Panna Pragati Infrastructure Pvt Ltd & ... vs Amit Pareek & Ors

(Arising out of Order dated 18th March, 2020 passed by the Adjudicating Authority (National Company Law Tribunal), Guwahati Bench, Guwahati in I.A. No. 27 of 2020in CP (IB) No. 13/GB/2019)

IN THE MATTER OF:

Panna Pragati Infrastructure Pvt. Ltd. & Anr. ....Appellants

Versus

Amit Pareek & Ors. .....Respondents

Company Appeal (AT) (Insolvency) No. 516 of 2020

(Arising out of Order dated 18th May, 2020 passed by the Adjudicating Authority (National Company Law Tribunal), Guwahati Bench, Guwahati in IA in CP (IB)No. 13/GB/2019)

IN THE MATTER OF:

Panna Pragati Infrastructure Pvt. Ltd. & Anr. ....Appellants

Versus

Amit Pareek & Ors. .....Respondents

Present:

For Appellant: Mr. Abhijeet Sinha, Mr. Soumya Dutta, Mr. Aditya Shukla, Advocates.

For Respondent(s): Mr. Rajesh Gautam, Mr. Yashanand, Mr. Sushil Mehtani and Ms. Ridhima Sethi, Advocates. 2

BANSI LAL BHAT, J.

Company Appeal (AT) (Insolvency) No.515 of 2020 arises out of order

dated 18th March, 2020 passed by the Adjudicating Authority (National

Company Law Tribunal), Guwahati Bench, Guwahati in IA No.27 of 2020 in

CP(IB) No.13/GB/2019 by virtue whereof Appellant's Application seeking

direction to Resolution Professional to take on record and consider the revised

offer submitted by e-mail dated 14th February, 2020 has been rejected by the

Adjudicating Authority keeping in view the fact that the Resolution Plan of the

highest bidder has already been approved with 100% voting and the

Application of Appellant suffered from latches and lacked bonafidies.

2. Company Appeal (AT) (Insolvency) No.516 of 2020 arises out of order

dated 18th May, 2020 by virtue whereof the Adjudicating Authority (National

Company Law Tribunal), Guwahati Bench, Guwahati approved the Resolution

Plan of Ngaitlang Dhar (H1 Bidder)/ Respondent No.4/ Successful Resolution

Applicant.

3. The facts relevant for consideration of issues raised in these Appeals

being heard together may briefly be summarized.

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 3

4. Meghalaya Infratech Ltd. (Corporate Debtor)/ Respondent No.1 had to

undergo Corporate Insolvency Resolution Process as a sequel to admission of

an Application under Section 7 of the Insolvency and Bankruptcy Code, 2016

("I&B Code" for short) filed by Allahabad Bank ('Financial Creditor'). Mr. Amit

Pareek came to be appointed as the Interim Resolution Professional (IRP), who

was subsequently confirmed as Resolution Professional at the first Committee

of Creditors meeting held on 25th September, 2019. Public announcement made

by IRP calling for claims from creditors was followed by constitution of

Committee of Creditors. Expression of Interest was invited from prospective

Resolution Applicants. Besides the Appellant and the Successful Resolution

Applicant Mr. Abhishek Agarwal and Mr. Ashish Jaisasaria and others filed

their Expression of Interest, which conformed to the eligibility criteria laid

down in this regard. All the four submitted their Resolution Plans.

Respondent No.4/ Ngaitlang Dhar emerged as H1 Bidder whereas Mr.

Abhishek Agarwal as H2 Bidder. At the 7thCommittee of Creditors meeting held

on 6th March, 2020 the Committee of Creditors, with a 100% voting share, is

said to have approved the Resolution Plan of H1 Bidder, which upon

consideration by the Adjudicating Authority was found to be in conformity with

the provisions of law and complying with the mandatory requirements. Same

came to be approved in terms of impugned order dated 18th May, 2020.

5. It is contended on behalf of Appellants that it had submitted two Plans

during the Corporate Insolvency Resolution Process (CIRP) of the Corporate

Debtor. While the first Plan was placed before Committee of Creditors and

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 4

considered on 11th February, 2020, Appellants were provided opportunity to

place a revised Plan before the Committee of Creditors on 12th February, 2020.

