The resolution process must be completed Time limit prescribed by the IBC, any deviation would defeat the purpose, in order to provide a time limit: SC

0


Resolution process - IBC - Supreme Court - Taxscan

The Supreme Court ruled that the entire resolution process must be completed within the time limit stipulated by Article 12 of the Insolvency and Bankruptcy Code and that any deviation would defeat the purpose and aim to provide a deadline.

Pursuant to a request made under article 7 of the Insolvency and Bankruptcy Code, 2016, the corporate insolvency resolution process was initiated against Amtek Auto Limited, debtor company on 24.07.2017 . A resolution professional has been appointed. An announcement was published by the resolution professional inviting potential resolution candidates to submit a resolution plan by 08/31/2017. The resolution plans submitted by the Respondents have been reviewed by the Amtek Auto Limited Creditors Committee through the Corporation Bank (COC). However, the Respondent withdrew his resolution plan and, therefore, Liberty’s revised plan was reviewed and approved by the COC on 2.4.2018. Subsequently, the resolution plan submitted by Liberty was approved by the National Company Law Tribunal, Chandigarh Bench, Chandigarh. However, the successful resolution applicant, Liberty, failed to act in accordance with the approved resolution plan. Subsequently, a number of proceedings were initiated against the successful resolution applicant, Liberty.

The division bench of Judge MRShah and Judge Sanjiv Khanna held that the approved resolution plan must be implemented as soon as possible and this is the mandate of the IBC. In accordance with Article 12 of the IBC, subject to subsection (2), the corporate insolvency resolution process must be completed within 180 days from the date of admission of the application for ‘opening of such a process, which can be extended for a further period. 180 days. In accordance with the provision of Article 12 of the IBC, which was inserted by Law 26 of 2019, the insolvency resolution process must be completed within 330 days from the start date. insolvency, including any extension of the period of corporate insolvency resolution process granted under Article 12 of the IBC and the time taken in legal proceedings in connection with that process of resolving the insolvency. debtor company. In accordance with the third provision of Article 12 of the IBC, which is also inserted by Law 26 of 2019, when the insolvency resolution process of a debtor company is in progress and has not been completed within the timeframe indicated above, i.e. within 330 days, this resolution process must be completed within 90 days from the date of entry into force of the IBC amending law , 2019, i.e. 16.08.2019.

“The entire resolution process must be completed within the time limit set out in Article 12 of the IBC and any deviation would defeat the object and purpose of providing such a time limit. However, by previous order, the delay was tolerated in view of the various pending disputes between the parties and the particular facts and circumstances of the case. Therefore, any further delay in the implementation of the approved resolution plan submitted by DVI which as such was approved by the contracting authority in July 2020 and even the appeal against it was rejected by thereafter, any further delay would defeat the very object and purpose of providing a specific time frame for the completion of the insolvency resolution process, as mandated under Article 12 of the IBC ”, the court added.

The Apex Court ordered all parties involved in the approved resolution plan and / or related to the implementation of the approved resolution plan, including IMC, to complete the implementation of the approved resolution plan, within four weeks from today, without fail. It is further directed and it goes without saying that upon implementation of the approved resolution plan and even according to the approved resolution plan, an amount of Rs. 500 crores now deposited by the DVI-successful resolution applicant is transferred. to the respective lenders / financial creditors in accordance with the approved resolution plan and / or as mutually agreed upon. Any failure by either party to implement the approved resolution plan within the timeframe provided above will be taken very seriously.

Subscribe to Taxscan AdFree to see the judgment

Support our journalism by subscribing to Taxscan without advertising. follow us on Telegram for quick updates.



Share.

Comments are closed.