CIRP timeline exclusion for COVID-19 disruption allowed, extending the insolvency process period under the Code.

The National Company Law Tribunal considered whether 87 days could be excluded from the 180-day Corporate Insolvency Resolution Process timeline under the Insolvency and Bankruptcy Code, 2016. The request was made under Rule 11 of the NCLT Rules, 2016 read with Regulation 40(e) of the CIRP Regulations, 2016, on the basis that COVID-19 disruption had affected the insolvency process. The Tribunal accepted the COVID-19-related difficulty and allowed exclusion of the requested period from the CIRP computation.

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Issues: Whether 87 days were liable to be excluded from the computation of the 180-day period for completion of the Corporate Insolvency Resolution Process.

Analysis: The application was moved under Rule 11 of the National Company Law Tribunal Rules, 2016 read with Regulation 40(e) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, seeking exclusion of specified periods from the statutory timeline under Section 12 of the Insolvency and Bankruptcy Code, 2016. The Tribunal noted that the COVID-19 pandemic had impacted every sector and that the exclusion sought was primarily on account of COVID-19 related disruption.

Conclusion: The Tribunal allowed exclusion of the requested period from the calculation of the CIRP timeline.

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