Shri Ram Switchgears Limited: NCLAT Grants Relief with 30-Day CIRP Timeline Extension

Shri Ram Switchgears Limited: NCLAT Grants Relief with 30-Day CIRP Timeline Extension

Introduction

The National Company Law Appellate Tribunal (NCLAT) has allowed an appeal filed by UCO Bank, granting a 30-day extension for the Corporate Insolvency Resolution Process (CIRP) timeline in the case of Shri Ram Switchgears Limited.

Factual Background

M/s Shri Ram Switchgears Limited was admitted into CIRP on February 29, 2024. The Adjudicating Authority granted an extension of the CIRP timeline up to May 24, 2025. Before the expiry of the timeline, the Committee of Creditors (CoC) resolved to seek a 30-day extension and exclusion of 148 days due to delays caused by the replacement of the Interim Resolution Professional (IRP). A Prospective Resolution Applicant (PRA) presented a revised resolution plan which required additional time for completion and compliance.

Procedural Background

The Resolution Professional (RP) filed an application for extension of 30 days' time and exclusion of 148 days from the CIRP timeline. However, the Adjudicating Authority rejected the application on June 25, 2025. The appellant, UCO Bank, filed the appeal praying for setting aside the impugned order.

Contentions of the Parties

Appellant’s Contentions:

• The Adjudicating Authority erred in rejecting the application for extension of time and exclusion of 148 days.
• The CoC had taken steps to finalize the resolution plan, and voting was scheduled to begin on June 27, 2025.

Respondent’s Contentions:

• The RP and the CoC had not been diligent in completing the CIRP process within the stipulated timeline.

Reasoning and Analysis

The bench of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) noted that the Adjudicating Authority had granted an extension till May 24, 2025, and therefore, there was no relevance of considering the period prior to May 24, 2025, in deciding the application for extension. The Tribunal held that the Adjudicating Authority ought to have focused on whether steps had been taken by the CoC till May 24, 2025. It further observed that revised resolution plans had been submitted and only a signed plan remained to be filed for the voting to take place. The Tribunal noted that due to rejection of the application, voting scheduled for June 27, 2025, could not proceed.

Implications

The NCLAT's decision to grant a 30-day extension for the CIRP timeline will allow the CoC to complete the voting process and finalize the resolution plan. This decision reflects the Tribunal's emphasis on allowing sufficient time for the resolution process to be completed.

Outcome

The NCLAT allowed the appeal and granted a fresh extension of 30 days from the date of the order, enabling the scheduled voting to now take place.

Counsel

The appellant was represented by Mr. Brijesh Kumar Tamber and Mr. Prateek Kushwaha, Advocates. The respondent (RP) was represented by Mr. Sumesh Dhawan, Ms. Vatsala Kak, Mr. Shaurya Shyam and Ms. Varsha Mohanty, Advocates. Respondent No. 3 was represented by Mr. Kunal Tandon, Senior Advocate with Mr. Kunal Kanungo, Ms. Natasha Singh Bhatti, Ms. Tanushree Sogani and Mr. Atishay Jain, Advocates.