2020 (11) TMI 670 - Tri - Insolvency and Bankruptcy

Exclusion of time period from time period for completion of CIRP of Corporate Debtor - extension of 120 days from 01.07.2020 to 28.10.2020 for completion of CIRP of Corporate Debtor - HELD THAT - In this case, the CIRP period of 180 days has already been extended by another 90 days vide this Adjudicating Authority's order dated 05.11.2019 and by virtue of section 12 of IBC, 2016, a period another 60 days was extended vide order dated 11.02.2020. The period of 270 days 60 days came to an end on 09.02.2020 and 09.04.2020 respectively. Now that the Applicant herein is seeking exclusion of period lost due to outbreak of Covid-19 pandemic. Considering the submissions, facts and circumstances of case, interest envisaged by the Prospective Resolution Applicant for resolution of Corporate Debtor and in view of the decision of CoC in its 17th meeting dated 29.06.2020, as well as the economic scenario emerging due to COVID-19 pandemic and it's fall out, this Adjudicating Authority observes that exclusion of time period for completion of CIRP lost due to lockdown imposed by Central Government and State Government from time to time would be in the interest of all stakeholders, to allow the completion of CIRP rather than going for liquidation of the Corporate Debtor which should only be initiated as a last resort. Accordingly, this Adjudicating Authority hereby approve the exclusion of another period of 97 days from calculation of CIRP period. This exclusion is granted on having considered the steps already been taken by the RP, approval by the CoC with 81.11% and the current stage of CIRP in the case of the present Corporate Debtor i.e., M/s. Athena Chhattisgarh Power Limited. Further, upon considering the aspect of exclusion of period of 97 days, this Adjudicating Authority is of the view that a sufficient time is already been granted for completion of CIRP - petition disposed off.

Summary

Issues:
1. Exclusion of time period due to COVID-19 lockdown for completion of CIRP.
2. Extension of time for completion of CIRP of Corporate Debtor.

Analysis:
1. Exclusion of Time Period due to COVID-19 Lockdown:
The Applicant, a Resolution Professional, filed an interlocutory Application seeking exclusion of the period from 25.03.2020 to 30.06.2020 for completion of Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor under the Insolvency and Bankruptcy Code, 2016. The lockdown imposed by the Government of India due to the COVID-19 pandemic affected the completion timeline. The Adjudicating Authority referred to the Supreme Court's judgment in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta, emphasizing the need for flexibility in extending the CIRP period beyond 330 days in exceptional cases. Considering the interest of stakeholders and the economic impact of the pandemic, the Authority approved the exclusion of 97 days from the CIRP calculation to facilitate completion and avoid liquidation.

2. Extension of Time for Completion of CIRP:
The Applicant also sought an extension of 120 days from 01.07.2020 to 28.10.2020 for completing the CIRP of the Corporate Debtor. However, the Adjudicating Authority, after considering the actions taken by the Resolution Professional, approval by the Committee of Creditors (CoC) with 81.11% majority, and the current stage of CIRP, determined that sufficient time had already been granted for completion. Therefore, the Authority did not find it appropriate to grant an additional extension of 120 days. The Application was disposed of based on the exclusion of the 97-day period and the circumstances of the case.

In conclusion, the judgment by the National Company Law Tribunal, Hyderabad Bench, addressed the issues of excluding the time period due to the COVID-19 lockdown for CIRP completion and the extension of time for the same. The decision was made in line with legal provisions, Supreme Court guidance, stakeholder interests, and the economic impact of the pandemic to ensure the resolution of the Corporate Debtor without resorting to liquidation.