The Appellants requested for 1-2 extra days to submit a revised Resolution

Plan but the request was declined and the Appellants were excluded from CIRP

during the Committee of Creditors meeting on 12th February, 2020 on the sole

ground of paucity of time. It is further submitted that the Appellants

submitted a 2nd Plan (revised Plan) on 14th February, 2020, which was

unilaterally rejected by the Resolution Professional and never placed before the

Committee of Creditors though it was submitted only two days after the

submission of revised Plan of Successful Resolution Applicant and that too well

within the 180 day CIRP period. It is submitted that the Resolution

Professional acted in violation of the provisions of the 'I& B Code' embodied in

Sections 25(2)(i) and 30(3) by not placing the Appellants revised Resolution

Plan before the Committee of Creditors especially when the CIRP period had

not expired. It is further submitted that subsequently Resolution Professional

sought and was granted extension of CIRP period by the Adjudicating

Authority. Therefore, paucity of time as ground for exclusion of Appellants'

revised Plan would not survive. Lastly, it is submitted that the revised

Resolution Plan of Appellants provided higher upfront payment than the

Successful Resolution Applicant's Plan and the Resolution Professional has

acted contrary to the basic principle of I&B Code in regard to maximization of

the assets of Corporate Debtor by not placing the revised Plan of Appellants

before the Committee of Creditors.

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 5

6. It is submitted on behalf of Respondent Nos. 1 & 2 that the Appellants

were advised by the notice dated 6th February, 2020 about the agenda of the

Committee of Creditors meeting to be held on 11th February, 2020 to evaluate,

verify, discuss and allow the prospective Resolution Applicant to present their

plan and negotiate thereon as also to finalize the list of prospective Resolution

Applicant who would be allowed to participate in the further negotiation

process. It is submitted that the Appellants were present in 5th Committee of

Creditors meeting held on 11th February, 2020 where one of the partner (ARC)

of the Appellants had withdrawn its name from Expression of Interest (EoI). It

is submitted that the Appellants wanted ARC to join only after implementation

of plan which was contrary to EOI. It is further submitted that the Resolution

Professional and the Committee of Creditors informed the Appellants that

payment in the form of Security Receipts was not acceptable. It is submitted

that the Appellants refused to improve the bid amount unless individual score

of all Prospective Resolution Applicants was disclosed. The Committee of

Creditors expressed concern about upfront payment. The Appellants refused to

increase the bid amount at that stage whereas the Successful Resolution

Applicant/ Respondent No.4 enhanced the bid amount from Rs.63 Crores to

Rs.64 Crores. It is submitted that at this stage Mr. M.P. Jain representing the

Appellants sought deferment of the meeting for few days whereas Committee of

Creditors expressed its intention to conclude the exercise by 12th February,

2020 keeping in view the timelines of 'I&B Code'. However, the meeting was

adjourned to 12th February, 2020. It is submitted that on 12th February, 2020

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 6

when Committee of Creditors met, it was informed that in their email

Appellants had admitted anomalies in their Resolution Plan and were seeking

two more days for further negotiation. It is submitted that the there was no

representative of Appellants in meeting of Committee of Creditors held on 12th

February, 2020 and as the timeline was due to expire on 24th February, 2020,

Committee of Creditors decided to exclude the Appellants. Such decision was

taken with 100% consent of Committee of Creditors members. It is further

submitted that only two Prospective Resolution Applicants were left in the fray

out of Four and Mr. Ngaitlang Dhar emerged as H1 with offer of Rs.64.30

Crores plus CIRP Cost upfront. It is only after approval of Resolution Plan of

Respondent No.4 on 12th February, 2020 that a revised offer was received from

Appellants via email on 14th February, 2020 increasing the plan size to 65.65

Crores. It is submitted that the approval of Resolution Plan of Respondent No.4

which has received the approval of Adjudicating Authority does not suffer from

any illegality or material irregularity, as alleged by the Appellants, so as to

require interference by this Appellate Tribunal as approval of such plan resting

upon the commercial wisdom of Committee of Creditors with 100% voting

shares cannot be questioned.

7. Heard learned counsel for the parties at length and perused the record

on the files of the two appeals.

