The practice of exclusion of a particular duration in order to give more time for CIRP beyond 270 days has been adopted by the NCLT benches on various valid grounds. In this case the judge excluded the time taken between submission of the original proposal and subsequent clarifications furnished by the applicant to allow the CoC to examine the revised plan.
It may be recalled that the CoC had refused to examine a revised resolution plan submitted on May 3 by Thriveni Earth Movers, stating that it wasn't given sufficient time to look at the proposal. As the matter was referred back to the NCLT by the RP and was pending before the Hyderabad bench ever since, the process of Lanco's insolvency resolution remained just where it was two months ago.
"As a result, Application is allowed by excluding 16 days for the purpose of counting period of CIRP and thereby allowing the RP/CoC with immediate effect from today to complete the CIRP and further direct the resolution professional to place the revised resolution plan filed by TEPL before the CoC... it is directed to take appropriate decision on the revised plan within the period allowed. The resolution professional is to discharge his functions as usual during this period," the judge said while setting the ball rolling once again in Lanco insolvency resolution case.
Stating that he would be issuing a detailed order in favour of the extension and see how the CoC would respond, the judge also asked the counsel of Vijayawada-based Power Mech Projects, which came forward to propose its own resolution plan to the CoC at this stage, to present his arguments on extension of time for CIRP again in the next hearing.
On July 6, Power Mech's counsel argued that the changes brought in by the Government through a recent Ordinance on Insolvency and Bankruptcy Code (IBC) has revisited the question of who is and who is not eligible to submit a resolution plan in a particular insolvency case and this will provide a scope for the others to reenter the Lanco insolvency resolution process. Interestingly Power Mech had sought an extension of time of 166 days to enable the RP to redo the whole process.
In June 2017 IDBI had taken Lanco Infratech, the holding company of a large power and infrastructure group comprising of dozens of subsidiaries sitting on a combined debt of Rs 500 billion, to NCLT under section 7 of IBC, 2016. Lanco had figured in the first list of a dozen large corporate defaulters that the RBI wanted the banks to initiate an early resolution.