Tribunal Upholds Mandatory Timelines in Insolvency Process, Rejects Late EOI Submission Without CoC Approval
In a significant ruling, the National Company Law Tribunal (NCLT), Ahmedabad Bench, has dismissed the application filed by Dyestuff Industries Limited seeking an extension of timelines for submitting a resolution plan in the corporate insolvency resolution process (CIRP) of SEBACIC India Limited. The tribunal, comprising Mr. Shammi Khan, Member (Judicial), and Mr. Sanjeev Sharma, Member (Technical), emphasized the mandatory nature of timelines prescribed under the Insolvency and Bankruptcy Code, 2016 (IBC) and associated regulations, asserting that they cannot be extended arbitrarily.
The application by Dyestuff Industries Limited sought directions for convening a special meeting of the Committee of Creditors (CoC) to consider their expression of interest (EOI), which was submitted late, and requested an extension of the deadline for submitting the resolution plan by 10 to 12 days beyond November 5, 2025. The applicant contended that due to the stay on CIRP proceedings from August 2024 to July 2025, they lost track of the process. They argued that the reopening of the EOI stage would not prejudice any stakeholders, but rather enhance competition and potentially benefit the corporate debtor's revival.
However, the tribunal held that adherence to prescribed timelines is crucial for ensuring a time-bound resolution under the IBC. It noted that Dyestuff Industries failed to submit their EOI within the stipulated deadline of August 15, 2025, despite the process being publicly accessible through the issuance of Form G. The tribunal also highlighted that reopening the EOI stage without CoC endorsement would disrupt the CIRP process and prejudice existing applicants who adhered to the timelines.
The NCLT referenced the Supreme Court's judgment in Kalpraj Dharamshi v. Kotak Investment Advisors Limited, which allows deviations from timelines with CoC approval, but clarified that such flexibility is limited to the post-EOI stage. The tribunal found no justification for extending the timeline at this advanced stage of the CIRP, noting that the applicant did not act promptly post-lifting of the stay order on July 9, 2025, when the fresh Form G was issued.
Ultimately, the tribunal ruled that Rule 11 of the NCLT Rules, which provides inherent powers to pass orders in the interest of justice, cannot be used to override mandatory procedural provisions in the Code. The application was dismissed in limine, reinforcing the importance of procedural discipline and the commercial wisdom of the CoC in insolvency proceedings.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Timelines for submission of Expression of Interest (EOI) and Resolution Plans are mandatory and must be adhered to by all stakeholders. Late submission of EOI cannot be entertained unless justified and approved by the Committee of Creditors (CoC) within the overall CIRP timeline.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 - Sections 60(5), 30(4); NCLT Rules, 2016 - Rule 11; IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - Regulations 36A, 36B
