The NCLAT has upheld the extension of a resolution plan timeline, ruling that delays in property handover not attributable to the resolution applicant cannot burden the successful bidder.
Property Handover Delays Do Not Invalidate Resolution Plan Extensions
The National Company Law Appellate Tribunal (NCLAT) has affirmed that delays in the handover of immovable property during insolvency resolution proceedings cannot be attributed to the successful resolution applicant. Consequently, such delays do not disentitle the applicant from the benefit of a time extension for implementing the resolution plan.
The Tribunal emphasized that the resolution process must be viewed holistically, and equitable considerations must be taken into account when assessing compliance timelines. Where third-party actions or systemic delays, such as pending property possession, are extrinsic to the resolution applicant’s control, the Adjudicating Authority may extend the implementation period under the Insolvency and Bankruptcy Code, 2016.
Practitioners must now factor in extrinsic delays when drafting or challenging resolution timelines. The decision reinforces a pragmatic interpretation of timelines under Section 31(1) IBC, promoting investor confidence in the resolution process by preventing technical defaults arising from uncontrollable circumstances.
