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Judgment
Harish Chander Suri, Member (T)
This unnumbered application No. ______/KB/2020 under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the N.C.L.T. Rules, 2016, has been filed by Mr. Surya Kanta Satapathy, the Chairman of the Monitoring Committee of Alex Green Energy Pvt. Ltd. (the applicant), which was admitted to and has successfully undergone the Corporate Insolvency Resolution Process (CIRP) and resolution plan of the resolution applicant was approved by this Adjudicating Authority vide its order dated 25.11.2019.
It is submitted that after taking charge of the management of affairs of the Corporate Debtor and during the course of evolving the Resolution Plan, the Applicant came to know that on 26.05.2012 GRIDCO Limited, having its registered office at Janapath, Bhubaneswar, Pin Code- 751022, Odisha, had entered into a Power Purchase Agreement (PPA) with the Corporate Debtor. The said agreement was terminated by GRIDCO Ltd. during the CIRP period. The termination of the said agreement was challenged by the applicant vide C.A. (IB) No. 1184/KB/2019 before this Tribunal for enforcing the rights of the Corporate Debtor arising out of such Power Purchase Agreement (PPA, and vide orders dated 14/10/2019, the said decision of GRIDCO Ltd. was set aside and it was held that the termination of the said Power Purchase Agreement (PPA) dated 26.05.2012 was in violation of the moratorium declared by the Adjudicating Authority and further pleased to direct the respondent to restore the said Power Purchase Agreement (PPA) dated 26.05.2012 as if there was no termination of PPA within one week of the date of the order.
The Applicant further submits that the initial Resolution Plan dated 28.10.2019 had been submitted on the 29th day of October, 2019 and after negotiation with the Committee of Creditors (CoC), the final Resolution Plan was submitted on 04.11.2019 and the same was approved by this A/A vide order dated 25.11.2019, whereby the successful Resolution Applicant had undertaken to run the plant within 6 months from the date of approval of resolution plan after taking immediate steps for repair and maintenance of the plant.
The Applicant submits that the entire money, as per the Resolution Plan, has already been paid to all the stakeholders i.e., towards the CIRP cost, to State Bank of India (SBI), the sole Financial Creditor & to the Operational Creditors a sum of Rs. 11.07 Crores as per commitment made therein. As regards introduction of Resolution Applicant's directors, an application has already been made before the Registrar of Companies (ROC), Kolkata, for effecting necessary change directors. With regard to the production status, it is ready to generate & supply 3.3 MW of electricity instantly once the Power Purchase Agreement (PPA) got active. Similarly, with regard to the electricity connection to the plant, in spite of the Resolution Applicant's repeated requests through number of letters & personal follow up, Odisha Power Transmission Corporation Limited (OPTCL) has not yet given electricity connection to the plant. Odisha Power Transmission Corporation Limited (OPTCL) is a subsidiary/sister concern of GRIDCO Ltd. and they need GRIDCO Ltd. clearance for electricity connection. The applicant has also sent various letters to the Govt. of Odisha and sent letters on email dated 13.05.2020 to GRIDCO Ltd. as well as to OPTCL for taking urgent necessary steps in this regard. Various steps are stated to have already been taken for renovation and maintenance of the plant, which are as follows:
a. A sum of approx. Rs. 1 crore has already been invested for renovation and maintenance of Control Room structure, Inverter, Breaker and transmission line and cleaning of entire factory premises.
b. Due to non-availability of 33 KV electricity connection / non-cooperation of GRIDCO Ltd., critical Plant/Equipment's such as Inverter & Control panel, Breaker, Transmission line cannot be checked about its present status.
c. Order has already been placed for purchasing 2 new Inverter with ABB (OEM) (Original Equipment Manufacturer) & control panel for its replacement.
The Applicant states and submits that on 04/05/2020 the Applicant received a letter dated 04/05/2020 from the Resolution Applicant whereby the Resolution Applicant requested the Applicant to take appropriate steps for extension of implementation of resolution plan of M/s. Alex Green Energy Pvt. Ltd. After receiving the said letter dated 04/05/2020 the Applicant has moved the instant application praying for the reliefs.
It is pertinent to mention here that a sum of Rs. 11.07 crores has paid to State Bank of India, SAMB-I,Kolkata pursuant to the Resolution plan approved including the other stake holders like the operational credit Ors. and CIRP costs. The Resolution applicant had taken all necessary steps as required under the relevant provisions of law in Insolvency Bankruptcy Code and other applicable laws for operation of the 5 (five) MW Solar Power Plant as per the relevant clause incorporated /stipulated in the said Resolution plan as approved by the Hon'ble Adjudicating Authority of NCLT, Kolkata Bench, Kolkata.
