2021 (5) TMI 859 - Tri - Insolvency and Bankruptcy

Seeking Extension of the Liquidation Process of the Corporate Debtor - Regulation 44(2) of The IBBI (Liquidation Process) Regulations, 2016 r/w Rule 11 of NCLT Rules, 2016 - HELD THAT - The prescribed period for completing the Liquidation Process needs to be extended. The present IA deserves to be allowed partly. Consequently, the liquidation period is extended by six months from the date of the Order. Further the period consumed during the lockdown period has to be excluded/exempted from counting the period prescribed for Liquidation period by following the suo moto decision of Hon ble Supreme Court in IN RE COGNIZANCE FOR EXTENSION OF LIMITATION 2021 (5) TMI 564 - SC ORDER by extending/exempting the period from 15th March 2020 till 14th March 21 and again now until further order. Application allowed in part.

Summary

Issues:
Extension of Liquidation Process of Corporate Debtor Vidhya Pharmachem Private Limited

Analysis:
The application sought an extension of the liquidation process of the Corporate Debtor under Regulation 44(2) of The IBBI (Liquidation Process) Regulations, 2016. The Liquidator requested exclusion of the period lost due to the lockdown declared from 25.03.2020 to 31.12.2020, as per the new IBC amendment vide Regulation 47A. Additionally, the Liquidator asked for an extension of the liquidation period starting from 17.01.2021.

The Corporate Insolvency Resolution Process (CIRP) for the Corporate Debtor was initiated on 07.05.2018, and the Liquidator was appointed on 02.08.2018. As no resolution plans were received, the Corporate Debtor was taken into liquidation under Section 33 of the I&B Code, 2016. The Liquidator began the liquidation process by issuing public announcements for claims, dealing with financial creditors, and seeking directions for asset sales.

The Liquidator reported progress in liquidating the Corporate Debtor's assets, including the sale of a property mortgaged with a bank. However, due to the COVID-19 lockdown and related restrictions, further progress in selling remaining assets was hindered. The Liquidator requested an additional year for the liquidation process as per Regulation 44(2) of the Insolvency and Bankruptcy Code, 2016, citing reasons for the delay caused by the pandemic.

After considering the Liquidator's submissions, the Tribunal extended the liquidation period by six months from the date of the order. The period during the lockdown was excluded from the calculation of the liquidation period based on a decision of the Hon'ble Supreme Court. The Tribunal referred to the Supreme Court's order extending the period of limitation for judicial proceedings due to the COVID-19 situation, and accordingly, the Liquidator's application was partly allowed and disposed of.