9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (3) TMI 65 - Tri - Insolvency and BankruptcySeeking extension of period of corporate insolvency resolution process for further period of 90 days from the date of expiry of 180 days from CIRP - section 12(2) of the Insolvency and Bankruptcy Code, 2016 read with regulation 40(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT - In the facts of the present case, it is to be noted that the IBBI vide its notification dated March 29, 2020 has issued clarification regarding the period of exclusion for corporate insolvency resolution process. Through the issuance of the abovementioned notification, the IBBI has amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 to include that Regulation 40C-the period of lockdown imposed in the wake of COVID-19 outbreak shall not be counted for the purposes of the timeline for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code, 2016. In the facts of the present case, it is evident from the records that CIRP of 180 days expired on March 8, 2020. Thus, it can be inferred from the second proviso to sub-section (3) of section 12 of the IBC, 2016 that one more extension of 90 days can be granted. The decision of the hon'ble Supreme Court as rendered in Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta 2019 (11) TMI 731 - SUPREME COURT and the provision of law, the application stands allowed and the period of 90 days stands allowed from the CIRP timeline with an exclusion of time period arising of COVID-19 lockdown in consonance with the third amendment made to IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2020, dated March 29, 2020. The period from March 25, 2020 to October 31, 2020 is excluded. Application allowed.
Issues:
1. Extension of corporate insolvency resolution process under section 12(2) of the Insolvency and Bankruptcy Code, 2016. 2. Impact of Covid-19 lockdown on the timeline for completion of CIRP. 3. Interpretation of regulations and amendments related to exclusion of lockdown period in CIRP timeline. 4. Application of legal precedents in granting extension beyond the statutory limit. Issue 1: Extension of corporate insolvency resolution process The application sought an extension of 90 days from the expiry of the initial 180-day period of the corporate insolvency resolution process (CIRP). The resolution professional filed the application under section 12(2) of the Insolvency and Bankruptcy Code, 2016. The Tribunal considered the history of the CIRP initiation, constitution of the committee of creditors, and the subsequent developments in the resolution process. The Tribunal noted the resolution passed in the third meeting of the CoC, authorizing the extension and the RP to file the application for the same. Issue 2: Impact of Covid-19 lockdown The Tribunal acknowledged the Covid-19 pandemic and the lockdown announced by the Government of India from March 25, 2020. It was highlighted that the lockdown period would be excluded from the calculation of the maximum period permissible for completing the CIRP. The Tribunal considered the implications of the lockdown on the resolution process timeline and the need for adjustments due to the exceptional circumstances caused by the pandemic. Issue 3: Interpretation of regulations and amendments The Tribunal referenced the notification issued by the Insolvency and Bankruptcy Board of India (IBBI) regarding the exclusion of the lockdown period for CIRP activities. The amendment introduced regulation 40C, specifying that the lockdown period would not count towards the timeline for activities affected by the lockdown. The Tribunal analyzed the legal implications of this amendment, emphasizing its application to the case at hand and the authority under which the amendment was made. Issue 4: Application of legal precedents In considering the extension beyond the statutory limit, the Tribunal referred to the decision of the Supreme Court in Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta. The Tribunal highlighted the Supreme Court's observations regarding the extension of time in exceptional cases, balancing the interests of stakeholders and the resolution of stressed assets within the statutory framework. The Tribunal applied the principles outlined in the legal precedent to grant the extension of 90 days from the CIRP timeline, accounting for the exclusion of the lockdown period. In conclusion, the Tribunal allowed the application for extension, considering the statutory provisions, regulatory amendments, impact of Covid-19 lockdown, and legal precedents. The extension of 90 days from the CIRP timeline was granted, with the exclusion of the lockdown period, in line with the relevant regulations and the decision of the Supreme Court.
|
