2021 (6) TMI 159 - Tri - Insolvency and Bankruptcy

Seeking second extension of 60 days' time period beyond 270 days for completing the CIRP of the corporate debtor and exclusion of 62 days, i. e., July 1, 2020 to August 31, 2020 being the period of lockdown in computing the 330 days CIRP period - HELD THAT - In this case, the commencement of CIRP was initiated by this Adjudicating Authority vide its order dated November 7, 2019 and period of 180 days got completed on May 4, 2020. However due to outbreak of Covid-19 pandemic and its outfall, the period from March 25, 2020 to June 30, 2020 was excluded vide this Adjudicating Authority's order dated August 25, 2020. In view of the amendments brought in section 12 of the IBC, 2016 with effect from August 16, 2019 the CIRP shall be mandatorily completed within a period of 330 days from the insolvency commencement date including any extension of the period of the CIRP granted under section 12 of the IBC, 2016. Since, the CIRP period of 180 days has already been extended by another 90 days vide this Adjudicating Authority's order dated August 25, 2020 and the period of 270 days came to end on November 10, 2020 we hereby allow to complete the corporate insolvency resolution process within another 60 days with effect from the date of this order - The applicant is hereby directed to take all necessary steps to complete the CIRP within the mandatory period of 330 days, failing which the liquidation proceeding will commence. The permission is granted on having considered the steps already been taken by the RP and the current stage of CIRP in the case of the present corporate debtor, i. e., M/s. Meenakshi Energy Ltd. - Application disposed off.

Summary

Issues:
- Application for exclusion of lockdown period in CIRP computation
- Application for extension of CIRP period
- Impact of COVID-19 lockdown on CIRP process

Exclusion of Lockdown Period in CIRP Computation:
The applicant, a resolution professional, filed an application seeking an exclusion of 62 days due to the lockdown in Telangana, impacting the Corporate Insolvency Resolution Process (CIRP) period of M/s. Meenakshi Energy Ltd. The applicant highlighted various reasons for the extension, including defending litigations, correspondence with entities, and the COVID-19 lockdown's impact on operations and financial strain. The CoC authorized the application for extension, and the Tribunal allowed the exclusion of 62 days, directing completion of CIRP within 60 days from the order date to adhere to the mandatory 330-day period under the Insolvency and Bankruptcy Code.

Extension of CIRP Period:
The applicant sought a second extension of 60 days beyond the initial 270 days to complete the CIRP of the corporate debtor. The Tribunal noted the previous exclusion of days due to the COVID-19 pandemic and granted an additional 60 days for completion, emphasizing the necessity to adhere to the 330-day limit under the IBC. Failure to complete the CIRP within the extended period would lead to commencement of liquidation proceedings. The decision was based on the amendments to Section 12 of the IBC and the current stage of the CIRP for M/s. Meenakshi Energy Ltd.

Impact of COVID-19 Lockdown on CIRP Process:
The lockdown imposed in Telangana and the subsequent restrictions significantly impacted the progress of the CIRP for the corporate debtor. Site visits, negotiations, and resolution plan submissions were delayed due to the lockdown, affecting the overall timeline. The applicant faced challenges in operational activities, financial evaluations, and engaging with prospective resolution applicants. The Tribunal recognized these challenges and allowed the exclusion of specific lockdown days while emphasizing the importance of completing the CIRP within the statutory 330-day period to avoid liquidation proceedings.