8. It is not in controversy that the Resolution Plan submitted by the

Appellants was taken up for consideration along with other Prospective

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 7

Resolution Applicants on 11th February, 2020 during 5th Committee of

Creditors meeting where the Appellants were represented by Shri M.P. Jain and

on being asked to improve the bid amount and clarify its stand about the

upfront payment, the Appellants declined to increase the bid amount whereas

Respondent No.4 enhanced the bid amount from 63 Crores to 64 Crores. It

emerges from record that upon insistence of Appellants' representative

Committee of Creditors deferred consideration of the Prospective Resolution

Plans but made it clear that they would like to conclude the matter by

tomorrow i.e. 12th February, 2020 in view of the impending expiry of timeline

set by 'I&B Code'. Thus, the Committee of Creditors meeting held on 11th

February, 2020 was adjourned to 12th February, 2020 on which date the

Appellants did not attend the meeting. The Resolution Professional informed

the Committee of Creditors about the mail received from Appellants admitting

anomalies in Resolution Plan, clarification relating to S.R. and seeking two

days' time for further negotiation. The Committee of Creditors, being of the view

that the timelines were to expire on 24th February, 2020, decided to exclude the

Prospective Resolution Applicants who have not attended the meeting on that

day. Thus, the Appellants got excluded from consideration of their Prospective

Resolution Plan. Such decision comes to fore from the minutes of 5th

Committee of Creditors meeting (Page 242 of the appeal paper book in

Company Appeal (AT) (Insolvency) No. 516 of 2020). It is significant to note that

the urgency shown by Committee of Creditors in concluding the process

undertaken for approval of Resolution Plan was with reference to the

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 8

prescribed timeline of 180 days which was to expire on 24th February, 2020.

The Appellants' case that they were excluded from the CIRP during Committee

of Creditors meeting on 12th February, 2020 on the sole ground of paucity of

time, viewed in this context, is not without substance though it cannot be said

that the same was done in an arbitrary fashion at the back of Appellants who

had no knowledge about the Committee of Creditors meeting held on 11th

February, 2020 being adjourned to 12th February, 2020 for consideration of the

Prospective Resolution Plan when their representative was in attendance in the

meeting held on 11th February, 2020. The Appellants, instead of participating

in the meeting, probably on account of not revising their bid offer as suggested

by the Committee of Creditors, chose to stay away but submitted a second

plan/ revised plan on 14th February, 2020 which was never placed before the

Committee of Creditors. Admittedly, the CIRP period had not expired as on 14th

February, 2020. It is disputed by the Appellants that the Resolution Plan of

Respondent No.4 had been approved by the Committee of Creditors on 12th

February, 2020. Relying upon para 1 of the impugned order (at page 50 of the

appeal paper book- Company Appeal (AT) (Insolvency) No. 516 of 2020) and

para 6 of the impugned order (at page 53 of the appeal paper book- Company

Appeal (AT) (Insolvency) No. 516 of 2020), it is emphasized on behalf of

Appellants that the Resolution Plan of Respondent No.4 was approved by the

Committee of Creditors in its 7th Meeting held on 06th March, 2020. This is

seriously disputed by Respondents who invited attention of this Appellate

Tribunal to impugned order dated 18th March, 2020 assailed in Company

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 9

Appeal (AT) (Insolvency) No. 515 of 2020 which spells out that the Resolution

Plan submitted by the highest bidder had already been approved by the

Committee of Creditors on 12th February, 2020 with 100% voting whereafter it

has been placed before the Adjudicating Authority for approval. The

Adjudicating Authority, upon consideration of Appellants I.A No. 27 of 2020

filed in CP(IB) No. 13/GB/2019 noticed the Appellants' prayer for direction to

the Resolution Professional to take on record and to consider the revised offer

submitted by email dated 14th February, 2020. However, the Adjudicating

Authority, upon consideration of material placed before it, found that the

Resolution Plan submitted by the highest bidder had already been approved by

the Committee of Creditors on 12th February, 2020 with 100% voting and

subsequently placed before the Adjudicating Authority for approval. The

Adjudicating Authority appears to have also taken note of the record of 5th

Committee of Creditors meeting dated 11th February, 2020 in arriving at a

conclusion that the Appellants had insisted upon Committee of Creditors to

provide the individual score and the bid amount of all Prospective Resolution

Applicants before its presentation of plan which was validly rejected. It also

noticed that the Appellants had abstained from attending the meeting on 12th

February, 2020 and despite their absence, the Committee of Creditors had

applied its mind on the earlier plan submitted by Appellants and taken a

conscious call. Thus the application came to be rejected in terms of impugned

order dated 18th March, 2020 which is reproduced hereinbelow:

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 10

"ORDER Written objection along with report of 5th COC meeting dated 11.02.2020 and 12.02.2020 is filed by the respondent in the above IA. Heard both sides and perused the record.

