“Corporate Insolvency Resolution Process (CIRP) shall be mandatorily completed within 330 days”. Comment.

The preamble to the Insolvency and Bankruptcy Code, 2016 (IBC) gives a thrust to provide an effective legal framework for timely resolution of insolvency and bankruptcy. Hence, Section 12 of IBC lays down a time limit for completion of insolvency resolution process. As per Section 12 (1) of IBC, normally any insolvency resolution process needs to be completed within one hundred and eighty days from the date of commencement of Corporate Insolvency Resolution Process (CIRP) However, as expected no one and even legislation can bind the time. Keeping this in view Section 12 (2) of IBC enables the resolution professional can seek extension after obtaining instructions by a resolution passed at a meeting of the Committee of Creditors by a vote of sixty-six per cent of the voting share. Section 12 (3) of IBC enables the Adjudicating Authority to consider such application to grant extension of CIRP duration for further maximum ninety days. It is provided that any extension of the period of corporate insolvency resolution process under this section shall not be granted more than once. It is further provided that the CIRP shall mandatorily be completed within three hundred and thirty days from the insolvency commencement date, including any extension of the period of corporate insolvency resolution process granted under this section and the time taken in legal proceedings in relation to such resolution process of the corporate debtor. Though, the word 'mandatorily' has been struck down by the Court in the decision in Committee of Creditors of Essar Steel India Limited, Supreme Court has only balanced the interest of all concerned, by permitting an enlargement of the time, only in those cases, where the delay occurs not on account of the fault of the players concerned and it is based on the principle of actus curiae neminem gravabit , which means that the act of Court shall prejudice no one. The Court has not undermined the timeline fixed by the Legislature and, in fact, it has underlined the importance of conforming to the time limit. Speed, indeed, continues to be of the essence of the Code.