Purusottam Behera vs State Bank Of India & Ors.

“1.

All the appeals have been filed challenging the order passed on 28.01.2026 in different IAs filed by the Resolution Professional (RP), the appellant herein with respect to personal guarantees of the personal guarantors.

2.

By the impugned order, adjudicating authority has rejected the application in one of the IAs (giving rise to Comp. App. (AT) (Ins.) No. 258/2026), following prayers have been made:

“(a)

Consider the present IA of 2026 under section 60(2) of the Code;

(b)

To allow extension of Personal Insolvency Resolution Process Period for additional 201 (two hundred and one) days i.e., from 29 June 2025 to 15 January 2026 facilitating the completion of the PGIRP in a meaningful manner, particularly when the Repayment Plan submitted by the Personal Guarantor, Manisha S Patil is already pending consideration before this Hon'ble Tribunal;

(c)

Condone the delay of 193 days in filing the present application in filing the present extension application for the period from 29 June 2025 to 07 January 2026;

(d)

Issue such other orders as may be necessary in the matter.”

3.

Adjudicating authority by the impugned order has rejected the application observing that moratorium cannot be extended by the Court.

4.

Appellant submits that present was not a case for prayer of extension of moratorium, rather time was prayed for extension of process, since the repayment plan has been approved by the 100% vote shares.

5.

Submission needs scrutiny. Issue notice. Appellant to provide mobile Nos./e-mail address of the respondents. Notice be issued through e-mail or any other available mode. Requisites along with process fee be filed within two days.

6.

Appellant is permitted to implead the financial creditors as respondents to the appeal. Let the amended memo be filed by the appellant by tomorrow.

7.

Appellant also undertakes to serve the creditors personally and file an affidavit of service on the next date. List these appeals on 09^th February, 2026.”

“19. Filing with the Adjudicating Authority.–

(1)

The resolution professional shall file the repayment plan, as approved by the creditors, along with the report mentioned in sections 106 or 112, as the case may be, with the Adjudicating Authority on or before completion of one hundred and twenty days from the resolution process commencement date.

(2)

The resolution professional shall provide the copies of the documents filed with the Adjudicating Authority under sub-regulation (1) to the guarantor and the creditors, within three days from the date of such filing.”

“101. Moratorium.

(1)

When the application is admitted under section 100, a moratorium shall commence in relation to all the debts and shall cease to have effect at the end of the period of one hundred and eighty days beginning with the date of admission of the application or on the date the Adjudicating Authority passes an order on the repayment plan under section 114, whichever is earlier.

(2)

During the moratorium period—

(a)

any pending legal action or proceeding in respect of any debt shall be deemed to have been stayed;

(b)

the creditors shall not initiate any legal action or legal proceedings in respect of any debt; and

(c)

the debtor shall not transfer, alienate, encumber or dispose of any of his assets or his legal rights or beneficial interest therein;

(3)

Where an order admitting the application under section 96 has been made in relation to a firm, the moratorium under sub-section (1) shall operate against all the partners of the firm.

(4)

The provisions of this section shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

114. Order of Adjudicating Authority on repayment plan.–

(1)

The Adjudicating Authority shall by an order approve or reject the repayment plan on the basis of the report of the meeting of the creditors submitted by the resolution professional under section 112:

Provided that where a meeting of creditors is not summoned, the Adjudicating Authority shall pass an order on the basis of the report prepared by the resolution professional under section 106.

(2)

The order of the Adjudicating Authority approving the repayment plan may also provide for directions for implementing the repayment plan.

(3)

Where the Adjudicating Authority is of the opinion that the repayment plan requires modification, it may direct the resolution professional to re-convene a meeting of the creditors for reconsidering the repayment plan.

115. Effect of order of Adjudicating Authority on repayment plan.–

(1)

Where the Adjudicating Authority has approved the repayment plan under section 114, such repayment plan shall—

(a)

take effect as if proposed by the debtor in the meeting; and

(b)

be binding on creditors mentioned in the repayment plan and the debtor.

(2)

Where the Adjudicating Authority rejects the repayment plan under section 114, the debtor and the creditors shall be entitled to file an application for bankruptcy under Chapter IV.

(3)

A copy of the order passed by the Adjudicating Authority under sub-section (2) shall be provided to the Board, for the purpose of recording an entry in the register referred to in section 196.”

“8.

The details / report containing, inter alia, list of creditors, who voted "For", "Against" or "Abstained from voting" on each of the resolutions put to vote, were obtained from email as per e-voting via email and the result of the e-voting is as follows:

“19.

While Section 14 of the Code provides for a moratorium lasting until the completion of the Corporate Insolvency Resolution Process (CIRP), which is amenable to extension beyond 180 days, no such provision exists in the context of the Personal Insolvency Resolution Process. The Scheme of I&B Code in relation to PIRP process is to complete the process within 180 days and it does not provide for any mandatory consequence as is contemplated in Section 33(1) of the Code, in the context of CIRP process. Hence, we are of the considered view that the Scheme of Code neither contemplates PIRP beyond moratorium nor an order for extension of time in PIRP Period.