2. The above IA is filed by M/s. Panna Pragati Infrastructure and another, who are the proposed unsuccessful Resolution Plan Applicants (RPAs) praying this Tribunal to direct the RP to take on record and to consider the revised offer submitted by email dated 14.02.2020. As per the material placed before this Tribunal, the resolution plan submitted by the highest bidder has already been approved by the COC on 12.02.2020 with 100% voting and also submitted to this Tribunal for its approval. It also transpires from the written Minutes of Meeting dated 11.02.2020 of the 5th COC meeting that the petitioner insisted the COC to provide the individual score and the bid amount of all the RPAs before its presentation of plan and confronted with the COC in not providing that information which is highly uncalled for. It also transpires from record that the petitioner abstained from attending the meeting on 12.02.2020 and despite their absence, the COC applied its mind on the earlier plan submitted by the petitioner and taken conscious call.

3. Since the resolution plan of the highest bidder has already been approved with 100% voting, the above application is not only infructuous but also liable to be rejected on account of latches and lack of bona-fides on the part of the petitioners.

4. Accordingly, the above IA 27 of 2020 is rejected and the same stands disposed of as such."

9. A conjoint reading of the impugned orders passed in these two appeals

lays bare that the facts noticed in regard to approval of the Resolution Plan of

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 11

Respondent No.4, emerging as H1, by Committee of Creditors are mutually

hostile and exclusive. While the impugned order dated 18th March, 2020

assailed in Company Appeal (AT) (Insolvency) No. 515 of 2020 reproduced

hereinabove speaks of approval of Resolution Plan of the highest bidder by the

Committee of Creditors on 12th February, 2020 with 100% voting, the

impugned order dated 18th May, 2020 assailed in Company Appeal (AT)

(Insolvency) No. 516 of 2020 takes note of the approval of Resolution Plan of

highest bidder by Committee of Creditors at its 7th Committee of Creditors

meeting held on 06th March, 2020. What stares in the face is that the

Resolution Plan of Respondent No.4 was not approved by the Committee of

Creditors on 12th February, 2020 when it was considered as a highest bidder

with only H1 & H2 left in the fray while Appellants stood excluded for reasons

assigned in the minutes recorded on 11th February, 2020 and Appellants

abstaining from Committee of Creditors meeting held on 12th February, 2020.

It is clear that no decision in regard to approval of Resolution Plan was taken

by Committee of Creditors in its meeting held on 12th February, 2020,

notwithstanding absence of Appellants, and Respondent No.4 emerging as the

highest bidder. This conclusion is deducible clearly from the fact that the

Resolution Professional appears to have moved an application before the

Adjudicating Authority for extension of period of CIRP by another 90 days

beyond 180 days for reasons of non-approval of the Resolution Plan. This

factual position has been clearly noticed by the Adjudicating Authority in its

order dated 26th February, 2020 passed in IA No. 22 of 2020 in CP(IB)

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 12

No.13/GB/2019 forming pages 247 and 248 of the appeal paper book in

Company Appeal (AT) (Insolvency) No. 515 of 2020 wherein it is noticed that

though Respondent No.4 emerged as the highest bidder in 5th Committee of

Creditors meeting concluded on 12th February, 2020, the decision of

Committee of Creditors in regard to approval of its plan was under

consideration with the higher authority of the Committee of Creditors. It is apt

to reproduce the aforesaid order hereinbelow:

"ORDER

1. This is an application filed by Mr. Amit Pareek, learned RP under Section 12(2) of the Insolvency & Bankruptcy Code, 2016 read with Regulation 40 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016 praying for extension of period of Corporate Insolvency Resolution Process by another 90 days beyond 180 days which would expire on 25th February, 2020 for the reasons of non-approval of the resolution plan.

2. It is the submission of the RP that the COC in its 5 th meeting held on 11.02.2020 concluded on 12.02.2020 declared one Mr. N. Dhar as highest bidder and the said decision of the COC is under consideration for approval with the higher authority of the COC and, therefore, prayed for further extension of CIRP period to 90 days with effect from 25.02.2020.

3. It is also submitted by the learned RP that the COC in its 5th meeting held on 11.02.2020 and 12.02.2020

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 13

has unanimously with 100% voting authorized him to apply for extension of CIRP process for a further period of 90 days.

