Shailen Shah, Resolution Professional vs Dbm Geotechnics & Construction Ltd

Shailen Shah, Resolution Professional ...Appellant

Versus

DBM Geotechnics & Construction Ltd. ...Respondent

Present:

For Appellant : Mr. Sanjiv Sen, Senior Advocate assisted by Mr. Niraj Kumar, Mr. Shashank Agarwal, Mr. Satendra K. Rai, Advocates

For Respondents : Ms. Vanita Bhargava, Mr. Ajay Bhargava, Mr. Aseem Chaturvedi and Ms. Wamika Trehan, Advocates for DBM Mr. S. Santhanam Swaminadhan and Ms. Nishtha Khurana, Advocate for suspended Board of Directors

Mr. I.P.S. Oberoi, Advocate for Bank of India

ORDER

20.12.2018 The 'Resolution Professional' of 'Dighi Port Limited' filed a

Miscellaneous Application before the Adjudicating Authority (National Company

Law Tribunal), Mumbai Bench seeking excluding the period from the date of

pronouncement of the order and communication of the order to the 'Interim

Resolution Professional' (IRP) i.e. from 25th March, 2018 to 6th April, 2018 for

calculating the total period of 270 days of 'corporate insolvency resolution

process'. The Adjudicating Authority noticed that the petition under Section 9

preferred by the 'DBM Geotechnics & Constructions Ltd.' (Operational Creditor)

was admitted on 25th March, 2018 and certified copy of the order was issued on 2

6th April, 2018. In view of the decision of this Appellate Tribunal in 'Quinn

Logistics India Pvt. Ltd. v. Mack Soft Tech Pvt. Ltd.' in 'Company Appeal

(AT) (Insolvency) No. 185 of 2018' allowed partly by excluding 12 days period

from 25th March, 2018 to 6th April, 2018.

2. The learned counsel appearing on behalf of the appellant challenged the

impugned order dated 26th October, 2018 insofar it relates to exclusion of further

period from 15th June, 2018 to 16th August, 2018. It is submitted that one Ms.

Purnima Dhiraj Shetty was appointed as 'Interim Resolution Professional' who

was replaced by the 'Committee of Creditors' whereinafter the appellant, Mr.

Shailen Shah was appointed as 'Resolution Professional' by decision on 15th

June, 2018. The said order was approved by the Adjudicating Authority after

about two months and communicated to the appellant on 16th August, 2018 on

which date the appellant took charge as a 'Resolution Professional'.

3. Mr. I.P.S. Oberoi, learned counsel appearing on behalf of the Bank of India

(lead Bank of 'CoC') submitted that approximately three 'resolution plans' are

pending for consideration and the aforesaid period is also excluded the

'Committee of Creditors' can consider these plans.

4. The aforesaid stand has also been supported by Mr. S. Swaminadhan,

learned counsel appearing on behalf of the suspended Board of Directors.

However, Mr. Aseem Chaturvedi, learned counsel appearing on behalf of the

'DBM Geotechnics & Construction Ltd.' ('Operational Creditor') opposed the

prayer though we pointed out that if exclusion is not allowed, the 'Corporate

Debtor' may be liquidated.

5. We have heard the learned counsel for the parties and perused the record.

Company Appeal (AT) (Insolvency) No. 724 of 2018 3

6. It is not in dispute that the 'Committee of Creditors' decided to appoint Mr.

Shailen Shah, as a Resolution Professional in place of Ms. Purnima Dhiraj

Shetty. The said decision was approved by the Adjudicating Authority on 6th

August, 2018 and communicated to the appellant on 16th August, 2018 and he

joined on the same date.

7. In 'Quinn Logistics India Pvt. Ltd.' (supra) this Appellate Tribunal

taking into consideration for the unforeseen circumstances observed that certain

intervening period can be excluded for counting the total period of 270 days and

observed as follows :

"10. For example, for following good grounds and

unforeseen circumstances, the intervening period can

be excluded for counting of the total period of 270

days of resolution process:-

(i) If the corporate insolvency resolution process

is stayed by 'a court of law or the Adjudicating

Authority or the Appellate Tribunal or the

Hon'ble Supreme Court.

(ii) If no 'Resolution Professional' is functioning for

one or other reason during the corporate

insolvency resolution process, such as

removal.

(iii) The period between the date of order of

admission/moratorium is passed and the

actual date on which the 'Resolution

Company Appeal (AT) (Insolvency) No. 724 of 2018 4

Professional' takes charge for completing the

corporate insolvency resolution process.

(iv) On hearing a case, if order is reserved by the

Adjudicating Authority or the Appellate

Tribunal or the Hon'ble Supreme Court and

finally pass order enabling the 'Resolution

Professional' to complete the corporate

insolvency resolution process.

(v) If the corporate insolvency resolution process

is set aside by the Appellate Tribunal or order

of the Appellate Tribunal is reversed by the

Hon'ble Supreme Court and corporate

insolvency resolution process is restored.

(vi) Any other circumstances which justifies

exclusion of certain period.

However, after exclusion of the period, if further

period is allowed the total number of days cannot

exceed 270 days which is the maximum time limit

prescribed under the Code."

8. As it appears that the earlier 'Resolution Professional' had not taken any

effective steps due to which the 'Committee of Creditors' recommended to

appoint the appellant on 15th June, 2018, and the appellant was intimated by

the Adjudicating Authority on 16th August, 2018 and the matter is remained

pending before the Adjudicating Authority for more than a month after which the

order was passed on 6th August, 2018, we are of the view that the period between

Company Appeal (AT) (Insolvency) No. 724 of 2018 5

filing application for approval of the name of the appellant and date of

communication of the order i.e.16th August, 2018 should be excluded for the

purpose of counting the period of 270 days. This period for exclusion will be in

addition to the exclusion of period as already made by the Adjudicating Authority

by impugned order dated 26th October, 2018. We accordingly direct to exclude

the aforesaid period for counting 270 days. The Resolution Professional will

now take immediate steps to take up the matter with 'Committee of Creditors'

and in turn the 'Committee of Creditors' will pass appropriate order under

Section 30 in accordance with law and place its decision before the Adjudicating

Authority for its decision. The Adjudicating Authority will decide the same on

an early date.

9. The appeal is allowed with the aforesaid observations and directions. No

costs.

[Justice S.J. Mukhopadhaya] Chairperson

[ JusticeBansi Lal Bhat ] Member(Judicial)

/ns/uk/

Company Appeal (AT) (Insolvency) No. 724 of 2018