Extension granted for Insolvency Resolution Process amidst COVID-19 delays.

The Hon'ble Adjudicating Authority granted a 90-day extension for the completion of the Insolvency Resolution Process of the Corporate Debtor, considering the exclusion of the lockdown period. This decision aimed to address delays caused by the COVID-19 pandemic, ensure regulatory compliance, and facilitate a successful resolution process.

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Issues involved:
Extension of time limit for completion of Insolvency Resolution Process of the Corporate Debtor under Section 12 of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:
1. The application was filed by the Resolution Professional (RP) seeking an extension of time limit for completing the Insolvency Resolution Process of the Corporate Debtor under Section 12 of the IBC, along with Regulation 40 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution process for Corporate Persons) Regulations, 2016.

2. The Corporate Debtor had defaulted in payment leading to the initiation of the Corporate Insolvency Resolution Process (CIRP) under Section 10 of the IBC. The Interim Resolution Professional (IRP) was appointed, and moratorium was declared from the date of commencement of CIRP.

3. The Interim Resolution Professional issued a Public Announcement inviting claims from creditors, and the Committee of Creditors was constituted with Bank of India as the sole financial creditor of the Corporate Debtor.

4. The IRP conducted several Committee of Creditors (CoC) meetings, and during the 3rd CoC Meeting, a recommendation was made to appoint a new Resolution Professional. However, the initial application seeking the appointment was dismissed, leading to an appeal and subsequent appointment of a new Resolution Professional.

5. Subsequent to the CoC meetings, new claims were received from financial creditors, leading to the reconstitution of the CoC with updated voting powers.

6. Due to the COVID-19 pandemic and subsequent lockdowns, the timeline for the CIRP process was affected. The Ministry of Corporate Affairs and the NCLAT issued orders excluding the lockdown period from the CIRP timeline.

7. The RP took charge after the dismissal of the IRP's application and reconstituted the CoC, filing necessary reports and progress updates before the NCLT.

8. The CoC, in its 5th meeting, decided to issue a fresh Expression of Interest (EOI) due to non-compliance with certain CIRP regulations and extended the deadline for submission of Resolution Plans.

9. The CoC passed a resolution with 100% voting power to authorize the RP to seek an extension of 90 days for the CIRP process beyond the initial 180 days, considering the possibility of receiving a resolution plan.

10. The Hon'ble Adjudicating Authority granted the extension of 90 days for the CIRP process, considering the exclusion of the lockdown period while calculating the available days for CIRP.

In conclusion, the judgment addressed the extension of the Insolvency Resolution Process timeline for the Corporate Debtor due to various factors, including the impact of the COVID-19 pandemic and subsequent lockdowns, ensuring compliance with regulations, and facilitating a successful resolution process.

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