BSC Bank filed an application for initiating Corporate Insolvency Resolution Process (CIRP) against one of its borrower company M/s Moon Storm Pvt. Ltd., in the National Company Law Tribunal (NCLT). The NCLT allowed the

CS Professional · Insolvency - Law and Practice · PYQS · December 2020
BSC Bank filed an application for initiating Corporate Insolvency Resolution Process (CIRP) against one of its borrower company M/s Moon Storm Pvt. Ltd., in the National Company Law Tribunal (NCLT). The NCLT allowed the application and passed order for commencement of CIRP. Rohit has been appointed as Interim Resolution Professional (IRP) and moratorium was declared. The Committee of Creditor (CoC) was constituted and Rohit was appointed as Resolution Professional by CoC. Meetings of the CoC was convened from time to time and expression of interest for Resolution Plan was invited from various parties via public notice. However, no Resolution Plan was received during the currency of 180 days period. Hence, NCLT on the recommendation of RP extended the initial time period from 180 days to 270 days. Since, no one had shown the expression of interest even during the extended period of 270 days, the CoC appointed another Resolution Professional (RP) after the expiry of 270 days. When the matter of resolution could not be completed within the extended time. NCLT, extended the period of CIRP by further period of 90 days after the expiry of 270 days by exercising the power conferred under Section 55 of Insolvency and Bankruptcy Code, 2016 by treating the matter as 'Fast Track Corporate Insolvency Resolution Process' and also determined the 'Corporate Insolvency Resolution Process fee' and the 'Cost' incurred and payable to the Resolution Professional. Aggrieved from the said order of the NCLT, the Resolution Professional preferred appeals against the order of the NCLT. In light of the above facts, answer the following questions: How is the fast track process different from the Corporate Insolvency Resolution Process under Chapter II of Part II of the Insolvency and Bankruptcy Code, 2016.

Answer & Explanation:

The aim of the Insolvency and Bankruptcy Code, 2016 is to conclude the fast track resolution procedure within half of the default time period specified under the Code. The person or entity seeking the fast track relief must support that the case is fit for the Fast-track. Therefore, whosoever files the application for fast track process under Chapter IV of Part II (Section 55) of the Insolvency and Bankruptcy Code will have to file the application along with the proof of the existence of default as evidenced by records available with an information utility or such other means as may be specified by the Board to establish that the corporate debtor is eligible for fast track corporate insolvency resolution process. Fast track Process under Chapter IV of Part II Corporate Insolvency Resolution Process(CIRP) under Chapter II of Part II Corporate debtor with assets and income below a level as may be notified by the Central Government No such restrictions. A corporate debtor with such class of creditors or such amount of debt as may be notified by the Central Government No such restrictions. Time limit for corporate insolvency resolution process be completed within is 90 days from the insolvency commencement date Time limit is for corporate insolvency resolution process be completed within is 180 days (Maximum 330 days) from the insolvency commencement date Can be extended beyond the initial period 90 days up to 45 days Can be extended beyond the initial period of 180 days up to 90 days.

Topics: Corporate Insolvency Resolution Process (CIRP)

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