NCLAT Allows 30-Day Extension Of CIRP In Shri Ram Switchgears Case To Facilitate CoC Voting On Revised Resolution Plan
Pranav B Prem
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member – Technical), has allowed a 30-day extension in the Corporate Insolvency Resolution Process (CIRP) of M/s Shri Ram Switchgears Limited. The extension was granted to facilitate the voting process on a revised resolution plan that had been finalized by the Committee of Creditors (CoC) before the expiry of the CIRP timeline.
The CIRP in this case was initiated by order dated 29.02.2024 passed by the Adjudicating Authority (NCLT) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The original timeline was extended by the NCLT from time to time and was last extended until 24.05.2025. During the pendency of the process, the Interim Resolution Professional was replaced by Navin Kumar Khandelwal, who continued as the Resolution Professional (RP).
Before the expiry of the CIRP timeline, the CoC conducted its 15th meeting between 09.05.2025 and 14.05.2025. In that meeting, the CoC resolved, with 96.94% voting share, to seek a 30-day extension and to request exclusion of 148 days from the CIRP timeline. The exclusion request was based on delays caused due to judicial proceedings for the replacement of the IRP. In the same meeting, the Prospective Resolution Applicant (PRA) presented a revised resolution plan that included improved financial terms and commitments. However, the signed copy of the resolution plan and certain final procedural steps were pending, necessitating additional time to complete compliance.
Subsequently, on 21.05.2025, the CoC held its 16th meeting, where it decided to place the resolution plan for voting and scheduled the voting process to commence on 27.06.2025. Before the voting could begin, the RP moved an application before the Adjudicating Authority seeking a 30-day extension and exclusion of 148 days. However, the Adjudicating Authority, by its order dated 25.06.2025, rejected the application, leading to a situation where the voting process could not proceed.
Aggrieved by the rejection, UCO Bank, a member of the CoC, filed an appeal before the NCLAT challenging the NCLT's refusal to grant the extension and exclusion. The Appellate Tribunal stayed the operation of the NCLT’s order on 01.07.2025 and reserved the matter for final orders after hearing both sides.
The NCLAT, while examining the record, observed that the Adjudicating Authority had itself extended the CIRP till 24.05.2025. Therefore, any delay or procedural lapse that occurred before that date had already been regularized. The Tribunal stated that the focus should have been on whether any concrete steps had been taken by the CoC and the RP prior to 24.05.2025. The record clearly showed that the revised resolution plan had been presented by the PRA, and that the CoC had taken a conscious decision to move forward with voting on the resolution plan. The Tribunal also observed that the only pending step was the submission of the signed resolution plan, which had been expected shortly.
The NCLAT held that rejecting the application for extension in such circumstances would frustrate the entire resolution process that was near completion. The Tribunal emphasized that the rejection had effectively halted the scheduled voting on the resolution plan, which had the potential to revive the corporate debtor. It further held that the commercial wisdom of the CoC, especially when exercised with a high voting majority, deserved due respect and should not be thwarted by procedural rigidity.
Taking into account the bona fide efforts of the CoC and the RP, the Appellate Tribunal allowed the appeal and granted an extension of 30 days from the date of its order. It also allowed exclusion of 148 days from the CIRP timeline to cover the period lost due to litigation over replacement of the IRP. The Tribunal directed the RP to complete all remaining steps within the extended period and file the application under Section 31 of the IBC before the Adjudicating Authority. With these directions, the appeal was disposed of.
Appearance
For Appellant: Mr. Brijesh Kumar Tamber and Mr. Prateek Kushwaha, Advocates.
For Respondent (RP): Mr. Sumesh Dhawan, Ms. Vatsala Kak, Mr. Shaurya Shyam and Ms. Varsha Mohanty, Advocates.
For Respondent No. 3: Mr. Kunal Tandon, Sr. Advocate with Mr. Kunal Kanungo, Ms. Natasha Singh Bhatti, Ms. Tanushree Sogani and Mr. Atishay Jain, Advocates.
Cause Title: UCO Bank V. C.A. Navin Kumar Khandelwal, RP of Shri Ram Switchgears Ltd.
Case No: Company Appeal (AT) (Insolvency) No. 1021 of 2025
Coram: Justice Ashok Bhushan [Chairperson], Barun Mitra [Member (Technical)]
