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2021 (9) TMI 434 - Tri - Insolvency and BankruptcySeeking extension of period of liquidation of the Corporate Debtor by a period of one year beyond 11.04.2021 - Section 35(1)(N) of the I B Code, 2016 R/w Regulation 44(2) of the IBBI (Liquidation Process) Regulations, 2016 - HELD THAT - This Adjudicating Authority has also been taking a view that the hardship caused by the COVID-19 pandemic, the lockdown enforced by the Central and State Governments, and the resulting disruption to movement of men and material during the last few months constitute exceptional circumstances as contemplated in Section 60(5) of the Code wherein this Adjudicating Authority is empowered to pass orders as it deems fit. In view of the circumstances narrated in the Petition, the extension of time period prayed for deserves to be acceded to - the period is extended for four months from 11.04.2021 in the Liquidation - petition disposed off.
Issues:
Extension of liquidation period under I&B Code, 2016 due to COVID-19 lockdown. Detailed Analysis: Issue 1: Extension of Liquidation Period The Liquidator filed IA. No. 125 of 2021 seeking an extension of the liquidation period of the Corporate Debtor by one year beyond 11.04.2021. The application was made under Section 35(1)(N) of the I&B Code, 2016, along with Regulation 44(2) of the IBBI (Liquidation Process) Regulations, 2016. The Liquidator cited the impact of the COVID-19 lockdown on the liquidation process and requested additional time for completion. Issue 2: Background and Relevant Facts The Corporate Debtor's liquidation process was initiated under C.P. (IB) No. 48/BB/2018. The Liquidator continued the operations of the Corporate Debtor to facilitate beneficial liquidation. Efforts were made to complete a project related to Government dues with ISRO. The Liquidator also attempted to sell assets through e-auctions but faced challenges in realizing the assets fully. The lockdown period was excluded from the liquidation timeline as per Section 47A of the IBBI (Liquidation) Regulations, 2016. Issue 3: Legal Precedents and Regulations The Tribunal referred to the Supreme Court's observation regarding the extension of limitation periods due to the COVID-19 pandemic. Regulation 47A was inserted into the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, to exclude the lockdown period for computing timelines in liquidation processes. Issue 4: Tribunal's Decision After considering the pleadings and provisions, the Tribunal acknowledged the exceptional circumstances caused by the pandemic and lockdown. It exercised its authority under Section 60(5) of the Code to grant an extension. The Tribunal granted a four-month extension from 11.04.2021 for the liquidation process and directed the Liquidator to expedite the finalization without further delay. In conclusion, the Tribunal allowed the extension of the liquidation period due to the impact of the COVID-19 lockdown, emphasizing the need for expeditious completion of the liquidation process. The decision was based on the legal provisions, precedents, and the exceptional circumstances arising from the pandemic.
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