2021 (7) TMI 437 - Tri - Insolvency and Bankruptcy

Seeking an exclusion of period of lockdown from calculation of period required for completion of Liquidation Process of the Corporate Debtor - Section 60(5) of Insolvency and Bankruptcy Code, 2016 Read with Regulation 40C of The IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and Rule 11 of NCLT Rules, 2016 - HELD THAT - The submissions of the applicant is satisfying that the liquidation period in respect of present Corporate Debtor needs to be extended. Hence the present IA is partly allowed. The liquidation period is further extended by six months from today. Further the period consumed during the lockdown period also needs to be excluded/exempted from counting the period prescribed for completing the process of liquidation as per 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 2021 and again now until further order. Application allowed.

Summary

Issues:
Exclusion of lockdown period from liquidation process calculation.

Analysis:
The application sought exclusion of 232 days from 25.03.2020 to 11.11.2020 due to the COVID-19 lockdown for calculating the liquidation process period of the Corporate Debtor. The Liquidator had filed reports and the lockdown had impacted the functioning required under the Insolvency and Bankruptcy Code, 2016. The Tribunal had admitted a petition initiating Corporate Insolvency Resolution Process (CIRP) and later liquidation proceedings against the Corporate Debtor. The lockdown led to the extension of the liquidation period by six months from the date of the order. The Tribunal referred to a suo moto decision of the Supreme Court extending the period of limitation due to the COVID-19 situation, and accordingly, excluded the lockdown period from the calculation of the liquidation process period.

The Tribunal considered the circumstances, the impact of the lockdown, and the steps taken by the Liquidator in the case. After hearing the applicant and examining the merits of the application, the Tribunal partially allowed the application. It extended the liquidation period by six months from the date of the order and excluded the lockdown period for calculating the liquidation process period based on the Supreme Court's decision regarding the extension of limitation periods due to the COVID-19 situation. The Tribunal's decision was in line with the judicial precedents of the Supreme Court and was binding on all Courts and Tribunals. Consequently, the application was allowed and disposed of accordingly.