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Judgment
ORDER
Per: Shri V. Nallasenapathy, Member (Technical)
The Company Petition bearing No. 3505 of 2018 filed against the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the Code) seeking initiation of Corporate Insolvency Resolution Process (CIRP) was admitted by this Tribunal on 26.04.2019.
The Applicants herein are the Successful Resolution Applicants in the CIRP. Their Resolution Plan as approved by the Committee of Creditors (CoC) with 80.35% of voting share was approved by this Tribunal on 03.08.2020.
The Applicants are now before us seeking extension of time in implementation of the Resolution Plan. The following table shows the Original Schedule for carrying out certain obligations by the Resolution Applicants under the Resolution Plan vis-a-vis the Revised Schedule for completion of those obligations:
| Original Schedule | Revised Schedule | ||
| Issuance of NCDs to secured Financial Creditors | 90 days from the Effective Date | Issuance of NCDs to secured Financial Creditors | 150 days from the Effective Date |
| Appointment of New Directors | 90 days from the Effective Date | Issuance of NCDs to secured Financial Creditors | 150 days from the Effective Date |
| Arrangement of working capital facility of Rs. 5.00 Crore | 90 days from the Effective Date | Arrangement of working capital Facility of Rs. 5.00 Crore | 180 days from the Effective Date |
| Issuance of fresh Equity | 90 days from the Effective Date | Issuance of fresh Equity | 120 days from the Effective Date |
| Re-constitution of Board of Directors | 3 Months from Closing | Re-constitution of Board of Directors | 6 months from Closing |
| Setting up of management team and control systems Completion of Definitive Documents Identification of contractors and execution of documents | Date | Setting up of management team and control systems Completion of Definitive Documents Identification of contractors and execution of documents | Date |
| Restarting the factory of the Corporate Debtor | 4th Month onwards | Restarting the factory of the Corporate Debtor | 9th month onwards |
The Applicants submit that as per the Resolution Plan the commencement of the implementation of the Resolution Plan is termed as the Closing Date/Effective Date i.e., 03.08.2020, the date of approval of the Resolution Plan under Section 31(1) of the Code by the NCLT and the obligations of the Resolution Applicants to implement the Resolution Plan shall be from that date.
It is submitted that due to the outbreak of the Covid-19 Pandemic, Resolution Applicants are facing various difficulties in implementing the Resolution Plan as no business is happening in the prevailing scenario. Hence the Resolution Applicants are seeking extension of timeline for implementation of the Resolution Plan without affecting the nature and character of the Resolution Plan.
We have heard the learned Counsel appearing on behalf of Suraksha Asset Reconstruction Limited, one of the Financial Creditors, having 75.72% voting share in CoC and also the beneficiary of the Resolution Plan by way of issuance of NCDs. The learned Counsel expressed ‘No Objection’ for extension of timeline for the implementation of the Resolution Plan.
Thus, considering the facts and circumstances of the case, especially the Covid-19 situation, this Bench is inclined to extend the timeline as indicated in the revised schedule at Para No. 3 supra.
Accordingly, the Application is allowed as prayed for.
The matter is taken up on VC. Counsel for the Applicant is present. No representation for the Respondent. Orders pronounced vide separate orders. The Application is allowed.