Time period between admission of company for Corporate Insolvency Resolution Process and knowledge of Resolution Professional can be excluded from time limit

In Velamur Varadan Anand vs Union Bank of India, the NCLAT heard an appeal against the order passed by the National Company Law Tribunal, Mumbai Bench (“NCLT”) regarding time period allotted for completing Corporate Insolvency Resolution Process (“CIRP”) under the Insolvency and Bankruptcy Code, 2016 and certain observations made by the NCLT against the Resolution Professional (“RP”).

With regard to the expire of the time limit for the CIRP proceedings, the NCLAT referred to a recent decision of its own in Quinn Logistics India Pvt. Ltd. v. Mack Soft Tech Pvt. Ltd., where the NCLAT held that 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. Among the examples cited by the Ld. Tribunal for exclusion in the said judgment was the period between the date of order of admission/moratorium is passed and the actual date on which the ‘Resolution Professional’ takes charge for completing the corporate insolvency resolution process. It was also mentioned in the judgment that after exclusion of the period, if further period is allowed the total number of days cannot exceed 270 days which is the maximum time limit prescribed under the Code.

In the present case, the case was admitted for CIRP on 16.08.2017, and the RP assumed charge on 14.09.2017, that is 30 days. Therefore the NCLAT directed the NCLT, Mumbai Bench to exclude the said period of 30 days from the limit set to complete the CIRP proceedings and modified the impugned order to that extent.