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2021 (2) TMI 832 - Tri - Insolvency and BankruptcySeeking extension of CIRP period by 90 days more beyond 180 days after excluding the lockdown period - Section 12 read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - The Hon'ble National Company Law Appellate Tribunal in Suo Moto-Company Appeal 2020 (6) TMI 495 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI has 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 - 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 and the said regulation reads as 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 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, instant application is allowed and the period of CIRP extended by 90 days more, beyond 180 days after excluding the period from 25.03.2020 to 31.07.2020 - application allowed.
Issues:
Extension of CIRP period due to lockdown Analysis: The Resolution Professional of KUT Energy Private Limited filed IA No.373/2020 under Section 12 read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016 seeking a 90-day extension of the CIRP period beyond the initial 180 days, excluding the lockdown period. The CIRP proceedings began on 07.10.2019, and the 180-day period was set to end on 04.04.2020. However, due to the lockdown, the resolution could not be completed within the stipulated time frame, leading to the need for an extension. The Committee of Creditors of the Corporate Debtor passed a resolution during their 5th CoC meeting on 12.03.2020, with 100% voting, to seek an extension of the CIRP period. This resolution was based on the potential for resolution of the Corporate Debtor. The Resolution Professional highlighted the impact of the lockdown on the proceedings and requested the extension to facilitate the resolution process effectively. In light of the legal developments related to the COVID-19 pandemic, such as the order by the Hon'ble Supreme Court of India and the National Company Law Appellate Tribunal, which extended the period of limitation and excluded the lockdown period for legal proceedings, the Tribunal allowed the instant IA. The Tribunal relied on the orders issued by the higher courts and the regulations introduced by the Insolvency and Bankruptcy Board of India to grant a 90-day extension to the CIRP period, excluding the lockdown period from 25.03.2020 to 31.07.2020. Therefore, the Tribunal disposed of IA No.373/2020 by granting the requested extension, acknowledging the exceptional circumstances caused by the lockdown and aligning the decision with the legal provisions and precedents set by higher authorities in response to the COVID-19 situation.
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