# In the matter of Sarga Hotel Private Limited IA(IB) -1658-KB-2022 In C.P (IB) No.302-KB-2021

> NCLT judgment dated 2023-01-10. Citation: TCN-2023-NCLT-05124. The application IA(IB)/1658/KB/2022 was filed under section 12(2) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 10 Jan 2023
- **Citation:** TCN-2023-NCLT-05124
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sarga-hotel-private-limited-iaib-1658-kb-2022-in-cp-ib-no302-kb-2021-a014ee43

## Summary

### Background

The application IA(IB)/1658/KB/2022 was filed under section 12(2) of the Insolvency and Bankruptcy Code, 2016, by the Resolution Professional (RP) seeking exclusion of time from the Corporate Insolvency Resolution Process (CIRP) due to time consumed in judicial proceedings related to IA 690/2022. The CIRP commenced on February 11, 2022, and progressed according to Regulation 40A until July 15, 2022, when an application by Shristi Infrastructure Development Corporation Limited (SIDCL) claiming ownership rights over a portion of the Corporate Debtor's property hampered the process. This led to PRAs seeking an extension of time for submitting resolution plans.

## Facts

The Corporate Insolvency Resolution Process (CIRP) of Sarga Hotel Private Limited commenced on February 11, 2022. Shristi Infrastructure Development Corporation Limited (SIDCL) filed an application claiming ownership rights over 3.5 acres out of 8 acres belonging to the Corporate Debtor, which hampered the CIRP. Consequently, prospective resolution applicants (PRAs) sought an extension of time for submitting resolution plans. The Adjudicating Authority granted an extension on August 2, 2022, as the initial 180 days of CIRP concluded on August 10, 2022. Five resolution plans were received by September 30, 2022. SIDCL's claim was dismissed by the NCLAT on October 12, 2022. An extension from 270 to 330 days was sought vide IA No. 1376/2022, granted on November 12, 2022,

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## Issues and analysis

### Issue 1: Whether the time consumed in the judicial proceedings related to IA 690/2022 filed by SIDCL should …

**Ratio:** Section 12(2) of the Insolvency and Bankruptcy Code, 2016 allows for the resolution

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**Reasoning:** The court considered that the CIRP process was hampered due to the application filed by

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**Interpretation:** The interpretation of Section 12(2) and the Supreme Court's ruling in Committee

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**Application:** The court applied the ratio by excluding 180 days from the CIRP timeline,

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## Parties

- **Judges:** BIDISHA BA…; Balraj…
- **Appellants:** Avishek…
- **Respondents:** Sarga Hotel…; Shristi Infrastruc…

## Timeline

- **2022-02-11 — CIRP Commen…**: Corporate Insolvency Resolution Process (CIRP)…
- **2022-07-15 — CIRP Ham…**: CIRP process was hampered due to SIDCL filing…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 12 — Time-limit for completion of insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-12)

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