2021 (6) TMI 206 - Tri - Insolvency and Bankruptcy

Seeking exclusion of time from liquidation period - exclusion of Covid - 19 lockdown period - HELD THAT - Based upon the Notification issued by the Ministry of Home Affairs, Government of India dated 24.03.2020, 15.04.2020, 01.05.2020, 17.05.2020, 30.05.2020, 29.06.2020 and 29.07.2020 and the Notifications issued by the Tamil Nadu State Government in relation to lockdown being extended in the State of Tamil Nadu dated 31.07.2020, 31.08.2020, 30.09.2020, 31.10.2020 and 30.11.2020, this Authority feels that it is just and proper that the period from 24.03.2020 to 14.03.2021 is required to be excluded from the Liquidation period timelines and consequently the Liquidation period is required to be extended for a further period of 6 months and as such, after exclusion of the period from 24.03.2020 to 14.03.2021, the Liquidation period of the Corporate Debtor is extended for a period of 6 months from 04.09.2020 and the Liquidation process in relation to the Corporate Debtor is required to be completed on or before 24.02.2022. The Liquidator, in view of the extension granted, is directed to abide by the model timelines for the completion of the tasks remaining incomplete, as prescribed by IBBI in Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and thereby complete the process in all earnest and in accordance with the said Regulations including filing of reports as required, with this Tribunal. Application allowed.

Summary

Issues:
1. Extension of Liquidation Timeline
2. Exclusion of Covid-19 lockdown period
3. Compliance with IBBI (Liquidation Process) Regulations
4. Sale of assets and pending applications
5. Legal provisions and notifications regarding lockdown exclusion

Extension of Liquidation Timeline:
The Liquidator of a company filed an application seeking an extension of the Liquidation Timeline for another 6 months from a specified date. The Tribunal considered the request in light of the Regulation mandating completion within one year. Due to pending registration processes, unresolved applications, and the impact of Covid-19 lockdown, the Tribunal granted the extension, excluding the lockdown period, and set a new completion date.

Exclusion of Covid-19 lockdown period:
The Tribunal referred to the IBBI regulation allowing for the exclusion of lockdown periods from the computation of timelines due to Covid-19. Considering various government notifications and the impact of lockdown on the Liquidation Process, the Tribunal excluded the lockdown period from the timeline, extending the Liquidation period by 6 months from the original deadline.

Compliance with IBBI (Liquidation Process) Regulations:
The Liquidator had complied with various regulations by issuing public announcements, filing reports, and conducting auctions for the sale of assets. The Tribunal noted the adherence to these regulations and directed the Liquidator to continue following the model timelines for completing pending tasks within the extended period.

Sale of assets and pending applications:
The Liquidator had successfully sold assets through auctions, but certain applications, including those related to stakeholder claims and registration processes, remained pending. The Tribunal considered these factors in granting the extension and emphasized the need for the Liquidator to complete the process within the extended timeframe.

Legal provisions and notifications regarding lockdown exclusion:
The Tribunal highlighted the relevant legal provisions and government notifications regarding the exclusion of lockdown periods from the Liquidation timeline due to the Covid-19 pandemic. By considering these regulations and notifications, the Tribunal justified the extension of the Liquidation period and set a new completion date for the process.

In conclusion, the Tribunal allowed the application for an extension of the Liquidation Timeline, excluding the Covid-19 lockdown period, based on compliance with regulations, sale of assets, pending applications, and legal provisions regarding lockdown exclusion. The Liquidator was directed to complete the process within the extended period, following the prescribed timelines and regulations diligently.