Whether fresh expression of interest can be accepted beyond the last date of receipt of expression of interest as per the Invitation for Expression of Interest (Form G) under Regulation 36A(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
The Insolvency and Bankruptcy Code, 2016 (‘I&B Code’), as also detailed in the Preamble of the Code, is formed with the objective of reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons to promote entrepreneurship, availability of credit and balance of interest of all stakeholders.
The prime objective of the Corporate Insolvency Resolution Process is maximisation of value of assets of the ‘Corporate Debtor’ and thereby for all creditors. In order of priority, the first order objective is “resolution”. The second order objective is “maximisation of value of assets of the ‘Corporate Debtor’’ and the third order objective is “promoting entrepreneurship, availability of credit and balancing the interests”. This order of objective is sacrosanct.
In order to extend the objectives of the Code, the Resolution Professional and the Committee of Creditors are duty bound to ensure maximisation of value of the Corporate Debtor within the time frame prescribed under the I&B Code i.e. 330 days which can be further extended by period of 90 days, subject to the approval of the Hon’ble Adjudicating. The endeavour is to find out a Resolution Applicant who can offer maximum value for resolution of the insolvency of the Corporate Debtor so as to safeguard the interest of all stakeholders of the Corporate Debtor
Though Regulation 36A (6) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) envisages a bar on submission of Expression of Interest (EoI) after the time specified in the invitation for expression of interest but the law is well settled in this regard that the Regulations have to be read in consonance with the main provisions of the I&B Code (Brilliant Alloys Private Limited v. Mr. S. Rajagopal and Ors.- SLP No. 31557/2018 ). The I&B Code contains no such stipulation with respect to the bar on acceptance of expression of interest beyond the last date mentioned in the Invitation for Expression of Interest Form. Further, the Regulations to the I&B Code can only be considered to be directory in nature and are not mandatory where no clear stipulation to the effect is defined under the provisions of the I&B Code, the furtherance of objectives of the I&B Code should be treated as the guiding principles for the conduct of CIRP.
Therefore, in case any Resolution Plan is not yet approved by the Committee of Creditors and is still under consideration, then the expression of interest to submit a resolution plan by a Resolution Applicant can be permitted/considered by the Resolution professional and the Committee of Creditors.
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By: EasyLegalTax Team