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2020 (11) TMI 287 - Tri - Insolvency and BankruptcyExclusion of the period of lockdown due to Covid-19 imposed by the Central Government and the State Government of Telangana from the Corporate Insolvency Resolution Process period - HELD THAT - It is true lockdown commenced from 22.03.2020. It is the case of Resolution Professional that Resolution Applicants are from Singapore and Hongkong, those countries are affected with Covid-19 and hence the process of evolving the resolution process could not be completed - Learned counsel for Resolution Professional relied on Regulation 40C of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and contended that lockdown period to be excluded from CIRP. The COC also approved the same. Therefore, there are grounds to allow the application for excluding the lockdown period from CIRP and as such CIRP to be completed by 06.09.2020. The application is allowed directing completion of CIRP by 06.09.2020.
Issues:
1. Exclusion of lockdown period from Corporate Insolvency Resolution Process (CIRP) period. 2. Extension of CIRP period due to Covid-19 lockdown. 3. Application of Regulation 40C of IBBI Regulations for excluding lockdown period. 4. Impact of lockdown on Resolution Applicants from Singapore and Hongkong. Issue 1: Exclusion of Lockdown Period from CIRP Period: The Interlocutory Application sought to exclude the lockdown period due to Covid-19 from the CIRP period of M/s. Neueon Towers Limited. The Resolution Professional requested an extension to complete the CIRP beyond the lockdown period, which ended on 31.07.2020. The COC had already resolved to exclude the lockdown period to allow Resolution Applicants to submit their plans. The Resolution Professional highlighted challenges faced due to Covid-19 affecting foreign investors and requested an extension until 06.09.2020 to complete the CIRP. Issue 2: Extension of CIRP Period due to Covid-19 Lockdown: The Resolution Professional had previously obtained extensions for the CIRP period, with the latest extension ending on 28.04.2020. The lockdown from 22.03.2020 to 31.07.2020 led to a loss of 37 days within the 330-day period for completing CIRP. Therefore, the Resolution Professional argued for an extension until 06.09.2020 to make up for the lost time during the lockdown. Issue 3: Application of Regulation 40C of IBBI Regulations: The Resolution Professional relied on Regulation 40C of IBBI Regulations to support the exclusion of the lockdown period from the CIRP timeline. The COC had also approved this exclusion, further strengthening the argument for extending the CIRP period until 06.09.2020. The Tribunal considered the grounds presented and allowed the application for excluding the lockdown period from the CIRP timeline. Issue 4: Impact of Lockdown on Resolution Applicants from Singapore and Hongkong: The Resolution Applicants from Singapore and Hongkong were significantly impacted by Covid-19, leading to delays in the resolution process. The Resolution Professional emphasized the challenges faced by foreign investors in finalizing their plans due to the pandemic situation in their countries. The Tribunal acknowledged the difficulties faced by the Resolution Applicants and approved the extension of the CIRP period until 06.09.2020 to accommodate the effects of the lockdown and Covid-19 on the resolution process. In conclusion, the Tribunal allowed the application, directing the completion of the CIRP by 06.09.2020, considering the exclusion of the lockdown period and the challenges faced by Resolution Applicants from Singapore and Hongkong due to the Covid-19 pandemic.
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