4. Upon hearing the submission and perusing the record, this Tribunal feels that this is a fit case for grant of extension of time for a period of 90 days as sought by the RP. Accordingly, the above IA is allowed and the time for completion of CIRP is extended for a period of 90 days with effect from 25.02.2020.

5. Call on 27.03.2020 for furnishing further progress report."

10. This order eloquently speaks of the Resolution Plan of Respondent No.4

not having been approved by Committee of Creditors on 12th February, 2020

though Respondent No.4 emerged as H1. Admittedly, on 12th February, 2020

the CIRP period of 180 days was yet to expire and in the event of Resolution

Plan of Respondent No.4 having been approved by Committee of Creditors, at

least 12 days' period was available to the Resolution Professional to place the

approved Resolution Plan before the Adjudicating Authority for approval.

Question of extension of CIRP period by 90 days would not arise in the given

situation. That apart, the aforesaid order clearly bares out that approval of

Resolution Plan of Respondent No.4 emerging as highest bidder was pending

consideration before higher authority of the Committee of Creditors which

necessitated seeking of extension of CIRP period by 90 days. In the face of this

factual position, we find that the impugned order assailed in Company Appeal

(AT) (Insolvency) No. 515 of 2020 having been passed on the basis of incorrect

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 14

factual position as regards approval of Resolution Plan of Respondent No.4 by

Committee of Creditors purportedly on 12th February, 2020 cannot be

supported. Since the Appellants' application being IA No. 27/2020 has been

primarily rejected for having been rendered infructuous on account of the

purported approval of Resolution Plan of Respondent No.4 by Committee of

Creditors on 12th February, 2020, the impugned order is liable to be set aside.

11. The effect of setting aside of the impugned order assailed in Company

Appeal (AT) (Insolvency) No. 515 of 2020 is that the application of Appellants

seeking direction in the name of Resolution Professional to take on record and

consider the Appellants revised offer submitted by email dated 14th February,

2020 deserves to be considered on merit uninfluenced by the subsequent

development viz approval of Resolution Plan of Respondent No.4 by the

Committee of Creditors at the 7th Committee of Creditors meeting held on 06th

March, 2020 as correctly reflected in impugned order dated 18th May, 2020

assailed in Company Appeal (AT) (Insolvency) No. 516 of 2020. This finding

may render consideration of Company Appeal (AT) (Insolvency) No. 516 of 2020

purely of academic interest. However, taking note of the fact that the

Appellants informed the Committee of Creditors through Resolution

Professional about its intention to file a revised Resolution Plan/ second

Resolution Plan which actually came to be filed on 14th February, 2020, we

deem it appropriate to dwell on the issue whether in exceptional circumstances

the timelines prescribed under 'I&B Code' can be relaxed to allow a prospective

Resolution Applicant to submit a second/ revised Resolution Plan, more so

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 15

when it merely involves a small period like one or two days as in the instant

case.

12. Merely because the Appellants were excluded from consideration

primarily on the ground of impending expiry of 180 days of CIRP, after seeking

extension of 90 days in CIRP by the Resolution Professional from Adjudicating

Authority such exclusion of Appellants is unwarranted and the Appellants

could not be excluded from consideration of their revised Resolution Plan on

the strength of earlier exclusion which had nothing to do with disqualification/

ineligibility. Admittedly, the Resolution Professional did not place the revised

Resolution Plan of Appellants before the Committee of Creditors for

consideration and in view of our finding that the dismissal of IA No. 27/2020

assailed in Company Appeal (AT) (Insolvency) No. 515 of 2020 in terms of

impugned order dated 18th March, 2020 was bad, the ground of exclusion of

Appellants from consideration of Resolution Plan would not survive. The

ground urged by the Respondents that the approval of the Resolution Plan in

the instant case being based on the commercial wisdom of the Committee of

Creditors is without substance as the autonomy or commercial wisdom of the

Committee of Creditors is not being interfered with. It is a case of material

irregularity in the conduct of CIRP by the Resolution Professional and the

mutually irreconcilable two orders emanating from the Adjudicating Authority,

one resting upon incorrect facts, which render the exercise in regard to

approval of Resolution Plan of Respondent No.4 flawed. It is abundantly clear

that the Resolution Professional acted against the mandate of provisions

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 16

contained in Sections 25(2) and 30(3) of the 'I&B Code' in not placing the

revised Resolution Plan of the Appellants before the Committee of Creditors for

consideration which would also be contrary to the objective of maximization of

the assets of the Corporate Debtor sought to be achieved by the 'I&B Code'.

