Whether a Promoter/Director of the Corporate Debtor Company is entitled to file Extension of time for completion of the Insolvency Resolution Process under IBC Code 2016.

Whether a Promoter/Director of the Corporate Debtor Company is entitled to file Extension of time for completion of the Insolvency Resolution Process under IBC Code 2016.

Santosh Dhiraj Pathak, Promoter (Gujarat Oleo Chem ltd.

V/s.

Anil Goel, RP & Ors.

ISSUE

Whether the Applicant, being Promoter/Director of the Corporate Debtor Company is entitled to file this Application under Section 60(5)(c) read with Section 12 of the IB Code and Rule 11 of the NCLT Rules and Whether time can be extended for completion of the Corporate Insolvency Resolution Process ?

FACTS

TIME LINE OF RESOLUTION OF INSOLVENCY PROCEEDINGS

Normal Route	IRP is to be completed within 180 days and an extension of time will be granted up to 90 days and this will be only once. 180 days + 90 Days = 270 days
Fast Track Route	90 days + 45 days =135 days

When an order for initiation of Insolvency is issued by NCLT , the power of board of directors of the corporate debtor is suspended and the management of the company is to be run the Insolvency Resolution Person.

When the Board of Directors of the company is not in existence , the director of the corporate debtor does not have any authority to ask for any extension.

Time Line for Completion of Insolvency Resolution Process 

FILING OF APPLICATION TO NCLT
Admission of application and Declare Moratorium	0 to 14 days
Appointment of IRP	14th day
Public Announcement	15 & 16th day
Liquidation Value	17 to 21st day
IRP to constitute COC and to submit a report	30 to 44  days
Creditors to submit their claim	37th Day
1st CoC meeting	51 day
Preparation of Information Memorandum (IM)	65th day
COC ‘s Approval of Resolution Plan	---
Submission of Resolution plan	66 to 150th Day
	---
Application for NCLT approval CoC’s approval of resolution plan	170 day
Initiation of liquidation	180 days

DECISION

NCLT Held that:- Sub-section (2) of Section 12 of the Code clearly lays down that it is only the Resolution Professional who can file an Application to the Adjudicating Authority to extend the duration of Corporate Insolvency Resolution Process beyond 180 days on the basis of Resolution passed at a meeting of the Committee of Creditors by a vote of 75 per cent of the voting shares.

 As we refer to the Fourth Meeting of the Committee of Creditors of Gujarat Oleo Chem Limited held on 19th day of September, 2017. In Agenda No.4 of the said Resolution, it is mentioned that the Resolution which has been proposed by the Promoter was discussed in the Meeting and resolved not to accept the Resolution Plan put forward by the Promoter/Director and asked the Promoter/Director to propose an improved Plan within 30 days On Agenda No.3, the Committee of Creditors resolved that Mr. Anil Goel, Resolution Professional is instructed to file an Application before the National Company Law Tribunal, Ahmedabad under Section 12(2) of the IB Code for approval of extension of the duration of Corporate Insolvency Resolution Process. 

But, no such Application is filed by the Resolution Professional Mr. Anil Goel so far. This Application filed by the Promoter/Director is not in accordance Section 12(2) of the Code and not in accordance with the Resolution on Agenda No.3 of the 4th Meeting of the Committee of Creditors held on 19th September, 2017. Thus as Applicant is not qualified under Section 12 of the Code, the jurisdictional function of this Adjudicating Authority under Section 60(5)(c) of the Code cannot be invoked by the Applicant Promoter/Director.