Alerts & Updates 10th May 2018
In view of various cases being dealt by the National Company Law Tribunals (“NCLT”) across various jurisdictions to allow exclusion of certain period from the 270 days period (being the maximum period for completion of the ), the National Company Law Appellate Tribunal (“NCLAT”) has dealt with the question in the matter of Quinn Logistics India Private Limited v/s Mack Soft Tech Private Limited, dated 8 May 2018 (order available here), and held that if an application is filed by the ‘Resolution Professional’ or the ‘Committee of Creditors’ or ‘any aggrieved person’ for justified reasons, it is always open to the NCLTs/NCLAT to ‘exclude certain period’ for the purpose of counting the total period of 270 days, if the facts and circumstances justify exclusion, in unforeseen circumstances. The NLCAT has however, stated a caution that 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 Insolvency and Bankruptcy Code, 2016.
Examples of good grounds for exclusion of certain period from 270 days.
Using the aforementioned principle, the NCLAT has also listed few good grounds and unforeseen circumstances, where the intervening period can be excluded for counting of the total period of 270 days of resolution process, such as:
1. Stay on CIRP. If the corporate insolvency resolution process (“CIRP”) is stayed by ‘a court of law or the NCLT or the NCLAT or the Hon’ble Supreme Court.
2. Non-functioning of resolution professional. If no ‘Resolution Professional’ is functioning for one or other reason during the CIRP, such as removal.
3. Delayed charge by the Resolution Professional. The period between the date of order of admission/moratorium is passed and the actual date on which the ‘Resolution Professional’ takes charge for completing the CIRP.
4. Order reserved. On hearing a case, if order is reserved by the NCLT or the NCLAT or the Hon’ble Supreme Court and finally pass order enabling the ‘Resolution Professional’ to complete the CIRP.
5. Setting aside / reversal of orders. If the CIRP is set aside by the NCLAT or order of the NCLAT is reversed by the Hon’ble Supreme Court and CIRP is restored.
6. Residuary circumstances. Any other circumstances which justifies exclusion of certain period.
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