Exclusion of time from CIRP helps restart debtor company operations, such exclusion must be allowed: NCLT

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The Delhi Bench National Company Law Tribunal (NCLT) ruled that time exclusion from CIRP helps in reviving the debtor company’s operations, such exclusion should be allowed.

The caller said the 90-day CIRP exclusion from the CD would save the company from “winding up.” It was also pointed out by the ld. The lawyer that there was a “potential resolution seeker” who submitted his “resolution plan” and that there is a likelihood of relaunch of the CD. Due to the widespread pandemic, there has not been much progress in detaching ED assets in court.

The CoC has also considered the re-issuance of the “Expression of Interest” (EOI) and therefore it is necessary to exclude this period. Ld’s lawyer also pointed out that the Appellant was pursuing legal proceedings to obtain the lifting of the seizure of the sole ownership of the CD before various judicial bodies in order to obtain the release of the property as soon as possible and also cited the judgment of Hon’ble Apex Court in the case of “Creditors’ Committee of Essar Steel India Limited v Satish Kumar Gupta” in which it held that “the arbitration authority or the appellate authority has the discretion to extend the duration of the CIRP period even beyond 330 days in certain exceptional cases”. This is an exceptional case, as revealed by the conclusions of counsel for the Appellant. Undoubtedly, CBI and ED have attached sole ownership of the CD and the matter is in arbitration.

Judicial Member Coram, Judge M.Venugopal and Technical Member, Dr. Ashok Kumar Mishra argued that the 90 day grant helps the corporate debtor to revive, then the basic purpose of the I&B Code, 2016 will be achieved. Liquidation is the last resort. Accordingly, this “tribunal” is of the subjective view that no prejudice will be caused by allowing this appeal to prevent an aberration of justice and further a substantial cause of justice.

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