The National Company Law Appellate Tribunal has granted more time till November 30 for completing the insolvency resolution process for Vasan Healthcare and set aside an NCLT order, saying the timeline could be extended in view of exceptional circumstances and save the company from liquidation. A two-member Chennai Bench of the appellate tribunal has also excluded the time spent in filing appeals – from August 18 to November 25 – before it.
“This tribunal is of the view that Corporate Debtor (Vasan Healthcare) cannot be pushed into liquidation,” said NCLAT.
On August 3 this year, the Chennai Bench of National Company Law Tribunal (NCLT) had declined the plea of Resolution Professional of Vasan Healthcare seeking time till November 30 for completing the resolution process and extended it only till August 22, 2021.
This was challenged by RP and the Committee of Creditors(CoC) before NCLAT.
Three resolution applicants (bidders) for Vasan Healthcare – Max Vision Eye Hospital, ASG Hospital and Dr Agarwal’s Health Care have also approached NCLAT.
NCLAT, in its judgment, observed that Vasan Healthcare’s resolution process has faced exceptional circumstances such as pendency of judicial proceedings before courts, imposition of nationwide lockdown, change of RP, calling fresh Expression of Interest and the nature of business of the corporate debtor which admittedly is spread over many parts of the country.
“The appellants have made out a prima facie case praying this Bench to extend the time for completing the Corporate Insolvency Resolution Process till November 30, 2021, as prayed in … filed by the Resolution Professional before the Adjudicating Authority (NCLT),” the appellate tribunal said.
It further said:”The reliefs sought in… filed by RP of the Corporate Debtor before the Adjudicating Authority, Chennai Bench is hereby allowed by setting aside the order of the Adjudicating Authority dated 03.08.2021.”
NCLAT further said it has come to a resultant conclusion based on the facts and keeping in view the exceptional circumstances.
Viewing in that perspective and to avoid liquidation as a last resort, and to comply with the object of the code i.e. maximisation of value of the asset of the corporate debtor, it has been decided to extend the time till November 30, it said.
Moreover, the Supreme Court has also laid down a law in the matter of Swiss Ribbons and Essar Steel, that the outer limit of 330 days can be extended in exceptional circumstances.
Insolvency proceedings against Vasan Healthcare were initiated in April 2017. However, the proceedings were stayed by the Madras High Court till September 5, 2019. CoC was constituted on November 14, 2019 and after that there was a nationwide lockdown.
