# In the matter of Sriramgiri Spinning Mills Limited IA No. 433-2019 in CP (IB) No. 145-7-HDB-2018

> NCLT judgment dated 2019-06-11. Citation: TCN-2019-NCLT-02982. The case involves an application filed by the Resolution Professional (RP) of Sriramagiri…

- **Court:** NCLT
- **Order date:** 11 Jun 2019
- **Citation:** TCN-2019-NCLT-02982
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sriramgiri-spinning-mills-limited-ia-no-433-2019-in-cp-ib-no-145-7-hdb-2018-a99b122c

## Summary

### Background

The case involves an application filed by the Resolution Professional (RP) of Sriramagiri Spinning Mills Limited, the Corporate Debtor, under Section 18 and 60(5)(c) of the Insolvency and Bankruptcy Code (IBC), 2016. The RP sought directions to exclude the period during which a stay order issued by the Hon'ble High Court of Telangana was in effect. The Corporate Insolvency Resolution Process (CIRP) was initiated against Sriramagiri Spinning Mills Limited based on a petition filed by Oriental Bank of Commerce under Section 7 of the IBC. The High Court had granted an interim stay on the CIRP, which halted the process shortly after its commencement. The High Court subsequently vacated the stay, leading the RP to file the application for exclusion of the stay period from

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## Facts

Oriental Bank of Commerce filed a petition under Section 7 of the IBC against Sriramagiri Spinning Mills Limited, leading to the initiation of CIRP on 2018-12-04. Shri C. Bala Mouli was appointed as the Interim Resolution Professional (IRP). The IRP made a public announcement on 2018-12-07 inviting claims from creditors. The High Court of Telangana granted an interim stay on the CIRP on 2018-12-06, halting the process. The High Court vacated the stay on 2019-05-01. The IRP then filed an application with the NCLT seeking exclusion of the stay period (178 days initially claimed, later determined to be 148 days) from the CIRP timeline, arguing that the stay prevented any progress in the CIRP. The CIRP period was initially set to end on 2019-06-02. The IRP sought a new

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## Issues and analysis

### Issue 1: Whether the period during which the interim stay granted by the Hon'ble High Court of Telangana was …

**Ratio:** The legal principle applied is that the CIRP timeline can be extended by excluding

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**Reasoning:** The Tribunal reasoned that the interim stay granted by the High Court effectively

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**Interpretation:** The interpretation of Section 12(1) of the IBC is that it provides a mechanism

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**Application:** The Tribunal applied the ratio and reasoning to the specific facts of the case,

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## Parties

- **Judges:** Ratakonda…
- **Respondents:** Ramagiri Spinning…; The Oriental Bank…

## Timeline

- **2018-12-04 — CIRP Init…**: CIRP initiated against Sriramagiri Spinning Mills Limited based on Section 7 petition by…
- **2018-12-06 — Interim Stay…**: Hon'ble High Court of Telangana…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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