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2021 (2) TMI 1002 - Tri - IBCSeeking extension of CIRP period by 90 days beyond 180 days after excluding the lockdown period - Section 12(2) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 40 of the IBBI Regulations 2016 - HELD THAT - The Hon'ble Supreme Court of India in Suo Motu Writ Petition IN RE COGNIZANCE FOR EXTENSION OF LIMITATION 2020 (5) TMI 418 - SC ORDER has held that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings. Thereafter, 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 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 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. The period of CIRP is extended by 90 days, beyond 180 days after excluding the period from 25.03.2020 to 31.07.2020 - application allowed.
Issues:
1. Extension of CIRP period under Section 12(2) of the Insolvency and Bankruptcy Code, 2016 due to lockdown. 2. Applicability of orders by the Hon'ble Supreme Court of India and National Company Law Appellate Tribunal regarding extension of limitation periods. 3. Interpretation and application of Regulations inserted by the Insolvency and Bankruptcy Board of India in response to the COVID-19 pandemic. Analysis: 1. The case involved a request for an extension of the Corporate Insolvency Resolution Process (CIRP) period by 90 days beyond the initial 180 days due to the impact of the lockdown. The Resolution Professional of the Corporate Debtor filed an Interim Application (IA) seeking this extension under Section 12(2) of the Insolvency and Bankruptcy Code, 2016, citing the inability to complete the resolution process within the stipulated time frame because of the lockdown. 2. The Committee of Creditors of the Corporate Debtor passed a resolution seeking the extension of the CIRP period during a meeting held on 20.06.2020, with a significant voting share in favor of the extension. The IA highlighted the resolutions passed by the Hon'ble Supreme Court of India and the National Company Law Appellate Tribunal regarding the extension of limitation periods due to the challenges posed by the COVID-19 pandemic, emphasizing the need to consider the lockdown period for calculating the CIRP timeline. 3. The judgment referenced the orders issued by the Hon'ble Supreme Court of India and the National Company Law Appellate Tribunal, which directed the exclusion of the lockdown period for the purpose of counting the period for the resolution process under the Insolvency and Bankruptcy Code, 2016. Additionally, the Insolvency and Bankruptcy Board of India introduced Regulations 40C and 47A, which specified that the lockdown period imposed by the Central Government should not be counted for the timeline of activities related to insolvency resolution and liquidation processes, respectively. 4. Considering the undisputed facts, the court allowed the IA seeking an extension of the CIRP period by 90 days, excluding the period from 25.03.2020 to 31.07.2020. The decision was based on the orders of the Hon'ble Supreme Court of India, the National Company Law Appellate Tribunal, and the Regulations issued by the Insolvency and Bankruptcy Board of India. The IA was disposed of accordingly, granting the requested extension to facilitate the completion of the resolution process for the Corporate Debtor.
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