Sucharitha R., J
Order pronounced through Video Conferencing on 09.07.2020 :
This application IA/458/2020 has been filed by the erstwhile Promoter-Directors of the Corporate Debtor M/s. Topknit Processing Mill Private
Limited under section 60(5) of the Insolvency and Bankruptcy Code, 2016 for the following reliefs:
a)Stay of the 4th CoC meeting of the Corporate Debtor to be held on 08.07.2020 in so far as passing any resolution for liquidation of the Corporate
Debtor;
b) the CoC of the Corporate Debtor from approving any resolution for liquidation of the Corporate Debtor;
c) to permit the Applicant to submit his Resolution Plan for the Corporate Debtor; and
d) To pass such other orders as this Hon 'ble Tribunal may deem fit and expedient under the circumstances of the case and thus render justice "".
2. The main application IBA/902/2019 has been filed under Section 9 read with Rule 6 of the Insolvency and Bankruptcy Code, 2016 for initiation of
CIRP process and this Tribunal has admitted the Application vide Order dated 21.11.2019 for commencement of CIRP process.
3. This application IA/458/2020 has been filed by the erstwhile Directors seeking stay of the 4th CoC meeting to be held on 08.07.2020, to prevent the
CoC from passing the order of liquidation of the Corporate Debtor.
4. The Learned Counsel for the Applicant states that due to Covid-19 crisis, there has been a lock down and hence moratorium should be applicable
for the CIRP process.
5. The Learned Counsel for the Applicant states that the erstwhile Promoter- Directors shall try to bring in successful Applicant with a Resolution
Plan. Hence the Applicant does not want an order of liquidation to be passed by the CoC.
Therefore, this Application is filed for stay of the 4th CoC meeting. The Respondent has filed its reply.
6. The Learned Counsel for the Respondent/Resolution Applicant states that Expression of Interest was published on 08.02.2020 which expired on
23.02.2020.
7. The Learned Counsel for the Respondent states that no application with respect to Expression of Interest was received and there were also no
takers for the Corporate Debtor and the lock down commenced only on 25.03.2020. However, period for submitting the Expression of Interest had
expired on 23.02.2020 much before the Covid-19 crisis and hence the CIRP process is in its completion stage.
8. Apparently, this application has been filed by the erstwhile Directors only to delay/defeat the purpose of CIRP process.
9. The Learned Counsel for the Applicant has stated that in terms of Section 40(c), the proceedings of the CoC are also be stayed during the period of
moratorium. However, it is seen that the amended Section 40(c) only seeks to exclude the period of lock down due to the restrictions imposed in the
wake of Covid-19 out-break shall not be accounted for the purpose of the timeline for any activity that could not be completed due to such lock down.
It is only an enabling provision to extend the period for resolution process and not to act as a stay in all proceedings undertaken in pursuance of the
resolution process.
10. This application filed by the erstwhile Directors u/s 60(5) of the Insolvency and Bankruptcy Code, 2016 seeking time to bring in Resolution
Applicant itself is barred by law and the erstwhile Directors have no stake or say in the CIRP process. It is for the CoC, in their commercial wisdom
to decide the same. Hence, this application seeking to stay the 4th CoC meeting is not maintainable.
11. Having heard both the parties, we do not find any merit in the application.
12. Hence for the reasons stated above, this IA/458/2020 stands dismissed.
