that ordinarily the time taken in relation to the corporate resolution process of the corporate debtor must be completed within the outer limit of 330 days from the insolvency commencement date, including extensions and the time taken in legal proceedings. However, on the facts of a given case, if it can be shown to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days, and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation and that the time taken in legal proceedings is largely due to factors owing to which the fault cannot be ascribed to the litigants before the Adjudicating Authority and/or Appellate Tribunal, the delay or a large part thereof being attributable to the tardy process of the Adjudicating Authority and/or the Appellate Tribunal itself, it may be open in such cases for the Adjudicating Authority and/or Appellate Tribunal to extend time beyond 330 days. Likewise, even under the newly added proviso to Section 12, if by reason of all the aforesaid factors the grac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 10A of IBC, 2016 it has been expressly clarified that the provisions of Section 10A shall not apply to any default committed under Sections 7, 9 and 10 of IBC, 2016 before 25th March, 2020. 20. As already stated in the earlier portion of the Order in relation to Section 12 of IBC, 2016 wherein it was enacted that the CIRP should be completed within a period of 330 days mandatorily, the Hon'ble Supreme Court has held the same to be in effect directory. In the circumstances, any Regulation framed by virtue of the provisions of Section 12 of IBC, 2016 by the Insolvency and Bankruptcy Board of India can also be only a guideline and cannot be considered as a mandatory timeline as sought to be given colour of by the Applicant in the instant Application. 21. Under the directions of this Tribunal, R1 has filed a Memo of Dates and Events with Explanation as to the activity as between the CIRP till now of the Corporate Debtor, viz., R3. From the tabulation filed in this regard, it is evident that immediately after the commencement of CIRP dated 19.02.2020, paper publications had been effected on 27.02.2020 and the 1st CoC meeting was held on 21.03.2020 after constituting t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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