2021 (3) TMI 25 - Tri - Insolvency and Bankruptcy

Seeking exclusion of period of lockdown to complete Corporate Insolvency Resolution Process - Section 12 (2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - It seems that RP as well as the CoC have taken needful steps as per the IBC for inviting potential Resolution Plans. However, the CoC and RP could not able to act effectively for some time due to the Nationwide lockdown and even the during phase of unlock. Therefore, we are of the view that this the present I.A. seeking exclusion of time of CIRP deserves to be allowed. Hence, it is hereby allowed. Further, the period of CIRP during the promulgation of lockdown needs to be exempted (excluded) pursuant to the notification of Central Govt. read with new amendment which took place in the Regulation of the IBBI and also by following the decision of the Hon ble NCLAT passed in suo-moto Company Appeal (AT) (Insolvency) No. 01 of 2020 dated 30.03.2020. Hence, such period is excluded - It is also a settled legal position that the period consumed in filing of the present application till its disposal can be exempted for counting of the CIRP period. The period of pendency of the present application from the date of its filing 02.07.2020 till 25.02.2021 its disposal is hereby exempted for counting of the CIRP - application allowed.

Summary

Issues:
Exclusion of lockdown period for completing Corporate Insolvency Resolution Process (CIRP).

Analysis:
1. The applicant sought exclusion of the lockdown period to complete the CIRP of the Corporate Debtor. The CIRP commenced on 19.12.2019, and the 180-day period ended on 16.06.2020 during the lockdown. The applicant filed the present application on 07.08.2020, requesting exclusion of the lockdown period for counting the CIRP duration.

2. The Resolution Professional (RP) provided details of the progress in the CIRP, including conducting CoC meetings, inviting Expression of Interests, and preparing valuation reports. However, due to the nationwide lockdown from 23.03.2020, the CoC could not explore resolution options, leading to the expiration of the 180-day CIRP period on 16.06.2020.

3. The applicant referred to a decision by the Hon'ble NCLAT and an amendment by IBBI, allowing exclusion of lockdown period for CIRP calculation. The RP informed about government notifications permitting certain activities during phased lockdown easing, emphasizing the impact of the lockdown on the CIRP process.

4. The Tribunal considered the RP's reasons for seeking exclusion of the lockdown period and acknowledged the inability of the CoC and RP to effectively progress during the lockdown and subsequent unlock phases. Consequently, the Tribunal allowed the exclusion of the lockdown period from the CIRP calculation.

5. Citing judicial precedents, the Tribunal exempted the period of filing the present application from 02.07.2020 to 25.02.2021 for counting the CIRP duration. The Tribunal granted the applicant's request for exclusion of the lockdown period and disposed of the application accordingly.