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Judgment
Per:Rajeswara Rao Vittanala, Member (J)
I.A. No.137 of 2020 in C.P. (IB) No.137/BB/2018 is filed by Mr. MotappaThimmarayaswamy,Resolution Professional of M/s.SGP Software Solutions Private limited (hereinafter referred to as ‘Applicant/Resolution Professional’) under Section 12 (2) & (3)of the I & B code, 2016, R/w Rule 40 of IBBI (Corporate Insolvency Resolution Process) Regulations, 2016 by interalia seeking to grant extension of further period of 60 days of CIRP with effect from 22nd March 2020 till 21st May, 2020 etc.
Briefs facts of the case, as mentioned in Application, which are relevant to the issue in question, are as follows:
Initially C.P.(IB) No.137/BB/2018 was filed by Mr. Joji ThomasU/s 9 of the IBC, 2016, R/w Rule 6 of I & B (AAA) Rules, 2016 for initiating CIRP process in respect of the Corporate Debtor namely M/s. SGP Software Solutions Private Limited, which was admitted by the Adjudicating Authority on 24.09.2019 by initiating CIRP, appointing Mr.MotappaThimmarayaswamy as the IRP and imposing moratorium,etc.
Pursuant to the order, the IRP had made public announcement on 11.10.2019 in two newspapers namely Deccan Chronicle (English) and Samyuktha Karnataka (Kannada). Subsequently, at the 1stCOC meeting held on 6th November 2019, the IRP was confirmed as RP.In the 2nd COC meeting held on 14.01.2020, Yes Bank Limited, who is sole Member of the CoC invoked the corporate guarantee and recovered from the Guarantor outstanding due from the Corporate Debtor. Therefore, the RP reconstituted the Committee of Creditor; however as there was a delay in formal communication by the Member of the COC with respect to their claim, the process was on hold from 14.01.2020 till 17.02.2020. The RP reconstituted the Committee in accordance with Regulation 16 of the IBBI (Insolvency Resolution Process of the Corporate Persons) Regulations, 2016 on 24th February 2020.
At the 2nd CoC meeting held on 02.03.2020, the issue of extension of the CIRP period for another 60 days with effect from 22nd March 2020 was approved and passed the following resolution with requisite majority as per law.
"Resolved that pursuant to the provisions of Section 12 (2) & (3) of the I&B Code, 2016 r/w Regulation 40 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulation 2016 and other applicable provisions and subject to the approval of Hon'ble NCLT, Bengaluru Bench the Committee of Creditors be and hereby approved for extension of CIRP for 60 days from the date of expected completion period of 180 days" “Resolution further that Mr. MotappaThimmarayaswamy, RP be and is hereby authorised to file an Interlocutory Application before the Hon’ble NCLT, Bengaluru Bench to give effect to this resolution”.
Heard Mr. K. Chethan Kumar Learned Counsel for the Resolution Professional. We have carefully perused the pleadings of the party and extant provisions of the Code and the Rules made thereunder.
As narrated supra, the Resolution Professional is making every effort to conclude the CIRP in question, within stipulated time but due to circumstances as explained above, it is not possible to conclude the CIRP within a period of 180 days as stipulated under the Code. An appropriate Resolution was also passed unanimously by the CoC Members in its 2ndmeeting held on 02.03.2020 in favour of the extension of CIRP period by further 60 days. The instant Application is filed in accordance with law and the Resolution to seek extension was passed with requisite majority as per law. Therefore, we are satisfied with reasons cited by the Resolution Professional for seeking extension of time, and thus it is just and proper to extend a further period of 60 days with effect from 22nd March 2020.
In the result, I.A.No.137 of 2020 in C.P. (IB) No.137/BB/2018 is allowed with the following directions:
Hereby extended for a further period of 60 days beyond 180 days with effect from 22nd March 2020 in order to conclude the CIRP process in respect of Corporate Debtor as per Order dated 24.09.2019 passed in C.P. (IB) No.138/BB/2018.
We hereby direct that the Resolution Professional is directed to take all expeditious steps to complete the CIRP within the extended period without fail.