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2021 (2) TMI 439 - Tri - Insolvency and BankruptcySeeking extension of CIRP period by 90 days beyond 180 days after excluding the lockdown period - Section 12(2) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 40 of the IBBI Regulations 2016 - HELD THAT - The Hon'ble National Company Law Appellate Tribunal in Suo Moto-Company Appeal IN RE SUO MOTO 2020 (6) TMI 495 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI has held that the period of lockdown ordered by the Central Government and the State Governments including the period as may be extended either in whole or part of the country, where the registered office of the Corporate Debtor may be located, shall be excluded for the purpose of counting of the period for 'Resolution Process under Section 12 of the Insolvency and Bankruptcy Code, 2016, in all cases where 'Corporate Insolvency Resolution Process' has been initiated and pending before any Bench of the National Company Law Tribunal or in Appeal before this Appellate Tribunal. Thereafter, the Insolvency and Bankruptcy Board of India, inserted Regulation 40C to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, vide notification dated 29.03.2020 and the same is as Notwithstanding the time-lines contained in these regulations, but subject to the provisions in the Code, the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process. Similarly, the Insolvency and Bankruptcy Board of India, vide notification dated 20.04.2020, inserted Regulation 47 A to the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and the said regulation reads as Subject to the provisions of the Code, the period of lockdown imposed by the Central Government in the wake of Covid-19 outbreak shall not be counted for the purpose of computation of the timeline for any task that could not be completed due to such lockdown, in relation to any liquidation process. Since the facts are not disputed and in view of the orders of the Hon'ble Supreme Court of India, National Company Law Appellate Tribunal and in view of the Regulations issued by Insolvency and Bankruptcy Board of India, we allow the instant IA and extend the period of CIRP by 90 days, beyond 180 days after excluding the period from 25.03.2020 to 31.07.2020 - Application allowed.
Issues:
Extension of CIRP period under Section 12(2) of the Insolvency and Bankruptcy Code, 2016 due to lockdown. Analysis: Issue 1: Extension of CIRP Period The Resolution Professional of Jaycon Infrastructure Ltd. filed an IA seeking an extension of the Corporate Insolvency Resolution Process (CIRP) period by 90 days beyond the initial 180 days, excluding the lockdown period. The CIRP proceedings began on 07.10.2019, and the 180-day period was set to expire on 03.04.2020. Due to the lockdown, the resolution could not be completed within the stipulated time frame. Issue 2: Committee of Creditors Resolution The Committee of Creditors of the Corporate Debtor passed a resolution during its 6th meeting on 25.06.2020 to extend the CIRP period. The resolution highlighted the ample chances of resolving the Corporate Debtor's situation. This resolution was passed with the required percentage, and a copy was submitted as Annexure A-12 to the IA. Issue 3: Legal Precedents and Regulations The judgment referred to significant legal precedents and regulations. The Hon'ble Supreme Court of India, in a Suo Motu Writ Petition, extended the period of limitation due to the challenges posed by the Covid-19 pandemic. The National Company Law Appellate Tribunal also acknowledged the hardships faced by stakeholders and extended the period of lockdown for the purpose of counting the period for the Resolution Process under the Insolvency and Bankruptcy Code, 2016. Additionally, the Insolvency and Bankruptcy Board of India introduced regulations exempting the lockdown period from the timeline for completing activities related to insolvency resolution processes. Issue 4: Decision Considering the uncontested facts, the orders of the Hon'ble Supreme Court of India and the National Company Law Appellate Tribunal, and the regulations issued by the Insolvency and Bankruptcy Board of India, the Tribunal allowed the IA and extended the CIRP period by 90 days, excluding the period from 25.03.2020 to 31.07.2020. IA No.251/2020 was disposed of accordingly. This detailed analysis of the judgment showcases the legal basis, precedents, and regulations considered in granting the extension of the CIRP period due to the lockdown, ensuring a thorough understanding of the decision-making process.
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