Mangesh Heeraji Gorivale vs Akshata Mercantile Pvt Ltd. Through Its ...

Sikkim Ferro Alloys Ltd. ...Appellant

Vs

Akshata Mercantile Pvt. Ltd. through Its Resolution Professional ....Respondent

Present: For Appellant: Mr. Rajeev Ranjan, Sr. Advocate with Mr. Sandeep Bisht and Mr. Rahul Kumar, Advocates. For Respondent: Mr. P. V. Dinesh and Mr. Ashwini Kumar Singh, Adv`cates for RP.

With

Company Appeal (AT) (Insolvency) No. 431 of 2019 IN THE MATTER OF:

Mangesh Heeraji Gorivale ...Appellant

Vs

Akshata Mercantile Pvt. Ltd. through Its Resolution Professional ....Respondent

Present: For Appellant: Mr. Rajeev Ranjan, Sr. Advocate with Mr. Ranjan Kr. Pandey and Mr. Anuj Tiwari, Advocates. For Respondent: Mr. P. V. Dinesh and Mr. Ashwini Kumar Singh, Advocates for RP.

ORDER

10.05.2019: These appeals have been preferred one by the Operational

Creditor - 'Sikkim Ferro Alloys Ltd.' and other by Director of the Corporate

Debtor - 'Mangesh Heeraji Gorivale' against common order dated 27th March,

2018 passed by the Adjudicating Authority (National Company Law Tribunal), -2-

Mumbai Bench whereby on the application filed by the Resolution Professional

only three days' time has been excluded for counting the period of 270 days.

2. Learned senior counsel for the Appellants submits that the Committee of

Creditors by its meeting dated 21st August, 2018 resolved to replace the Interim

Resolution Professional while discussing the question of preparation of

Information Memorandum. The application under Section 22 of the Insolvency

and Bankruptcy Code, 2016 (for short 'I&B Code') was filed before the

Adjudicating Authority on 29th August, 2018 but not decision was taken at once.

It was allowed on 26th October, 2018 and the certified copy was served on

Resolution Professional on 26th November, 2018 who joined on the same date.

It is submitted that because of the aforesaid delay, though the period of

Corporate Insolvency Resolution Process was extended on 17th January, 2019

for further 90 days i.e. upto 18th April, 2019, the Information Memorandum

prepared by the subsequent Resolution Professional was approved by the

Committee of Creditors on 22nd February, 2019. The Resolution Professional

invited Expression of Interest for Resolution Plan on 23rd February, 2019 and in

absence of time only one Resolution Plan was received, which was not approved

by the Committee of Creditors. It is informed that another Expression of Interest

was received but because of shortage of time, could not be considered for want

of time as period was not extended. It was in this background, the Resolution

Professional moved application under Section 60(5) for exclusion of certain

Company Appeal (AT) (Insolvency) No. 430 of 2019 and 431 of 2019 -3-

period for counting the statutory period for computation of Corporate Insolvency

Resolution Process period, wherein only three days has been excluded.

3. Learned counsel for the Appellant submits that if the total period is

properly counted, 89 days is the period during which no steps could be taken

because of pending decision of removal of Interim Resolution Professional and

joining of Resolution Professional. These approximately 89 days are to be

excluded.

4. Mr. Ashwini Kumar Singh, learned counsel appearing on behalf of the

Resolution Professional supported the argument of the learned counsel for the

Appellant and submits that if more time is given, resolution plans can be called

for and matter will be place before the Committee of Creditors.

5. Having heard learned counsel for the parties and with a view to ensure

that the resolution process is made successful and not to allow the Corporate

Debtor to be liquidated, we are of the view that the delay which took place during

the pendency of the application for replacement of the Interim Resolution

Professional before the Adjudicating Authority should be excluded for the

purpose of counting 270 days of Corporate Insolvency Resolution Process period.

As the application for replacement of Resolution Professional was filed on 29th

August, 2018 and in the meantime Information Memorandum could not be

Company Appeal (AT) (Insolvency) No. 430 of 2019 and 431 of 2019 -4-

prepared and the subsequent Resolution Professional joined on 26th November,

2018 on receipt of the certified copy of the Order, we allow the prayer and exclude

89 days for the purpose of counting the period of 270 days for Corporate

Insolvency Resolution Process. In the result, the impugned order dated 27th

March, 2019 stands modified to the extent above. The Resolution Professional

and the Committee of Creditors are allowed 89 days to conclude the Corporate

Insolvency Resolution Process, to be counted from the date of receipt of free

certified copy of the present order by learned counsel for the Resolution

Professional. It is for the Committee of Creditors to decide whether further

Information Memorandum should be issued calling for more Resolution plans or

to ask the Resolution Applicant who has already submitted the Expression of

Interest to submit the Resolution Plan. The matter is left open for Committee of

Creditors for its decision and to proceed in accordance with law. Both the

appeals stands disposed of with aforesaid observations and directions. No costs.

[Justice S. J. Mukhopadhaya] Chairperson

[Justice A. I. S. Cheema] Member (Judicial)

(Kanthi Narahari) Member (Technical) am/gc Company Appeal (AT) (Insolvency) No. 430 of 2019 and 431 of 2019