The Supreme Court in the matter of Committee of Creditors of Amtek Auto Limited through Corporation Bank v. Dinkar T Venkatsubramanian (Civil Appeal No. 6707 of 2019) decided on 01.12.2021, has observed that the entire resolution process has to be completed within the period stipulated under Section 12 of the Insolvency and Bankruptcy Code, 2016 ("IBC").
The bench comprising of Hon'ble Mr. Justice MR Shah and Sanjiv Khanna, was considering an appeal filed by the Committee of Creditors in the matter of corporate insolvency resolution process initiated against Amtek Auto Limited.
While disposing the appeal filed against NCLAT order, taking note of the fact that, the process was initiated on 24.07.2017, the bench observed that The approved resolution plan has to be implemented at the earliest and that is the mandate under the IBC. As per Section 12 of the IBC, subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of 180 days from the date of admission of the application to initiate such process, which can be extended by a further period of 180 days.
It was further observed that As per proviso to Section 12 of the IBC, which has been inserted by Act 26 of 2019, the insolvency resolution process shall mandatorily be completed within a period of 330 days from the insolvency commencement date, including any extension of the period of corporate insolvency resolution process granted under Section 12 of the IBC and the time taken in legal proceedings in relation 12 to such resolution process of the Corporate Debtor. As per the third proviso to Section 12 of the IBC, which is also inserted by Act 26 of 2019, where the insolvency resolution process of a Corporate Debtor is pending and has not been completed within a period stated hereinabove, i.e., within a period of 330 days, such resolution process shall be completed within a period of 90 days from the date of commencement of the IBC amendment Act, 2019, i.e., 16.08.2019.
However, the bench noticed that, in this matter, the time limit has been condoned in view of the various litigations pending between the parties and in the peculiar facts and circumstances of the case.
Therefore, the bench directed all the concerned parties to complete the implementation of the approved resolution plan, within a period of four weeks from today, without fail.
By - C. George Thomas