Nice Project Limited Through Irp Mr. ... vs Committee Of Creditors In M/S Nice ...
- CitationComp. App. (AT) (Ins.) No. 463 of 2021
Ratio decidendi
The rule this decision rests on
Where the Adjudicating Authority has, in the course of an insolvency commencement order, appointed an IRP other than the one proposed, and that substitution is effected by a later order, the IRP is treated as having been appointed only on the date of the substituting order, and the period between the original appointment and the substitution, together with the time taken to communicate the appointment to the IRP, is to be excluded from the CIRP timeline. Following the amendment to Section 16(1) of the Code, which requires the Adjudicating Authority to appoint an interim resolution professional on the insolvency commencement date, there cannot be two dates for the appointment of an IRP, and the appointment must coincide with the insolvency commencement date.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Anil Tayal ....Appellant Interim Resolution Professional for M/s. Nice Projects Ltd.
Vs.
Committee of Creditors of M/s. Nice Projects Ltd. ...Respondent
For Appellant: Mr. Abhishek Anand, Mr. Kunal Godhwani, Advocates
For Respondent: Mr. Sumant Batra, Ld. Amicus Curiae Mr. Apoorva Chowdhury, Advocate
ORDER
(Virtual Mode) 11.01.2022: Heard Learned Counsel for the Appellant-Mr. Abhishek
Anand and Mr. Sumant Batra-Learned Amicus Curiae.
2. This Appeal has been filed against the Judgment and order dated 17th
March, 2021 in IA/1304/2021 in IB 3042(ND) 2019 passed by Adjudicating
Authority (National Company Law Tribunal, New Delhi, Court-II) by which
Order the Application filed by the Appellant being I.A. No. 1304 of 2021
praying for exclusion of 17 days time from the CIRP was rejected.
3. Learned Counsel for the Appellant submits that in the present case by
Order dated 12th February, 2021 passed in CP IB No. 3042/ND/2019 the
Corporate Insolvency Resolution Process (CIRP in short) was initiated and in
Paragraph 22, it was stated by the Adjudicating Authority that since
Applicant has not proposed the name of Interim Resolution Professional, we 2
appoint Ms. Sunita Umesh as IRP. After the said order, an Application was
filed by the Applicant being I.A. No. 943/2021 seeking modification of the
Order dated 12th February, 2021 and it was stated in the application that
although in the initial petition no IRP was proposed but after the Order was
reserved on 04th January, 2021 an application was filed on 31.01.2021
proposing the name of IRP. The application was heard on 18.01.2021. The
name of IRP-Mr. Anil Tayal was prayed in the Application be substituted in
the Order dated 12th February, 2021. The Application was allowed by the
Adjudicating Authority on 24th February, 2021 by appointing MR. Anil Tayal
as IRP in place of Ms. Sunita Umesh who was earlier appointed on 12th
February, 2021.The IRP thus, in the present case, due to facts and
circumstances, stated above shall be treated to have been appointed only on
24th February, 2021. This information was received by IRP on 1st March,
2021. Hence, the exclusion of period from 12th February, 2021 to 28th
February, 2021 was sought for.
4. We are of the view that there were substantial grounds for granting
exclusion, when the IRP who was proposed by the applicant, was appointed
on 24th February, 2021 and the information was received by Mr. Anil Tayal
on 1st March, 2021, the period from 12th February, 2021 to 28th February,
2021 ought to have been excluded. The Adjudicating Authority committed an
error in rejecting the Application.
5. We are thus of the view that Order of the Adjudicating Authority
rejecting the Application deserves to be set aside and the I.A. No. 1304 of
2021 deserves to be allowed.
Comp. App. (AT) (Ins.) No. 463 of 2021 3
6. Before closing we notice the Order passed by this Tribunal on
09.07.2021 appointing Mr. Sumant Batra as Amicus Curiae as under:
"...........
We request Advocate Shri Sumant Batra to assist us as Amicus Curiae. The Appellant will serve copy of Appeal to Learned Amicus Curiae. The Counsel for the Appellant will prepare a chart showing as to what practical difficulties IRP has to face if there is mismatch in the date of appointment of IRP no coinciding with the date of initiation of CIRP. The Counsel for the Appellant will share the same with the Learned Amicus Curiae."
7. We have heard Mr. Sumant Batra. Mr. Sumant Batra, Amicus Curiae
submits that in view of the Amendment which has been made now in Section
16 of the Code by Act No. 1 of 2020 the inconsistency which appeared with
regard to appointment of IRP and the date of the Order has no more
continuing. In the earlier Section 16 sub-Section 1 the words "within 14 days
from the Insolvency Commencement Date" has now been substituted by
following:-
"16(1).The Adjudicating Authority shall appoint an interim resolution professional on the insolvency commencement date".
In view of the above amendment which has been enforced with effect
from 28th December, 2019 now there cannot be two date for appointment of
IRP. The IRP has to be appointed on the date of Insolvency Commencement
Date.
8. Thus, we see no reason to dwell any further in the matter. In view of
the aforesaid observations, we allow this Appeal and set aside the Order
dated 17.03.2021 of the Adjudicating Authority and allow the Application i.e. Comp. App. (AT) (Ins.) No. 463 of 2021 4
I.A. No. 1304 of 2021 granting exclusion of period from 12th February, 2021
to 28th February, 2021.
[Justice Ashok Bhushan] Chairperson
[Dr. Ashok Kumar Mishra] Member (Technical)
Basant/nn
Comp. App. (AT) (Ins.) No. 463 of 2021
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