20.

In view of the above facts and circumstances, it is noted that the extension of 201 days in this PIRP process from 29.06.2025 to 15.01.2026 cannot be granted since the provisions of the Code does not empower this Tribunal to grant extension in respect of PIRP process. The Applicant may take necessary actions in compliance with the provisions of the Code and regulations.”

“2.

Brief facts necessary to be noticed for deciding the Appeal are:

vii.

On 28.10.2024, RP was authorised to file an appropriate Application for extending PIRP by 90 days beyond 180 days.

viii.

Appellant thereafter filed an I.A. 5719/2024 seeking extension of the PIRP by 90 days beyond 180 days, which Application came to be rejected by Adjudicating Authority on 04.12.2024, by which Application, the Adjudicating Authority has granted 90 days extension to complete the process, however, no views were expressed on the Moratorium.”

“21.

When we look into the statutory scheme of the IBC, it is clear that Interim Moratorium is kicked in as soon as Application is filed under Section 94 and Section 95 by virtue of statutory provision under Section 96 that Moratorium continues till an Order is passed under Section 100 for admission of rejection of the Application. Section 101 provides that when Application is admitted further Moratorium of 180 days shall commence which shall come to an end on the date Adjudicating Authority passes an Order on the Repayment Plan under Section 114 or 180 days whichever is earlier. The language of Section 101(1) is plain and clear, outer limit of Moratorium is prescribed by providing that 180 days from date of commencement of admission of the Application or an Order is passed by the Adjudicating Authority on the Repayment Plan under Section 114 whichever is earlier thus on happening of the eventuality as prescribed as Section 101(1) Moratorium comes to an end. Conceding any power to the Adjudicating Authority or this Tribunal to extend the said period shall be plainly against the statutory scheme of Section 101(1). When the statutory scheme is clear and unambiguous, there is no role of any interpretive process to find out the jurisdiction of NCLT to extend the period of Moratorium when statute provides a date for cessation of the Moratorium it cannot be extended by the Adjudicating Authority or by this Tribunal against the statutory intendment under Section 101(1).”

“2.

These appeals have been against the same order dated 23.05.2025 passed in IA No. 2477 of 2025 by which order the application filed by RP to extend the time for completion of Personal Insolvency Resolution Process by 30 days have been rejected. The Personal Insolvency Resolution Process against the personal guarantor commenced on 10.07.2024. Personal Guarantor has submitted a repayment plan on 10.10.2024 and the meeting of CoC was called by the RP. Ld. Counsel for the appellant submits that there are large number of Financial Creditors i.e; Banks who had to vote on the repayment plan and on the request received from FCs the Adjudicating Authority was requested to extend the period and the Adjudicating Authority has extended the period for completion of personal insolvency resolution Process till 19th May, 2025. It is submitted that 11th CoC Meeting was convened on 15.05.2025 which noticed that voting has already commenced from 10.03.2025 and about 61% of members have cast their votes and 39% of members were still to cast their votes. State Bank of India and the Union Bank requested for 30 days more time to complete their voting on account of new policy which was introduced. Under the heading “to consider filing of timeline extension application in view of voting time required by sub-creditors delayed detailed deliberation took place” it was notice in the minutes that to facilitate further extension of the voting period PIRP must be extended by the additional 30 days and the current PIRP period is scheduled to conclude on 19.05.2025. The Central Bank has suggested to put the resolution for extending the PIRP period to vote and the said resolution was approved resolving to seek extension by 30 days. Consequent, to said resolution passed on 15.05.2025 application was filed by the RP for extension. The prayer was to grant extension, in application was filed by the RP following prayer was made:-

“Prayer:-

In the aforesaid facts and circumstances, it is most humbly and respectfully prayed that this Hon'ble Tribunal may be pleased to:

i.

Grant extension of 4th extension of 30 days from 20.05.2025 till 19.06.2025 in the PIRP period to vote on the resolution plan and submit his report in terms of section 112 of IBC, 2016;

ii.

Pass such order or directions as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the case.” which application came to be rejected by the impugned order. Adjudicating Authority while rejecting the application has made observations at pg-46:-

“we have already shown enough indulgence in extending the period of IRP time and again. However, there appears to be a lack of seriousness in the attitude, conduct, and approach of the parties concerned. We have developed the semblance that they are taking the procedure before this Tribunal for ride.”

“6.

In the facts of the case where repayment plan is to be voted and voting has been going and 61% had been voted and request was only made by SBI and Union Bank of India for 30 days in response to which the application was filed. We do not approve the observations of the Adjudicating Authority that there appears to be lack of seriousness in the attitude conduct and approach of the parties concerned. The personal guarantor after having submitted repayment plan it was for the CoC to vote and take a decision thereafter. We thus are of the view that order rejecting the application cannot be sustained, in result the order dated 23.05.2025 in IA No. 2477/2025 is set aside we allow extension of 30 days for completing the e-voting on the repayment plan. RP to take necessary steps for complete the voting within 30 days from today after conclusion of voting further steps shall be taken for correspondence. The RP has suggested that in view of the voting having been disrupted all creditors be asked to vote. Let RP issue necessary appropriate notices to all creditors for voting.”

