2021 (6) TMI 575 - Tri - Insolvency and Bankruptcy

Seeking exclusion of time from CIRP period - HELD THAT - I.B.B.I. inserted a Regulation 40(C), thereby the time lost due to lockdown are excluded in the calculation of the Corporate Insolvency Resolution Process time frame. In view of the same, the period from 25.03.2020 till date of this application i.e., 29.09.2020 is excluded from the time frame of 270 (180 90) days of the Corporate Insolvency Resolution Process period. Relief as sought is allowed - application allowed.

Summary

Issues:
1. Application filed under Section 60(5)(C) of the Insolvency and Bankruptcy Code, 2016 for exclusion of time from CIRP period.
2. Extension of Corporate Insolvency Resolution Process (CIRP) period due to COVID-19 lockdown.
3. Exclusion of lockdown period from the CIRP timeframe.
4. Interpretation of Regulation 40(C) by IBBI for excluding lockdown time from CIRP calculation.
5. Similar reliefs sought in multiple connected applications.

Analysis:

1. The application was filed under Section 60(5)(C) of the Insolvency and Bankruptcy Code, 2016, seeking urgent listing for exclusion of time from the Corporate Insolvency Resolution Process (CIRP) period. The applicant requested orders to exclude specific periods and any future lockdown extensions to facilitate a better Resolution Plan.

2. The Corporate Insolvency Resolution Process, initiated against the Corporate Debtor, faced challenges due to the COVID-19 pandemic and nationwide lockdowns. The Resolution Professional was directed to seek an extension of the CIRP period by the Committee of Creditors (COC) during the 5th COC Meeting held on 18.02.2020.

3. The NCLT had already allowed the exclusion of the period from 25.03.2020 to 31.07.2020. The applicant emphasized the necessity of excluding the period from 31.07.2020 to 31.08.2020 from the total CIRP period for the interest of the Corporate Insolvency Resolution Process and the formulation of a robust Resolution Plan.

4. The Insolvency and Bankruptcy Board of India (IBBI) introduced Regulation 40(C) to exclude the time lost due to lockdown from the calculation of the CIRP timeframe. This regulation enabled the exclusion of the period from 25.03.2020 until the date of the application, i.e., 29.09.2020, from the total CIRP period of 270 days.

5. The Tribunal noted that similar reliefs were sought in another connected application, which was subsequently closed. However, the present application, IA No. 228/CB/2020, connected with TP No. 36/CTB/2019 arising out of CP (IB) No. 1292/KB/2019, was allowed, granting the requested reliefs for exclusion of specific periods from the CIRP timeframe to address the challenges posed by the COVID-19 pandemic and associated lockdowns.