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TMI Blog2024 (5) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... tice Sharad Kumar Sharma , Member ( Judicial ) : These are four Company Appeals Viz. Comp. App (AT) (CH) (INS) No.192 / 2023, Comp. App (AT) (CH) (INS) No.214 / 2023, Comp. App (AT) (CH) (INS) No.215 / 2023 & Comp. App (AT) (CH) (INS) No.212 / 2023, which have been respectively preferred by the Appellants, being aggrieved, against the respective Judgments, passed by the `Adjudicating Authority', thereby rejecting their Application, as preferred under Section 12 of I & B Code, 2016, for extension of time for the purposes of completion of the Insolvency Resolution Process. 2. As the facts in each of the cases are identical, for the purpose of brevity all the Appeals are being taken up together, in order to aptly deal with the facts as respectively argued by the respective Counsels for the Parties, it becomes inevitable for the `Tribunal' to deal with the facts of each Company Appeals independently and precisely. Comp. App (AT) (CH) (INS) No. 192 / 2023: 3. As far as the Comp. App (AT) (CH) (INS) No. 192 / 2023 of Sharon Hills Residents Association v. K. Parameswaran Nair, Resolution Professional is concerned, the challenge given by the Appellant herein is to the Impugned Order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al assistance drawn by the Corporate Debtor, he had pledged and created a Collateral Security for the said Loan transaction qua the sold apartments already sold to Home Buyers without their knowledge. The Home Buyers observed that there was a flaw in extension of the financial assistance by the Financial Creditors for the reason, the same was without properly verifying the credentials of the Corporate Debtor and the Sureties which has been extended by the Corporate Debtor, for the purposes of availing the Loan facility. 11. The Corporate Debtor ultimately had defaulted in remittance of his Loan liability towards the Financial Creditors, and as a result thereto, one among the Creditors of the Corporate Debtor, had initiated a Corporate Insolvency Resolution Proceedings, by initiating a CP(IBC)/05/KOB/2021, before the Adjudicating Authority of the NCLT, Kochi Bench. As a result, there to, the Adjudicating Authority, has passed an Order, under Section 14 of the I & B Code, 2016, on 03.11.2021, for imposing a Moratorium. 12. As a result of admission of the Corporate Debtor in the process of the CIRP Proceedings, the Corporate Debtor, the Resolution Professional, the Respondent herein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lans under Section 30(6) & 31 of the I & B Code, 2016, after the approval of the Committee of Creditors, before the Adjudicating Authority of the NCLT, Kochi Bench on 25.04.2023, the Resolution Plans, were not approved and rather they stood rejected, because of the fact that there was a constraint of time, which had lapsed as contemplated under Section 12 of the Act, thus the Appellant Association, had to file an Application, under Section 60(5) of the I & B Code, 2016, before the NCLT, Kochi Bench, praying for extension of time, to complete the Insolvency Process. 18. It is contended that the Adjudicating Authority without considering the Resolution Plan, the Petitions for extension of time filed by the Appellant, was rejected by Impugned Order dated 26.04.2023, and had consequently ordered for Liquidation of the Corporate Debtor by the Impugned Order and consequently, had also declined to extend the time period as sought for by the Appellant. Comp. App (AT) (CH) (INS) No. 214 / 2023 : 19. In the Comp. App (AT) (CH) (INS) No. 214 / 2023, the Society of the Home Buyers of Angelwoods Apartments Allottees Association, had come forward in this Appeal, thereby putting a challenge t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Appellant herein that as a consequence of the invitation of the Expression of Interest, the Appellant had submitted their Expression of Interest, before the Committee of Creditors and the Provisional List of Prospective Resolution Plan Application, they have submitted a Resolution Plan, as per Section 30 of the I & B Code, 2016. 25. It is contended by the Appellant that the Resolution Professional inspite of adherence of strict time limit, prescribed under the `Code', had unfortunately was not able to conclude the Insolvency Proceedings to a concrete decision on account of the fact that even at the stage of 11th CoC Meeting itself a cumulative adjournments were sought which had obstructed the culmination of the proceedings of the `CIRP'. 26. In the instant case too, by an Order of 26.04.2023, the Adjudicating Authority, by the Impugned Order dated 26.04.2023, declined to grant an extension of time, as contemplated under Section 12, read with Section 60(5) of the I & B Code, 2016. Consequently, the Appeal under Section 61 of the I & B Code, 2016. Comp. App (AT) (CH) (INS) No. 212 / 2023: 27. Comp. App (AT) (CH) (INS) No. 212 / 2023, has been preferred by the Appellants, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Appeal, we may not be required to venture into the merits of the matter for the reasons being that invariably, in all the Appeals as precisely dealt with above. In all the Appeals, its IA (IBC) / 157 / KOB / 2023, which has been the subject matter of consideration, except where the Application filed by the Resolution Professional for extension of time for 90 days for different Association of Home Buyers, was being considered as prayed for in the said Applications from 17.04.2023 to 15.07.2023, in order to enable to complete the Resolution Process, which was declined to be extended and the reason for denial to extend the time period by the Adjudicating Authority, in all the cases almost happens to be similar. 