Case Note & Summary
The case involved an appeal against an order of the National Company Law Tribunal (NCLT) regarding the exclusion of 87 days from the Corporate Insolvency Resolution Process (CIRP) timeline. The appellant, Vivek Bansal, acting as the Resolution Professional for Senior Builders Ltd., filed an application under Section 12(2) of the Insolvency and Bankruptcy Code, 2016 (IBC) to exclude the specified period due to a delay caused by the removal of the erstwhile Resolution Professional. The NCLT had previously rejected this application, prompting the appeal. The appellant argued that without the exclusion, the CIRP period would exceed the statutory limit of 330 days, leading to automatic liquidation of the Corporate Debtor, which is contrary to the principles established by the Supreme Court regarding liquidation being a last resort. The authorized representative of the Committee of Creditors (CoC) supported the appeal. The Tribunal ultimately allowed the appeal, set aside the NCLT's order, and granted the exclusion of the 87 days, emphasizing the importance of preserving the Corporate Debtor as a going concern. The pending application was also disposed of accordingly.
Headnote
A) Insolvency Law - Exclusion of Time - Application for Exclusion of 87 Days - Insolvency and Bankruptcy Code, 2016, Section 12(2) - The appellant sought exclusion of 87 days from the CIRP timeline to prevent exceeding the maximum period allowed, which could trigger liquidation. The court held that exclusion was necessary to preserve the Corporate Debtor as a going concern and set aside the impugned order rejecting the application (Paras 1-5).
Issue of Consideration
Whether the period of 87 days should be excluded from the Corporate Insolvency Resolution Process (CIRP) timeline.
Final Decision
The appeal was allowed, the impugned order was set aside, and the exclusion of 87 days from the CIRP timeline was granted.
Law Points
- Insolvency proceedings
- exclusion of time
- Corporate Insolvency Resolution Process
- liquidation as last resort
