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Litigation period is excluded from 270 days in Insolvency

Viral Doshi 
on 21 May 2018

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Insolvency Commencement Date: 11 Aug 2017
CIRP ends on: 07 Feb 2018

AA vide its order dated 16 Jan 2018 extended the period of CIRP beyond 180 days for a further period of 90 days.

AA vide its order dated 15 Sep 2017 directed the CoC to keep its proceedings pending till the next date of hearing of the case.

AA vide its order dated 31 Jan 2018 directed the Resolution Professional not to convene the CoC meeting till the next date of hearing

AA vide its order dated 28 Feb 2018 permitted the Resolution Professional to go ahead with the convening of ensuing meetings of CoC of the Corporate Debtor and accordingly modified the interim order dated 31 Jan 2018.

Learned Counsel appearing for the FC and RP represented that for about 160 days the proceedings could not be taken up by the CoC in view of said order and it virtually resulted in stay of the CIRP Process.

In the context, the Learned counsel appearing on behalf of CoC and FC submitted that they have no objections if the CIRP period is extended till the next date of hearing.

Learned Counsel appearing for the FC and RP represented that period of litigation shall be excluded from the CIRP period from calculating the period of 270 days

NCLAT decision:

It is clear that if an application is filed by the Resolution Professional or the CoC or any person aggrieved person for justified reasons it is always open to AA to exclude certain period for the purpose of counting the total period of 270 days.

For example- For the computing 270 days unforeseen circumstances  are excluded which are as follows:

1. If the CIRP is stayed by a court of law or the AA or the NCLAT or the HC or the Hon’ble SC

2. If no Resolution Professional is functioning for one or other reason during the CIRP such as removal

3. The period between the date of order of admission/moratorium is passed and the date of receipt of the certified order by the IRP (in this case period between 11 Aug 2017 to 21 Aug 2017 is excluded-10 days is excluded from 270 days)

4. On hearing a case if order is reserved by the AA or the NCLAT or the HC or the SC and finally pass order enabling the RP to complete the CIRP

5. If the CIRP is set aside by the NCLAT or order of the Appellant Tribunal is reversed by the Hon’ble Supreme court and CIRP is restored.

6. Any other circumstances which justifies exclusion of certain period.


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