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2021 (1) TMI 143 - Tri - Insolvency and BankruptcySeeking exclusion of 102 days of the CIRP period for the purpose of calculating 180 days - Section 60(5) read with Rule 11 and Regulation 40C of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - The Hon'ble National Company Law Appellate Tribunal in IN RE SUO MOTO 2020 (6) TMI 495 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI where it was held that the period of lockdown ordered by the Central Government and the State Governments including the period as may be extended either in whole or part of the country, where the registered office of the Corporate Debtor may be located, shall be excluded for the purpose of counting of the period for 'Resolution Process under Section 12 of the Insolvency and Bankruptcy Code, 2016, in all cases where 'Corporate Insolvency Resolution Process' has been initiated and pending before any Bench of the National Company Law Tribunal or in Appeal before this Appellate Tribunal. 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 held that 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. 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 and the said regulation states 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. Accordingly, the period of lockdown w.e.f. 25.03.2020 to 31.07.2020 is excluded from the calculation of 180 days which was originally expiring on 25.08.2020 - Application disposed off.
Issues:
1. Urgent hearing sought for IA No. 348/2020. 2. Exclusion of days for calculating 180 days in CIRP period due to lockdown. 3. Applicability of orders related to extension of limitation due to COVID-19. 4. Impact of IBBI Regulations on exclusion of lockdown period in insolvency processes. Analysis: 1. The Tribunal allowed IA No. 347/2020 filed for urgent hearing of IA No. 348/2020, which was disposed of subsequently. 2. IA No. 348/2020 was filed by the Resolution Professional seeking exclusion of 102 days from the CIRP period for calculating 180 days due to the COVID-19 lockdown. The delay in completing the resolution process was attributed to the lockdown, impacting the timeline for corporate debtor resolution. 3. Referring to orders by the Supreme Court and NCLAT regarding extension of limitation due to the pandemic, the Tribunal recognized the impact of COVID-19 on legal proceedings. The orders emphasized the need to mitigate hardships faced by stakeholders and ensure adherence to prescribed timelines under the Insolvency and Bankruptcy Code. 4. The Tribunal considered the insertion of Regulation 40C by IBBI, excluding the lockdown period for activities affected by the pandemic in corporate insolvency resolution processes. Additionally, Regulation 47A was inserted for liquidation processes, further emphasizing the exclusion of lockdown period for timeline computation. In conclusion, IA No. 348/2020 was allowed, excluding the lockdown period from 25.03.2020 to 31.07.2020 for calculating the 180-day timeline, which was originally set to expire on 25.08.2020. The Tribunal's decision aligned with the regulatory framework and judicial directives aimed at addressing the challenges posed by the pandemic on insolvency proceedings.
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