In the matter of D Chhaganlal and Company V/s Say India Jeweller Pvt Ltd, the Mumbai Bench of the NCLT observed that the time taken from the stage of admission of the petition in the NCLT till the appointment of the Insolvency Resolution Professional (IRP) can be excluded from the timelines specified under the Insolvency and Bankruptcy Code (IBC). In the said matter, there was a delay of about 62 days in the appointment of the IRP as the admission of the application was on 1st August 2018 and the appointment took place on 3rd October 2018. The IRP placed reliance on the judgments of Bhushan Power & Steel Ltd, RBL Bank Limited Vs MBL Infrastructure Ltd Adhunik Alloys & Power Limited along with the judgment of the NCLAT in Quinn Logistics India Pvt. Ltd. V/s. Mack Soft Tech Pvt. Ltd, which held that:

“From the decisions aforesaid, it is clear that if an application is filed by the ‘Resolution Professional’ or the ‘Committee of Creditors’ or ‘any aggrieved person’ for justified reasons, it is always open to the Adjudicating Authority/Appellate Tribunal to ‘exclude certain period’ for the purpose of counting the total period of 270 days, if the facts and circumstances justify exclusion, in unforeseen circumstances.”

Furthermore, on the issue of rejection of the rejection of resolution plan proposed by the suspended directors of the corporate debtors, the NCLT held that preference should be given to resolution plans over liquidation in view of the judgment of the NCLAT in Binani Industries Limited v. Bank of Baroda & Anr. Which held that:

“The Purpose of Resolution is for maximisation of value of assets of the ‘Corporate Debtor’ and thereby for all creditors. It is not maximisation of value for a ‘stakeholder’ or ‘a set of stakeholders’ such as Creditors and to promote entrepreneurship, availability of credit and balance the interests. The first order objective is “resolution”. The second order objective is “maximisation of value of assets of the ‘Corporate Debtor’’ and the third order objective is “promoting entrepreneurship, availability of credit and balancing the interests”.

The Bench approved the resolution plan of the suspended directors of the corporate debtors and called for the acceptance report of the Resolution Applicant on the next date. It further held that in case the amended resolution plan was not approved, then the next stage would be initiation of liquidation proceedings.

 

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Order: D Chhaganlal & Co Versus Say India Jewellwers Pvt Ltd