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Judgment
17.07.2025: Heard counsel for the appellant, Ld. Counsel for the Resolution Professional and Ld. Counsel for the Central Bank of India representing the CoC in both the appeals.
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.”
Ld. Counsel for the appellant submits that present is not a case where there was any lack of seriousness in the attitude and conduct of the parties. The application was filed on the resolution of the committee of creditors to seek extension of 30 days since voting on the repayment plan was not concluded although 61% members of committee of creditors already voted. It is submitted that in view of the rejection of the application voting could not be concluded and left inconclusive. It is submitted that 30 days period was required for conclusion of voting and final decision of the resolution plan and by rejection of the application both personal guarantor and the financial creditor shall be put to prejudice.
We have considered submissions made by the counsel for the parties and perused the records.
The minutes of the 15th CoC meeting has been brought on the record, on 15.05.2025 the detailed discussion was noticed, Union Bank of India and State Bank of India has prayed for extension of 30 days since they could not obtain necessary approval for voting due to the new policy implemented in the bank. It was on the request of the Union Bank of India and State Bank of India that decision was taken to seek extension for 30 days and it was also noticed in the minutes that 61% of committee of creditors had already voted and only 39% of voters need to be noticed. It is useful to extract following discussions:-
“The current voting period which was initially set to get over until 8:00 PM on 13th May 2025 was extended until 7:00 PM on 16th May 2025. To facilitate a further extension of the voting period, the PIRP must be extended by an additional 30 days, as the current PIRP period is scheduled to conclude on 19th May 2025. Therefore, the Committee of Creditors (CoC) is required to deliberate and decide on the proposed extension of the PIRP process.
The RP informed the members that, as of the current date, approximately 61 % of the members have cast their votes. The RP emphasized that the Committee of Creditors (CoC) must decide on the extension of the PIRP process and formally vote on the matter in writing. Upon receiving the CoC's decision, the voting timeline will be extended accordingly, subject to approval by the Hon'ble NCLT. To facilitate this process, a resolution will be circulated to the members, who are requested to respond in writing so that the decision can be duly recorded.
The RP presented the current voting status as on the date of the current meeting which is reproduced below: ………..
SBI inquired about the pending votes, to which the RP clarified that only SBI and Union Bank and some other unsecured creditors, are yet to cast their votes, representing approximately 39% of the total votes.
Union Bank stated that their approval is still awaited from higher authorities and expressed that extending the PIRP process timeline would be in the best interest of all parties involved.
SBI explained that their approval process follows a step-by-step procedure, and the delay is due to the implementation of a new policy. They have prepared the necessary note and submitted it for approval and hence they are asking for 30 days extension in the PIRP process.
After all this discussion, Central Bank suggested to put the resolution for extending the PIRP period to vote.
Mr. Shiv Kumar proposed that a minimum of 48 hours be allotted for voting on the resolution for timeline extension. In response, the RP clarified that the voting period on repayment plan is concluding on 16th May 2025 at 7:00 PM. The RP would be required to file an application under Section 112 of the Insolvency and Bankruptcy Code (IBC), 2016, or an application for the extension of the PIRP period, depending on the members' decision. Therefore, the RP requested that all members submit their respective votes via email by 6:00 PM on 16th May 2025.
Members suggested that, instead of conducting a formal vote, their decisions be verbally recorded during the meeting, with subsequent confirmation through the minutes. The RP stated that minutes usually confirmed during the next meeting, and emphasized the necessity of having decisions documented in writing, citing the Hon'ble NCLT's previous reluctance to grant extensions during the last PIRP process extension application.
The CBI inquired about the procedure if the resolution is not approved. The RP clarified that, in such a scenario, the PIRP would automatically conclude on 19th May 2025. Subsequently, the RP would be required to file an application under Section 112 of the Insolvency and Bankruptcy Code (IBC), 201 6. When CBI sought further clarification on Section 1 12, the RP explained that this provision mandates the RP to prepare and submit a report to the Adjudicating Authority detailing the outcome of the creditors' meeting concerning the repayment plan. regardless of whether the plan was approved or not. This report must include information such as the approval status, any modifications, resolutions proposed, voting records, and other pertinent details as deemed appropriate by the RP.
The members unanimously agreed to put the timeline extension agenda to vote. Consequently, the minutes will be shared after incorporating the results of the voting.” The minutes further record that the said decision to seek extension was approved by 51.13% of vote which is recorded in item no.7 and application was filed thereafter.
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.
Both the appeals have been filed by the personal guarantors it is sufficient to refer to the pleadings in CA (AT) (Ins) No. 977 of 2025 for disposing both the appeals.
Both the appeals are disposed of accordingly.