Insolvency and Bankruptcy Code, 2016: s. 7 – Corporate Insolvency Resolution Process – Power of the NCLT or NCLAT to exclude any period for purpose of counting 270 days Corporate Resolution Process period – Power to invite fresh resolution plans after expiry of statutory period for completion of CIRP – On facts, Bank filing application u/s. 7 of the Code against appellant company before NCLT as the company had turned NPA (Non-Performing Asset) – During pendency, writ petition by home buyers concerning the stated project – Meanwhile issuance of public notice by Interim Resolution Professional inviting claims from all the stake holders of the appellant company including home buyers – Thereafter, application by home buyers before NCLT seeking clarification as to manner in which voting percentage of allottes to be reckoned – Bank filing another application before NCLT for excluding the period of pendency of the application for clarification regarding the manner of counting votes of the financial creditors from the period of 270 days of CIRP – Issuance of direction by NCLT to proceed further with CIRP despite pending clarificatory motions including the aforesaid application – NCLAT allowed exclusion of
90 days for the purpose of counting the period of 270 days of CIRP – On appeal, held: In view of the recent legislative changes, the scope of resolution plan stands expanded which may now include provision for restructuring the corporate debtor including by way of merger, amalgamation and demerger and more so the power bestowed on the Committee of Creditors-CoC to consider not only the feasibility and viability of the resolution plan but also the manner of distribution proposed, which may take into account the order of priority amongst the creditors – In the instant case, finally only two bidders had participated and submitted their resolution plan which was placed before the CoC and stated to have been rejected – However, applying the principle underlying Regulation 36B(7), it is deemed appropriate to permit the IRP to reissue request for resolution plans to the two bidders (Suraksha Realty and NBCC) and/or to call upon them to submit revised resolution plan(s), which can be then placed before the CoC for its due consideration – In view of the legislative changes, this Court needs to and must exercise the plenary powers to make an attempt to revive the corporate debtor, lest it is exposed to liquidation process under the Code – There is inclination to do so because the project has been implemented in part and out of over 20,000 home buyers, a substantial number of them have been put in possession and the remaining work is in progress and in some cases at an advanced stage of completion – Thus, to do substantial and complete justice to the parties and in the interest of all stakeholders of the appellant company, IRP directed to complete CIRP within 90 days from the date of this order – In the first 45 days, IRP would invite revised resolution plan only from the final bidders, and in second phase of 45 days, margin is provided for removing any difficulty and to pass appropriate orders – Constitution of India – Art 142.
Chitra Sharma & Ors. v. Union of India & Ors. (2018)
9 SCALE 490 – relied on.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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