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2020 (11) TMI 668 - Tri - Insolvency and BankruptcyExclusion of certain time from the CIRP period in view of the time lost in replacing the Interim Resolution Professional and also the lockdown imposed due to Pandemic Covid-19 - HELD THAT - The Hon'ble Supreme Court of India in Suo Motu Writ Petition (Civil) No(s). 3/2020 in Re cognizance for extension of Limitation, vide order dated 23.03.2020, 2020 (5) TMI 418 - SC ORDER observed as under - This Court has taken Suo Motu cognizance of the situation arising out of the challenge faced by the country on account of Covid-19 Virus and resultant difficulties that may be faced by litigants across the country in filing their petitions/applications/suits/appeals/all other proceedings within the period of limitation prescribed under the general law of limitation or under Special Laws (both Central and/or State). The Insolvency and Bankruptcy Board of India, inserted Regulation 40C to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, vide notification dated 29.03.2020 has held Special provision relating to time-line Notwithstanding the time-lines contained in these regulations, but subject to the provisions in the Code, the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process. Similarly, the Insolvency and Bankruptcy Board of India, vide notification dated 20.04.2020, inserted Regulation 47 A to the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 held that Subject to the provisions of the Code, the period of lockdown imposed by the Central Government in the wake of Covid-19 outbreak shall not be counted for the purpose of computation of the timeline for any task that could not be completed due to such lockdown, in relation to any liquidation process. In the circumstances and for the reasons mentioned in the application and in view of the orders of the Hon'ble Supreme Court of India, National Company Law Appellate Tribunal and in view of the Regulations issued by Insolvency and Bankruptcy Board of India, the instant application is allowed.
Issues:
- Urgent hearing sought for IA No. 306/2020 - Exclusion of time from CIRP period due to replacement of IRP and Covid-19 lockdown Analysis: 1. Urgent Hearing Request: - IA No. 305/2020 filed for urgent hearing of IA No. 306/2020 was allowed by the Tribunal, and IA No. 305/2020 was disposed of accordingly. 2. Exclusion of Time from CIRP Period: - IA No. 306/2020 was filed by the Resolution Professional seeking exclusion of time from the CIRP period due to the replacement of the Interim Resolution Professional (IRP) and the Covid-19 lockdown. - The initial IRP failed to perform duties, leading to a delay in conducting COC meetings for his replacement. - Replacement of IRP was done on 25.02.2020, and lockdown due to Covid-19 started from 25.03.2020. - The applicant requested exclusion of the period from 30.11.2019 to 25.02.2020 and from 25.03.2020 to 31.07.2020 from the CIRP period. - The Tribunal noted that no substantial work was done in the CIRP till 25.02.2020 and due to the lockdown from 25.03.2020 to 31.07.2020, no significant progress could be made in the proceedings. - Referring to orders by the Hon'ble Supreme Court and NCLAT, and regulations by the IBBI, the Tribunal excluded the mentioned periods from the CIRP timeline. 3. Legal Precedents and Regulations: - The Tribunal cited orders by the Hon'ble Supreme Court and NCLAT regarding the extension of limitation periods due to the Covid-19 situation. - The IBBI issued regulations excluding the lockdown period from the timeline for activities related to insolvency resolution and liquidation processes. - Based on these legal precedents and regulations, the Tribunal excluded the specific periods from the CIRP timeline as requested in IA No. 306/2020. 4. Disposition: - IA No. 306/2020 was disposed of by the Tribunal in light of the circumstances, legal precedents, and regulations mentioned. - The order was to be supplied to the applicant's counsel by the Registry for compliance and further action.
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