2021 (10) TMI 1033 - Tri - Insolvency and Bankruptcy

Seeking grant of extension of time to continue the liquidation process for further period of one year with the exclusion of the lockdown period - HELD THAT - It is seen from the averments made in the application, that liquidation in relation to the Corporate Debtor was ordered by this Tribunal on 27.08.2019 and as such the Liquidation period in relation to the Corporate Debtor is required to be completed on or before 27.08.2020. The Applicant in the Application has averred that the avoidance applications filed by Liquidator are yet to be adjudicated by this Tribunal and till such time the avoidance application is adjudicated, the Liquidation process in relation to the Corporate Debtor cannot be completed. Further, it is also seen that the assets of the Corporate Debtor are yet to be sold. This Authority feels that it is just and proper to extend the Liquidation period for a further period of one year and as such the Liquidation period of the Corporate Debtor is extended for a period of one year and the Liquidation process in relation to the Corporate Debtor is required to be completed on or before 20.12.2021 - Application allowed.

Summary

Issues: Liquidator seeking extension of time for liquidation process.

The judgment pertains to an application filed by the Liquidator under section 35(1)(n) of the Insolvency and Bankruptcy Code, 2016 seeking an extension of time to continue the liquidation process. The Liquidator had been appointed following a Tribunal order in August 2019 and had undertaken various steps in the liquidation process, including receiving claims from creditors, appointing valuers, and attempting to auction the Corporate Debtor's assets. However, due to the national lockdown, the e-auction of immovable properties was canceled, leading to delays in the process. Additionally, legal proceedings against the former Directors and issues related to a bank lien further complicated the situation. The Liquidator requested an extension of the liquidation period by one year, excluding the lockdown period, to complete the process effectively.

The Tribunal considered the facts presented and noted that the avoidance applications filed by the Liquidator were pending adjudication, and the assets of the Corporate Debtor were yet to be sold. In light of these circumstances, the Tribunal deemed it appropriate to grant an extension of the liquidation period for one year, setting a new deadline for the completion of the process. The Liquidator was directed to make every effort to finalize the liquidation within the extended period and adhere to the prescribed timelines and regulations. The Tribunal emphasized the importance of timely completion and instructed the Liquidator not to seek any further extensions beyond the granted period. Ultimately, the Tribunal allowed the application for extension of time for the liquidation process, providing clear directives for the Liquidator to follow in ensuring the efficient conclusion of the proceedings.