It is stated that Odisha Power Transmission Corporation Limited (OPTCL) had disconnected the power connection prior to the CIRP process and several representation/letters have been sent by the Chairman of the Monitoring Committee as well as the Resolution Applicant to the concerned authority of OPTCL and Gridco as per letter dated 27.11.2019, 11.02.2020, 05.05.2020 for power restoration to the said plant for testing of its machinery and other allied activities to commence the operation of the said 5 MW Solar Power Plant. The Resolution applicant have engaged 14 number of persons in the said plant located in the Balangir district of Odisha for its necessary revival and have incurred day to day expenses for maintenance of the said plant as well as the security personnel. Similarly, various letters are stated to have been written to various authorities including the Chief Secretary, the State Govt. of Orissa to give necessary permission of deployment of people in the lockdown period for day to day activities in the unit, and that the Resolution Applicant will be able to restart the plant within a period of 6 months from the date of expiry of 6 months from the approval of the Resolution Plan by the Adjudicating Authority.
The Applicant states and submits that apart from the aforesaid, due to present prevailing circumstances arising out of COVID-19 pandemic, the Government of India was pleased to declare Nation-wide lockdown. In consequence whereof all the works were suspended from 22nd March, 2020 till date, which will continue till 31.5.2020. For the aforesaid reasons and due to the COVID-19 pandemic attack in India the Implementation schedule of the Resolution Plan has been requested to be extended for another period of 6 months, from 24.05.2020 to 24.11.2020. It is submitted that in case the time is not extended, they would face immense hardship and difficulty and the interests of the Corporate Debtor as well as the other stake holders would be highly prejudiced. The applicant has prayed that orders extending the Implementation schedule of the Resolution Plan for another period of 6 months from 24.05.2020 to 24.11.2020, might be passed.
WE have heard learned counsel Mr. Ramesh Ch. Prusti for the Chairman of the Monitoring Committee. Prima facie, we were not convinced that the application under Section 60(5) of the Insolvency and Bankruptcy Code could be filed in the aforesaid circumstance because the provisions of the said Section do not cover any such circumstances or eventuality.
Section 60(5) of the Code reads as under:-
"60. Adjudicating Authority for corporate persons.-
(1)
(5) Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of -
(a) any application or proceedings by or against the corporate debtor or corporate person;
(b) any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and
(c) any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code."
The application is neither against a corporate debtor nor against any corporate person. It is not a claim made by or against the corporate debtor or corporate person, or its subsidiaries situated in India. It however, appears to be a question arising out of or in relation to the insolvency resolution, because the applicant has submitted in details that after the Resolution Plan had been successfully approved by the CoC and this Adjudicating Authority, the Resolution has executed a major portion of the plan, and performed almost all its responsibilities as per the Resolution Plan. Even though, during the course of arguments, the learned counsel could not produce any need of such an application for such a relief, but on a deeper thinking, and on perusal of various aspects, including the decisions of Hon'ble Supreme Court, Hon'ble National Company Law Appellate Tribunal, and a favourable decision given by the N.C.L.T. Chandigarh Bench, allowing extension of time in the circumstance out of control, like pandemic situation like Covid-19, we wish to discuss the question at length.
The only question that falls for consideration in the present case is : Whether a successful Resolution Applicant can file an application under the provisions of Section 60(5) of the Code, for extending the time stipulated for complying with the terms and conditions mentioned in the Resolution Plan. In this regard, it is worthwhile to question whether there was any need for the applicant to come forward by way of this application for seeking extension of time at all, particularly when he has already completed more or less everything pursuant to the approval of the Resolution Plan. Nobody has questioned and nobody probably can question the Resolution Applicant after its Plan has already been approved by the COC and then by the Adjudicating Authority. It has already entered the shoes of the Corporate Debtor, and started doing all that was required to be done by the erstwhile Corporate Debtor, including the change of its directors for which necessary correspondence is stated to have been made by the Resolution Applicant. However, since the applicant has referred to and relied upon certain decisions, we may notice the view taken therein.
(a) In Suo Motu Writ Petition (Civil) No(s).3/2020, the Hon'ble Supreme Court of India has extended the limitation period for all the proceedings before all the Courts and Tribunals, the order read as follows:
"This Court has taken Suo Motu cognizance of the situation arising out of the challenge faced by the country on account of Covid-19 Virus and resultant difficulties that may be faced by litigants across the country in filing their petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws (both Central and/or State). To obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunals across the country including this Court, it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings."