13. The Hon'ble Apex Court in "Committee of Creditors of Essar Steel

India Limited Vs. Satish Kumar Gupta and Ors.- 2019 SCC OnLine SC

1478", while dealing with Constitutional validity of various provisions of 'I&B

Code' struck down the word 'mandatorily' from amended Section 12 of the 'I&B

Code' as being manifestly arbitrary under Article 14 of the Constitution of India

which has the effect of ordinarily completing the CIRP within the outer limit of

330 days but in exceptional cases the Adjudicating Authority or this Appellate

Tribunal can extend time beyond 330 days, relevant of which is reproduced

hereunder:

"108..................... Both these judgments have been followed in Neeraj Kumar Sainy v. State of Uttar Pradesh MANU/SC/0283/2017 : (2017) 14 SCC 136 at paragraphs 29 and 32. Given the fact that the time taken in legal proceedings cannot possibly harm a litigant if the Tribunal itself cannot take up the litigant's case within the requisite period for no fault of the litigant, a provision which mandatorily requires the CIRP to end by a certain date- without any exception thereto-may well be an excessive interference with a litigant's fundamental right to non- arbitrary treatment Under Article 14 and an excessive,

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 17

arbitrary and therefore unreasonable restriction on a litigant's fundamental right to carry on business Under Article 19(1)(g) of the Constitution of India. This being the case, we would ordinarily have struck down the provision in its entirety. However, that would then throw the baby out with the bath water, inasmuch as the time taken in legal proceedings is certainly an important factor which causes delay, and which has made previous statutory experiments fail as we have seen from Madras Petrochem (supra). Thus, while leaving the provision otherwise intact, we strike down the word "mandatorily" as being manifestly arbitrary Under Article 14 of the Constitution of India and as being an excessive and unreasonable restriction on the litigant's right to carry on business Under Article 19(1)(g) of the Constitution. The effect 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

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 18

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 grace period of 90 days from the date of commencement of the Amending Act of 2019 is exceeded, there again a discretion can be exercised by the Adjudicating Authority and/or Appellate Tribunal to further extend time keeping the aforesaid parameters in mind. It is only in such exceptional cases that time can be extended, the general Rule being that 330 days is the outer limit within which resolution of the stressed assets of the corporate debtor must take place beyond which the corporate debtor is to be driven into liquidation."

14. In the instant case, Appellants submitted the Resolution Plan only two

days after the revised plan of Respondent No.4 and well within the 180 days of

ordinary timelines of CIRP under 'I&B Code'. There was no justification for its

rejection by the Resolution Professional who was duty bound to place the same

before the Committee of Creditors especially when the ordinary CIRP period of

180 days was still subsisting. Therefore, the ground urged on behalf of

Respondents that the time could not be extended by the Adjudicating Authority

or by this Appellate Tribunal in appropriate cases is not in tune with the law

interpreted by the Hon'ble Apex Court more so as the same was within the

ordinary timelines and subsequently the Resolution Professional himself had

sought extension of 90 days from the Adjudicating Authority for placing the

Resolution Plan approved by Committee of Creditors before it for approval.

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020 19

15. For the foregoing reasons, we find that the impugned orders in both the

appeals cannot be supported. The impugned orders suffer from grave legal

infirmity besides involving factual frailty. The impugned orders are accordingly

set aside and the appeals are allowed. The CIRP is directed to resume from the

stage of consideration of the Resolution Plans. The Resolution Professional

shall place the Resolution Plans of H1 and H2 besides revised Resolution Plan

of Appellants before the Committee of Creditors for consideration. The

Committee of Creditors would take a call in according consideration to such

Resolution Plans keeping in view the extended timelines. The period of judicial

intervention shall stand excluded while computing the extended timelines of

270 days.

Copy of this Order be communicated to the Adjudicating Authority and

the concerned parties in accordance with Rules.

[Justice Bansi Lal Bhat] Acting Chairperson

[Justice Jarat Kumar Jain] Member (Judicial)

[Shreesha Merla] Member (Technical)

NEW DELHI

19th October, 2020 AR

Company Appeal (AT) (Insolvency) Nos. 515 & 516 of 2020