The 330-Day Wall: CoC's Late Extension Request
Nexa Alloys Pvt Ltd was admitted to CIRP on 1 September 2024 on a financial creditor’s application for a ₹14 crore default. The RP constituted a CoC in which Bank P held 55% and NBFC Q held 45% voting share. The 180-day period ended on 28 February 2025. In January 2025, the CoC had already passed a 90-day extension resolution, and NCLT extended the CIRP to 29 May 2025. An unsuccessful resolution applicant challenged the RP’s rejection of its plan before NCLAT, and the NCLAT stayed CoC proceedings for 45 days; the appeal was dismissed on 20 May 2025. On 10 June 2025, with no plan approved, the CoC passes a fresh resolution by 70% vote to seek a further 60-day extension, arguing that the 45-day stay should be excluded. The RP asks whether he can file the application and what happens if the 330-day limit is crossed.
1. Can NCLT grant the further 60-day extension? Explain the statutory cap and the effect of the 45-day NCLAT stay.
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No. Section 12(2) permits one extension of up to 90 days on a CoC resolution passed by at least 66% of voting shares. Nexa has already used that extension. Section 12(3) then imposes a mandatory outer limit of 330 days from the insolvency commencement date, and expressly includes both the extension and "the time taken in legal proceedings in relation to such resolution process". The 45-day NCLAT stay is therefore counted, not excluded.
On the dates given, 1 September 2024 + 330 days = 28 July 2025. The CoC’s proposed 60-day extension would run to about 9 August 2025, beyond the cap. The 70% vote is irrelevant because the CoC cannot by resolution create a power that s.12(3) denies. The RP may record the CoC’s instruction, but NCLT has no jurisdiction to grant an extension beyond 330 days; the correct advice is that the CIRP must be completed within the cap.
2. What should the RP do if the CoC insists and no plan is approved by 28 July 2025?
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The RP should convene the CoC, place the statutory position on record, and explain that if no resolution plan is approved within the 330-day period, liquidation is mandatory under s.33(1). The RP cannot continue the CIRP indefinitely or treat a pending application as an automatic extension. If the cap is crossed without an approved plan, the RP should apply to the Adjudicating Authority for a liquidation order and take steps to preserve the corporate debtor’s assets and records for handover to the liquidator. The RP should also avoid filing a fresh extension application that is bound to fail, because that may itself be treated as non-compliance with the CIRP timeline. The commercial preference of the CoC cannot override the statutory end-date.