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2020 (12) TMI 839 - Tri - Insolvency and BankruptcySeeking exclusion of lockdown period from 25.03.2020 till 31.07.2020(128 days) declared by Central and State Governments from the maximum CIRP period of 330 days - section 12 of the Insolvency and Bankruptcy Code, 2016 Read with Regulation 40 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016 read with Rule 11 of NCLT Rules, 2016 - HELD THAT - The CIRP in the normal course should have been completed by 25.05.2020. However lockdown started from 25.03.2020. According to the applicant the lockdown was till 31.07.2020 in the containment zones. Counsel for RP requested the Tribunal to exclude lockdown period from the CIRP - Actually days lost due to lockdown was 62 days i.e. from 25.03.2020 to 25.05.2020. These 62 days lost in the lockdown period is to be added from 01.08.2020. Thus CIRP of 270 days to be completed by 01.10.2020. Application disposed off.
Issues:
- Application seeking exclusion of lockdown period from CIRP timeline Analysis: The Interlocutory application was filed by the Resolution Professional under section 12 of the Insolvency and Bankruptcy Code, 2016, seeking exclusion of the lockdown period from 25.03.2020 till 31.07.2020 (128 days) from the maximum Corporate Insolvency Resolution Process (CIRP) period of 330 days. The application highlighted that the CIRP against the corporate debtor commenced on 08.07.2019, and various steps were taken in accordance with the regulations. The Resolution Professional informed that due to the COVID-19 pandemic situation, prospective resolution applicants faced difficulties in submitting their plans, leading to requests for multiple extensions of the submission deadline. The Resolution Professional presented the facts to the Committee of Creditors (COC) regarding the need to seek appropriate directions from the Tribunal for the exclusion of time lost due to the pandemic situation. The application relied on Regulation 40C, which specified that the period of lockdown imposed by the Central Government due to the COVID-19 outbreak should not be counted for the timeline of activities that could not be completed during the lockdown in relation to a Corporate Insolvency Resolution Process. The Resolution Professional sought the exclusion of 128 days from the CIRP timeline, considering the challenges faced by the resolution applicants during the lockdown period. During the hearing, the Tribunal considered the arguments presented by the counsel for the Resolution Professional and noted that the lockdown period from 25.03.2020 to 31.07.2020 amounted to 128 days. The Tribunal acknowledged that the lockdown had caused a delay of 62 days in the CIRP timeline, from 25.03.2020 to 25.05.2020. Consequently, the Tribunal decided to exclude these 62 days lost during the lockdown period and adjusted the CIRP completion deadline to 01.10.2020. As a result, the Tribunal disposed of the Interlocutory application No. 686 of 2020, granting the exclusion of the lockdown period from the CIRP timeline and extending the deadline for completion accordingly.
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