(b) Similarly, The Hon'ble NCLAT in Suo Moto - Company Appeal (AT) (Insolvency) No. 01 of 2020, has also held that:
"(1) That the period of lockdown ordered by the Central Government and the State Governments including the period as may be extended either in whole or part of the country, where the registered office of the Corporate Debtor may be located, shall be excluded for the purpose of counting of the period for 'Resolution Process under Section 12 of the Insolvency and Bankruptcy Code, 2016, in all cases where 'Corporate Insolvency Resolution Process' has been initiated and pending before any Bench of the National Company Law Tribunal or in Appeal before this Appellate Tribunal.
(2) It is further ordered that any interim order/ stay order passed by this Appellate Tribunal in anyone or the other Appeal under Insolvency and Bankruptcy Code, 2016 shall continue till next date of hearing, which may be notified later."
The learned counsel for the applicant relied upon case, IA No. 184 and 185 of 2020 In CP (IB) No. 30/Chd/Pb/2017 (Admitted) THE NATIONAL COMPANY LAW TRIBUNAL CHANDIGARH BENCH, The Hon'ble Bench, held as under :-
"8. In the circumstances and since the facts are not disputed by the respondents and in view of the orders of the Hon'ble Supreme Court of India and the National Company Law Appellate Tribunal and the new Regulations issued by the Insolvency and Bankruptcy Board of India, the entire lockdown period i.e. from the date of imposition of lockdown by the Government of India till the reopening of National Company Law Tribunal, Chandigarh Bench, on regular basis, after removal of the lockdown, be excluded, from the compliances required to be made under order dated 13.03.2020 in CA No. 893/2019, passed by this Tribunal and in relation to the Corporate Insolvency Resolution Process. Accordingly, IA No. 185/2020 stands disposed of".
In the matter of Sunil Kumar Agarwal, RP of Digjam Ltd. v. Suspended Board of Directors of Digjam Ltd. and Ors., I.A. 144/2020 IN CP (IB) 594/NCLT/AHM/2018, (order delivered on 27.05.2020) the Resolution Applicant had filed an affidavit dated 29.04.2020, whereby it sought certain revision/modification/relaxation in Resolution Plan in respect of the time frame for payment to the Creditors and other stakeholders due to financial difficulties arising out of current pandemic situation of COVID-19 virus and the consequent ongoing lockdown, while an application filed under section 30(6) of the Code for approval of resolution plan was still pending. The learned NCLT Ahmedabad bench held in para 20 and 23 that:
In view of the relaxation so granted by the R.B.I. as "Developmental and Regulatory Policies", as stated above, the claim of Resolution Applicant in respect of the concession/relaxation in the time-line for payment to its Financial Creditors/Operational Creditors/Other Stakeholders, if any, is genuine and bonafide, therefore, Resolution Applicant deserves relaxation/concession. Such relaxation in the time frame or timeline for payments is/are not going to change the nature and character of the Plan
Under the facts and circumstances as narrated and discussed in sequel herein above, the Resolution Plan with modified time frame in respect of mode of payment to Financial Creditors/Operational Creditors/Other Stakeholders, if any, or as the case may be is/are allowed accordingly It may be further mentioned that the Government has inserted special provision relating to time-line by adding Regulation 40C to IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 laying down that the lockdown period shall not be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown. The relevant amendment is reproduced below:
"40C. Special provision relating to time-line.
Notwithstanding the time-lines contained in these regulations, but subject to the provisions in the Code, the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process."
Having gone through all the aforesaid decisions from the Hon'ble Supreme Court, Hon'ble Appellate Tribunal and our coordinate Bench of NCLT Chandigarh, whereby the period of lock-down has been ordered NOT to be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown in relation to a corporate insolvency resolution process, let us now revert back to the only question involved in the present set of facts and circumstances. Here in this case, the CIRP came to an end once the Resolution Plan had already been approved by the CoC, and thereafter by this Adjudicating Authority. The only issues that the Resolution Applicant has is, the litigation with other local authorities, which led him to file some litigation and the said litigation has delayed the execution of the Resolution Plan. For the delay in fighting litigation with other local authorities, no provision of the IBC could be invoked. That is a matter between the Resolution Applicant and the other third parties, for which no such permission or extension of time was required from this Adjudicating Authority. But since the Applicant has filed an application under Section 60(5), of the Code, even though these provisions could not have been invoked, but looking at the special circumstances due to the spread of Covid-19, this may also be considered to be the genuine contributory cause of delay in execution of the Resolution Plan. We would not have allowed this application but for these special circumstances, we allowed the application upon the following orders:-
(i) The implementation schedule of the Resolution Plan be extended for another period of 6 months from 24.05.2020 to 24.11.2020.
(ii) The unnumbered IA of 2020 in C.P. (IB) No. 1439/KB/2018 is accordingly disposed of.
(iii) There shall be no orders as to costs.
(iv) Registry is directed to serve copies to the parties forthwith by way of e-mail.