TMI Blog2021 (6) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... (Liquidation Process) Regulations, 2016. Exclusion of time spent in the scheme process - HELD THAT:- Regulation 2B(2) of the Liquidation Process Regulations provides for exclusion of time taken with respect to compromise or arrangement, in computation of the liquidation period. It also prescribes a period of only ninety days, counted from the liquidation commencement date, for the completion of the process. As Regulation 2B was introduced pursuant to the Amendment Regulations, its provisions are admittedly inapplicable to the present case - order of liquidation was dated 06.12.2018. Hence, as per the time frame, the liquation period is two years, the liquidation ought to be completed on or before 05.12.2020. Since the country has been under pandemic period due to covid 19 and resultant lockdown of the nation'' the time frames have been excluded since 25th march, 2020. The liquidation can be completed well within the time frames. The loss of 367 days in litigation will not impact the time frames for completion of the liquidation process. Further, the lock down has not been full lifted. Hence, there are ample time on the hands of the liquidator to diligently complete th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ena Engitec Private Limited ( MEPL ) before the Hon'ble National Company Law Appellate Tribunal ( NCLAT ) challenging the Liquidation Order. The Hon'ble NCLAT passed an interim order on 22.02.2019 which states that: During the pendency of the appeal, the liquidator or the Adjudicating Authority will not sell or transfer or alienate moveable or immoveable property of the Corporate Debtor nor create any third party encumbrance on the same, without prior approval of this Appellate Tribunal. However, it will be open to the liquidator to proceed in accordance with decision of this Appellate Tribunal in 'S.C. Sekaran vs. Amit Gupta Others' decided on 29.01.2019 . 6. In the said case of S.C. Sekaran vs. Amit Gupta Ors.(Order dated January 29, 2019 in Company Appeal (AT) (Insolvency) No. 495 496 of 2018), the Hon'ble NCLAT held that: 8. In view of the provision of Section 230 and the decision of the Hon'ble Supreme Court in Meghal Homes Pvt. Ltd' and 'Swiss Ribbons Pvt. Ltd.', we direct the 'Liquidator' to proceed in accordance with law ..... Before taking steps to sell the assets of the 'corporate debtor(s) ' (companies herein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s recorded in the Interim Order of the Hon'ble NCLAT, the Liquidator forwarded the said proposal to the financial creditors (members of the erstwhile committee of creditors) ( Financial Creditors ) of the Corporate Debtor for their consideration. 10. Thereafter, the Liquidator convened a meeting of Financial Creditors on 20.05.2019, wherein the creditors updated in respect of the proceedings before the Hon'ble NCLAT and also the Liquidator and Financial Creditors deliberated and evaluated in detail on the steps required to be taken to ensure the survival of the Corporate Debtor and to prevent its liquidation. 11. Pursuant to aforesaid discussions, the Liquidator and Financial Creditors concluded that the proposal submitted by MEPL would be considered along with any other scheme received in respect of the Corporate Debtor. 12. Thereafter, the Liquidator issued a newspaper advertisement on 31.05.2019 for invitation and also in the invitation set out the eligibility criteria to ensure that prospective investor propose financial capabilities to implement the proposed Scheme. 13. Pursuant to the Invitation, the Liquidator sought expressions of interest to submit Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder(s) of liquidation dated 06.12.2018. Hence, we have no option left but to permit applicant to proceeds with the liquidation as per the Order of Adjudicating Authority dated 06.12.2018 and 03.01.2019. 20. Therefore, the liquidator shall proceed with the liquidation process of the Corporate Debtor as per order dated 06.12.2018 and 03.01.2019, in accordance with rules and in terms of Regulation of the IBBI (Liquidation Process) Regulations, 2016. In respect of the 2nd prayer for Exclusion of time spent in the scheme process :- 21. Regulation 44(1) of the Liquidation Process Regulations prescribes a period of one year for the completion of liquidator process, computed from the liquidation commencement date. If a liquidator is unable to complete the process within the period, an application ought to be made to the Adjudicating Authority to continue the liquidation specifying the additional time required along with a report setting out the reasons causing delay. 22. The timeline for completion of process, prior to amendments introduced to Regulation 44 pursuant to the Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2019 ( Amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsolvency) No: 1 of 2020 vide order dated 30.03.3030 has taken cognizance of the same and has granted reliefs. 26. Thereafter, the Insolvency and Bankruptcy Board of India, for exclusion of period of lockdown, inserted Regulation 47(A) to the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulation, 2016, vide notification dated 29.03.2020. 27. The Liquidator has the benefit of extension of time frame as narrated above. Hence, in view of the above, we are of opinion that the liquidation can be completed well within the time frames. The loss of 367 days in litigation will not impact the time frames for completion of the liquidation process. Further, the lock down has not been full lifted. Hence, there are ample time on the hands of the liquidator to diligently complete the process of liquidation. Hence, the second prayer of exclusion of 367 days is declined. 28. In view of the above, we proceed to pass the following Order. ORDER (i) The liquidator shall proceed with liquidation of the corporate debtor COSTAL PROJECTS LIMITED as per the order dated 06.12.2018 and 03.01.2019 of this Adjudicating Authority. (ii) The prayer seeking exclusion of 367 f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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