DISCUSSION SUMMARY

(21.01.2022)

I. DISCUSSION POINTS IN WCRC –

a. OUR POSITION AS OF NOW IN VIEW OF FAILURE TO SEEK EXTENSION

Answer-

One year of the Liquidation Period has got over on dd/mm/yyyy. Since, the ongoing
litigation before the Hon’ble NCLT in the captioned matter is pending for adjudication
and the vehicle owned by the Corporate Debtor has still not been sold. There is no other
task which needs to be done by the liquidator. Once the vehicle is sold, the liquidator can
distribute the sale proceeds and can file an application for dissolution.

The matter has not been heard on various occasions due to paucity of time, COVID-19
lockdown and other matters not in control of the Hon’ble NCLT. An application was
filed on dd/mm/yyyy vide IA no xxxx/2020 seeking exclusion/extension of 192 days. The
192 days have completed on dd/mm/yyyy.

Extension/Exclusion should have been applied in due course.

b. CONSEQUENCES OF FAILURE TO SEEK EXTENSION

Answer-

There is no such penalty or punishment envisaged in the Code nor any judgement or
order has been passed by the Hon’ble Adjudicating authority, if the liquidator has not
filed the extension application. However, IBBI may initiate any action due to this failure.

c. REMEDIES
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Answer-

It has been decided during the meeting that an application for dissolution may be filed
with the Hon’ble AA along with seeking suitable exclusion. Other payers shall be :

a. Directing ICICI Bank and HDFC Bank to remit their respective shares of CIRP Cost
and Liquidation Cost
b. Dispose of the Vehicle and Share the sale proceeds of the Vehicle amongst
themselves

CONCLUSION

The above matter was discussed in detailed and it was held that an application seeking,
exclusion of time, extension of time and dissolution of the Corporate Debtor should be
filed before the adjudicating authority as the Corporate Debtor is having only one asset
remaining to be sold (Car) and the value of the said vehicle can be considered as NIL as
the said vehicle is a 2009 model Mercedes and cannot be plied on roads in DELHI/NCR
as Diesel vehicles having age of more than 10 years are banned. Furthermore, as per the
order of Hon’ble NCLT dated 22.10.2018, the possession of the said vehicle was to be
handed over to the HDFC bank and directions were given to dispose of the said vehicle
but no action till date has been taken by both the banks. It was also discussed that the
prayer will include the payment towards the Corporate Insolvency Resolution Process
cost and liquidation cost along with the dissolution of the Corporate Debtor

II. SUMMARY OF DISCUSSION IN GSPL:

a) AS 330 DAYS EXPIRED ON 22.02.2021, WERE WE REQUIRED TO FILE AN

EXTENSION APPLICATION?
b) CAN THE RP CONTINUE AS THE RP IN ABSENCE OF ANY EXTENSION
ORDER?
In order to answer (a), we will need to briefly look at the list of dates to understand
the sequence of events. A brief list of dates is as follows:
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Date Particulars
20.01.2020 CIRP Commencement Date
18.07.2020 180th Day of CIRP
14.10.2020 NCLT granted exclusion of 69 days and extension by 90 days
25.09.2020 180th day, after exclusion of 69 days
24.12.2020 270th Day of CIRP
11.02.2021 We had filed application for another exclusion for time lost in lockdown
last year, which was rejected.
22.02.2021 330th Day of CIRP, CoC passed a resolution for liquidation of the
Corporate Debtor
16.04.2021 NCLT directed CoC to open the resolution plan of OBSPL within a
week’s time. A CoC was convened on 22.04.2021 for this purpose.
22.04.2021 In compliance of the order dated 16.04.2021, tenth CoC meeting was held
wherein the resolution plan was opened. CoC meetings were thereafter
organized to discuss and negotiate the terms of the resolution plan.
21.05.2021 Eleventh CoC meeting was held whereby the matter of extension was
discussed with the CoC. However, the CoC was of the opinion that as the
continuation of CIRP is based on the orders of the Hon’ble AA, there is
no requirement to seek time extension.
29.06.2021 CoC approved the Resolution Plan by OBSPL
09.07.2021 LOI signed and performance security deposited by OBSPL
13.07.2021 Plan approval application filed before Hon’ble NCLT
20.10.2021 Hon’ble NCLT dismissed the liquidation application as being
“infructuous” as application for approval of resolution plan had been
filed.

Liquidation of the Corporate Debtor was approved by the CoC on the 330th day of CIRP,
i.e. 22.02.2021 and an application for initiation of liquidation was filed before the
Hon’ble NCLT on 22.03.2021. However, by order dated 16.04.2021, the NCLT directed
the CoC to open the resolution plan of OBSPL within a week’s time. A CoC was
convened on 22.04.2021 for this purpose. Another CoC meeting was convened on
21.05.2021, wherein the issue of extension was discussed and the CoC decided as
follows:
“The Chairman also informed that, since the 330 days of the CIRP period has
been expired and the RP is obliged to file an extension application before the
Hon’ble NCLT, New Delhi. The CoC members were of the opinion that the
meeting is held exclusively to discuss the Revised Resolution Plan as submitted
by the Resolution applicant on the directions of Hon’ble NCLT, hence the CoC
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was of the opinion that there is no specific requirement for filing the extension
application.” (Emphasis Supplied)
Section 12 (2) of the IBC states as follows:
“(2) The resolution professional shall file an application to the Adjudicating
Authority to extend the period of the corporate insolvency resolution process
beyond one hundred and eighty days, if instructed to do so by a resolution passed
at a meeting of the committee of creditors by a vote of sixty-six per cent. of the
voting shares.”
In absence of approval for extension of time by the CoC, an application in this regard
could not have been moved.
Further, a harmonious reading of the order dated 20.10.2021, whereby the liquidation
application of the Corporate Debtor was dismissed as being “infructuous”, it is concluded
that an extension application is not required to be filed.
In order to answer question (b) reference may be had to section 23 (1):
“(1) Subject to section 27, the resolution professional shall conduct the entire
corporate insolvency resolution process and manage the operations of the
corporate debtor during the corporate insolvency resolution process period:
Provided that the resolution professional shall continue to manage the
operations of the corporate debtor after the expiry of the corporate
insolvency resolution process period, until an order approving the
resolution plan under sub-section (1) of section 31 or appointing a
liquidator under section 34 is passed by the Adjudicating Authority.”
(Emphasis Supplied)
A reading of the proviso above clarifies that the RP is to continue managing the
operations of the corporate debtor until either an order approving the resolution plan or
appointing a liquidator, is passed by the NCLT/NCLAT. Accordingly, the RP can
continue to charge his professional fees.

III. SUMMARY OF DISCUSSION IN UTM:

An application for extension of time for completion of liquidation was already filed on
13.10.2021, wherein, 120 days-till 11.02.2022, were sought for completion of the
liquidation process. The said application is yet to be listed. The application for approval
of sale as a going concern is also pending with Hon’ble NCLT since 19.07.2021.

It has been decided that an exclusion application will be filed before the end of
January2022 in order to exclude the time taken in deciding the bid approval application.