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Judgment
16.07.2025: Heard learned counsel for the appellant as well as learned counsel appearing for the Resolution Professional (RP).
This is an appeal praying for setting aside the order passed by the adjudicating authority dated 25.06.2025, by which I.A. 261/MP/2025 filed by the RP praying for extension of 30 days time and exclusion of 148 days from CIRP timelines has been rejected.
Brief facts of the case necessary to be noticed for deciding the appeal are:
Corporate Insolvency Resolution Process (CIRP) of the corporate debtor M/s. Shri Ram Switchgears Limited commenced on 29.02.2024. In the CIRP process, resolution plans were invited.
The adjudicating authority has granted two extensions with effect from 28.08.2024 and 25.11.2024. Admittedly, the last extension was granted to the CIRP till 24.05.2025.
Before 24.05.2025 the Committee of Creditors (CoC) in its 15th CoC meeting held on 09.05.2025 to 14.05.2025 with 96.94% vote shares resolved to seek extension of 30 days from 24.05.2025 and exclusion of 148 days from the CIRP timelines due to the delay caused by the Interim Resolution Professional (IRP) replacement process.
In the 15th CoC meeting PRA has presented revised resolution plan with increased amount but additional time was required for submission of signed copies of plan and pending compliance for which decision was taken to seek extension.
Learned counsel for the appellant submits that in the 16th CoC meeting which was held on 21.05.2025 it was decided to put the resolution plan on voting and voting was to commence on 27.06.2025.
In the meantime, order dated 25.06.2025 has been passed rejecting the prayer for extension due to which the voting in the plan which was to commence on 27.06.2025 could not be completed.
Learned counsel for the appellant submits that it is well settled that the extension beyond 330 days is to be granted only in exceptional circumstances which is a law laid down by the Hon’ble Supreme Court in the matter of ‘Essar Steel India Ltd.’ Vs. ‘Satish Kumar Gupta & Ors.’, in [(2019) ibclaw.in 07 SC], but in the present case before 24.05.2025 which was the last date of CIRP as extended by the adjudicating authority itself, the revised plans were placed by the PRAs and the time was required for filing a signed resolution plan hence, the decision was taken to seek the extension and the present was a case when only voting was to be held. The object of CIRP is resolution of the corporate debtor which resolution has already achieved in the facts of the present case, hence the adjudicating authority erred in rejecting the extension by the impugned order. Learned counsel for the appellant submitted that adjudicating authority in paragraphs 22 & 23 has itself recognised that certain delay of 148 days is attributable to the judicial pendency and the erstwhile IRP’s inaction. It is submitted that despite of the adjudicating authority realising that present is a case where the resolution plans indicate potential for revival, adjudicating authority took a technical view of the matter in rejecting the application.
Learned counsel for the RP also supported the appeal and submitted that application was filed by the RP after resolution by the CoC to seek extension.
We have heard learned counsel for the parties and perused the records.
In the facts of the present case, where adjudicating authority itself has granted extension till 24.05.2025, the period which was completed prior to 24.05.2025 had no relevance to be considered in deciding the application for extension of 30 days which was prayed in the application and exclusion. The adjudicating authority was to focus only on the steps taken by the CoC till 24.05.2025 and has to take a decision, in event, it come to exclusion that no steps have been taken by the CoC till 24.05.2025 so as to achieve the resolution of the corporate debtor.
We are of the view that when prior to 24.05.2025 revised resolution plans were placed by PRAs and only signed plan was required to be filed with the voting to take place. The present was a fit case for extension of 30 days which was prayed for. It is submitted that in view of the rejection of the application voting which was scheduled on 27.06.2025 could not take place and only voting on the plan is still to be completed.
We find sufficient ground for extending the 30 days period from today. We allow the application filed by the RP, grant exclusion of 148 days which was time taken in the judicial process for replacement of the IRP and grant extension of 30 days from today.
Appeal disposed of accordingly.
The RP may after completing the process within 30 days submit the application before the adjudicating authority.