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Judgment
O R D E R
Per: Bidisha Banerjee, Member (Judicial)
Heard Ld. Counsels.
The application that has been preferred by Mahalaxmi Wellman Fuel LLP (“Applicant”), against the rejection of their expression of Interest dated 3 September 2022 (“EOI”), seeking participation in the resolution process of the Corporate Debtor. By way of the Application, the Applicant has sought the following reliefs: -
Condonation of delay of 108 days in submitting their EOI; (ii) Direction to RP to consider the EOI of the Applicant’s SPV or subsidiary;
Direction to RP to provide the Information Memorandum (“IM”) and access to the Virtual Data Room (“VDR”) of the Corporate Debtor to the Applicant;
Direction to RP to grant 2 (two) weeks’ time to the Applicant/its SPV or subsidiary for submission of their resolution plan from the date of acceptance of their EOI.
The RP has resisted the claim on the ground that: -
The CIRP was ordered on 11.02.2022. The first meeting of CoC was held on 11.03.2022. Form G was published inviting EOI on 28.04.2022, and 40 EOIs were received by 18.05.2022.
Out of 40 EOIs, 35 PRAs who were found to be compliant with the eligibility criteria set out were included in the final list of the PRAs, which was issued on 6 June, 2022. The PRAs were given access to the VDR on 10 June, 2022 in order to enable them to carry out the due diligence of the Corporate Debtor. The request for Resolution Plans along with the Evaluation Matrix was issued on 23 June, 2022 and 23 July, 2022 was stipulated as the last date for submission of resolution plans.
The timelines as were required to be met by the RP in accordance with the CIRP Regulations were duly met. Meanwhile, by an order dated 8 August, 2022 passed in I.A. No. 788 of 2022, this Adjudicating Authority allowed extension of the CIRP period from 180 days to 270 days, i.e., from 10 August, 2022 to 7 November, 2022.
On 1 September, 2022 (i.e., after over 3 months of the last date for submission of EOI), the Applicant sent an email to the RP, expressing its interest for participating in the resolution process of the Corporate Debtor. By a subsequent email dated 3 September, 2022 to the RP, the Applicant submitted its EOI in respect of the Corporate Debtor.
CIRP is a time bound process carried out in terms of the IBC and in view of the provisions of Regulations 36A (6) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”), the RP could not have accepted the EOI of the Applicant which was submitted long after the last date of submission of EOI. Accordingly, the EOI of the Applicant was rejected.
By 30 September, 2022 5 (five) resolution plans were received for the Corporate Debtor. The process of review, discussions and negotiations in respect of the resolution plans is presently ongoing.
The 330 days of CIRP period of the Corporate Debtor was slated to expire on 6 July, 2023.
Regulation 36A (6) of the CIRP Regulations clearly lays down that EOI received after the time specified in the IEOI under clause (b) of sub-regulation (3) of Regulation 36A shall be rejected. The last date for submission of EOI was specified as 18 May, 2022. The EOI was submitted by the Applicant on 3 September, 2022 i.e., with a gross delay of 108 days.
The resolution process cannot be allowed to be protracted by permitting PRAs such as the Applicant to deviate from the stipulated timelines as per their whims and fancies.
The CIRP of the Corporate Debtor has reached an advanced stage, with 5 resolution plans having already been received for the Corporate Debtor from promising resolution applicants. The resolution plans have already been opened and review, discussions and negotiations are presently being carried out in regard to these resolution plans between the RP, CoC and the resolution applicants.
In case of Amit Gupta v. Yogesh Gupta, Company Appeal (AT) (Ins) No. 903 of 2019, the Hon’ble Appellate Tribunal made an observation that even an email sent to the RP as an EOI after a few hours of the deadline prescribed in the IEOI, is liable to be rejected by the RP.
The rival contentions are noted. It is discernible that the applicant has not come up with any plausible explanation for the delay in expression of its interest. Since 5 plans are already under consideration and 330 days of CIRP is over, we deem it appropriate not to allow any further delay in completion of the process by allowing the applicant to put its EOI belatedly.
Hence, this IA(I.B.C)/1039/KB/2022 is hereby rejected.