“13.

The provisions of Section 54D(1) provide PPIRP shall be completed within a period of 120 days from the PPIRP commencement date. Sub-Section (3) of Section 54D further provides when no Resolution Plan is approved by the CoC within time period referred to in sub-Section (ii) RP shall, on the day after the expiry of such period, file an Application with the Adjudicating Authority for termination of PPIRP.

14.

The question to be answered in this Appeal is as to whether maximum time period of 120 days provided for completion of process is mandatory and on completion of the time period, the PPIRP has to be terminated and after 90 days in event, the Resolution Plan was not approved, RP has to file an Application for termination of the proceeding.”

“19.

We may also notice the Judgment of the Hon’ble Supreme Court in the matter of `Committee of Creditors of Essar Steel India Ltd.’ Vs. `Satish Kumar Gupta & Ors.’ in (2020) 8 SCC 531, in which case Hon’ble Supreme Court had occasion to consider the provisions of Section 12 of the IBC. Section 12 of the IBC came to be amended by adding second proviso by Act 26/2019, which provided that Corporate Insolvency Resolution Process (`CIRP’) shall mandatorily be completed within a period of 330 days from the insolvency commencement date. The second proviso of Section 12 provides as follows:

“….Provided further that the corporate insolvency resolution process shall mandatorily be completed within a period of three hundred and thirty days from the insolvency commencement date, including any extension of the period of corporate insolvency resolution process granted under this section and the time taken in legal proceedings in relation to such resolution process of the corporate debtor….”

20.

The Hon’ble Supreme Court had occasion to consider the said second proviso in `Committee of Creditors of Essar Steel India Ltd.’ (Supra). The second proviso which provided for mandatory completion of CIRP within 330 days came for consideration before the Hon’ble Supreme Court in the above case and Hon’ble Supreme Court has struck down the word “mandatorily”. It was held by the Hon’ble Supreme Court that in appropriate case even after 330 days, Adjudicating Authority or Appellate Tribunal can extend the period. It is useful to extract following observations in Paragraph 127 of the Judgment:

“127.

…..Thus, while leaving the provision otherwise intact, we strike down the word “mandatorily” as being manifestly arbitrary under Article 14 of the Constitution of India and as being an excessive and unreasonable restriction on the litigant's right to carry on business under Article 19(1)(g) of the Constitution. The effect of this declaration is that ordinarily the time taken in relation to the corporate resolution process of the corporate debtor must be completed within the outer limit of 330 days from the insolvency commencement date, including extensions and the time taken in legal proceedings. However, on the facts of a given case, if it can be shown to the Adjudicating Authority and/or Appellate Tribunal under the Code that only a short period is left for completion of the insolvency resolution process beyond 330 days, and that it would be in the interest of all stakeholders that the corporate debtor be put back on its feet instead of being sent into liquidation and that the time taken in legal proceedings is largely due to factors owing to which the fault cannot be ascribed to the litigants before the Adjudicating Authority and/or Appellate Tribunal, the delay or a large part thereof being attributable to the tardy process of the Adjudicating Authority and/or the Appellate Tribunal itself, it may be open in such cases for the Adjudicating Authority and/or Appellate Tribunal to extend time beyond 330 days. Likewise, even under the newly added proviso to Section 12, if by reason of all the aforesaid factors the grace period of 90 days from the date of commencement of the Amending Act of 2019 is exceeded, there again a discretion can be exercised by the Adjudicating Authority and/or Appellate Tribunal to further extend time keeping the aforesaid parameters in mind. It is only in such exceptional cases that time can be extended, the general rule being that 330 days is the outer limit within which resolution of the stressed assets of the corporate debtor must take place beyond which the corporate debtor is to be driven into liquidation.”

21.

The above Judgment of the Hon’ble Supreme Court clearly indicates that where legislature provided for mandatorily completion of CIRP within 330 days the word “mandatory” was struck down and it was held that in appropriate cases, Adjudicating Authority shall have jurisdiction to extend the time beyond 330 days.”

“29.

When we look into the provisions of Section 54D, it is clear that the provision does not contemplate any automatic termination of the PPIRP, the provision contemplates for filing of an Application by RP seeking termination of the process. The discretion of the Court is very well contemplated in the Scheme of the Statutory Scheme and Adjudicating Authority is free to exercise its statutory discretion while ordering termination of the proceeding. Thus, even if period of 120 days has been passed and the question of termination of proceeding comes for consideration before the Adjudicating Authority. Adjudicating Authority on sufficient reason can refuse termination and the proceeding and extend the period, which shall be within its jurisdiction. The Adjudicating Authority has taken the view in the Impugned Order that when the Resolution Plan is not approved within 90 days, RP was obliged to pray for termination of the proceeding and after expiry of 120 days, proceedings have to be terminated.”