NCLAT held that an extension beyond 90 days for e-auction payment is impermissible, emphasizing the need for strict adherence to liquidation timelines.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising Justice Ashok Bhushan (Chairperson) and Technical Members Mr. Barun Mitra and Mr. Arun Baroka, reviewed two appeals along with connected IAs and held that the mandatory timeline under Clause 1(12) of Schedule I of the Liquidation Process Regulations, 2016, must be strictly adhered to. It further clarified that neither the liquidator nor the adjudicating authority has the jurisdiction to grant an extension beyond the prescribed 90-day period for payment of balance consideration in an e-auction, rendering any such extension inconsistent with the regulatory framework governing the liquidation process.
The National Company Law Appellate Tribunal (NCLAT) adjudicated upon two appeals filed by a suspended director of the corporate debtor, challenging orders dated 27.02.2024 and 15.07.2024, issued by the National Company Law Tribunal (NCLT), Mumbai Bench, in IA No. 722 of 2024 and IA No. 1693 of 2024, respectively. The Corporate Insolvency Resolution Process (CIRP) against Trans Fab Power India Pvt. Ltd. commenced on 30.08.2019. The appellant, being a suspended director, had submitted a resolution plan, which was approved by the NCLT on 25.03.2021. However, upon failing to execute the plan, the Committee of Creditors (CoC) decided to liquidate the corporate debtor, leading to the adjudicating authority’s order of liquidation dated 28.06.2023.