31. It is argued by the Learned Counsel for the Appellant, that the period of 139 days since it automatically stood excluded from the Resolution period by an Order dated 01.07.2022. The same may not be included, for the purposes of determining as to the upper time period, prescribed under Section 12 of the I & B Code, 2016, for the purpose of completion of the Insolvency Resolution Process. But, however, later on, and invariably in all the cases, 90 days was extended and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ode, 2016, for conclusion of the Insolvency Resolution Proceedings could not be adhered too, major time was wasted in the Proceedings which was held by the Financial Creditors. 35. The Resolution Professional had submitted that in compliance with the report filed by him, the Home Buyers have submitted their Resolution Plan, which were put for voting before the Committee of Creditors, on 16.04.2023 and the Plans thus respectively submitted were approved. 36. But, primarily for the purposes of facilitating the filing of an Application for seeking an extension of time to conclude the Insolvency Process, the Resolution Professional had submitted that they had filed the approved Resolution Plans, under Section 30(6) & 31, before the Committee of Creditors, but, the delay has occurred, because of the procedural flaw at the hands of the Financial Creditors and because of other procedural formalities which were required to be fulfilled. Consequent to which, the Resolution Professional on 15.04.2023, has moved an Application being IA (IBC) / 157 / KOB / 2023 (common in all the Appeals), wherein he has invoked Rule 11 of the NCLAT Rules, for seeking an extension of CIRP Process by further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, but, inspite of the same being filed a perverse finding has been recorded by the Adjudicating Authority that till date, no single plan has been received from the Prospective Home Buyers. 39. A stray observation has been made that Home Owner's Application was made that they may be de-linked from the lands of the `CIRP' and the land owners alleged that the Home Buyers who had submitted the Plans or submitting the Plans, may be considered independently. 40. In an overall facts and consideration of the case, the two questions come for consideration is, which would be as to whether; A). The application for the extension of time period for the completion of the Insolvency and Resolution Process, could be extended beyond 330 days which is the statutory upper limit prescribed, despite of the extensions, which has already having being granted as observed in Para 3 of the Impugned Judgment as dealt with above. B) Secondly, as to whether, the Resolution Plans have been submitted by the Home Buyers and whether the same has been approved, by the Committee of Creditors. 41. The Counsel for the Appellants had consistently taken a stand, during the course of the argument that the Compli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime period. It was observed that the time might have been extended earlier. But, still the Adjudicating Authority, can consider the facts of the case and particularly keeping the interest of the Claimants in mind, it can grant a short extension for the purposes of completion of Insolvency Process even beyond the period of 330 days, particularly the vital principles which Courts / Tribunals, have to bear in mind is that it was the interest of the Stakeholders which was the paramount factor and not that of the Corporate Debtor, because denial of extension of time period at times it may result into putting back the Claimants at a backfoot, instead of proceeding for Liquidation, the time taken in legal proceedings, due to various unforeseen factors often leads to delays, that has to be considered and it cannot be ascribed to be shouldered by the Litigants, before the Adjudicating Authority. 46. Furthermore, in order to avoid any arduous litigation process, the Adjudicating Authority could extend the time period, even beyond 330 days under the added proviso to Section 12, by reasons after considering the entire factors in each cases, by granting a grace of extension, particularly looki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Insolvency Resolution Process could be granted and the principle logic which was assigned by the Principal Bench of the NCLAT, it was that in case, if the Corporate Debtor, is put to Liquidation, by not considering the Resolution Plan of the Stakeholders, the most sufferers, would be the Home Buyers. 48. By relying upon the Judgment of Essar Steel India mentioned Supra as well as the Judgment of the Flat Buyers Association Winter Hills - 77, Gurgaon v. Umang Realtech Pvt. Ltd., through IRP & Ors., as decided by the NCLAT in Comp. App (AT) (INS) No. 926 / 2019, held as under: 11. " The learned Counsel appearing for Resolution Professional candidly submitted that the Resolution Professional is not opposing the present Appeal and would govern itself by any orders passed by this Tribunal. The Resolution Professional has also relied on Committee of Creditors' decision dated 8th September, 2021 and has stated that with regard to eight Projects as noted in the decision of CoC, 25 Expression of Interests have been received. It is further submitted that minimum number of 70 days are required to run the process. 14. The object of the IB Code is the resolution of the insolvency of a C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this declaration 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 afores ..... X X X X Extracts X X X X X X X X Extracts X X X X
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