2020 (6) TMI 495 - AT - Insolvency and Bankruptcy

COVID-19 Lockdown Impact on Insolvency Resolution Process: Exclusion of Lockdown Period Ensured Timely Completion

The National Company Law Appellate Tribunal addressed the impact of the COVID-19 lockdown on the resolution process under the Insolvency and Bankruptcy ... Extension of period of limitation - prescribed timelines for taking the 'Resolution Process' to its ogical conclusion in order to obviate and mitigate such hardships - HELD THAT:- A copy of this order be communicated to Registrar of National Company Law Tribunal, New Delhi with a request to circulate the same to all Benches of NCLT across the country including the Principal Bench based at Delhi. Issues:1. Impact of COVID-19 lockdown on the resolution process under the Insolvency and Bankruptcy Code, 2016.2. Extension of period for resolution process during lockdown.3. Continuation of interim orders/stay orders during the lockdown period.Analysis:The judgment by the National Company Law Appellate Tribunal addresses the challenges posed by the COVID-19 pandemic and subsequent lockdown on the resolution process under the Insolvency and Bankruptcy Code, 2016. The Tribunal acknowledges the difficulties faced by stakeholders and the legal fraternity due to the lockdown and takes suo moto cognizance of the situation. It highlights the need to ensure the timely completion of the resolution process to mitigate hardships faced by various parties involved. The Tribunal exercises its powers under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016 to issue specific orders in this regard.Regarding the impact of the lockdown on the resolution process, the Tribunal orders that the period of lockdown, as declared by the Central and State Governments, shall be excluded for the purpose of counting the period for the 'Resolution Process' under Section 12 of the Insolvency and Bankruptcy Code, 2016. This exclusion applies to cases where the 'Corporate Insolvency Resolution Process' has been initiated and is pending before any Bench of the National Company Law Tribunal or in Appeal before the Appellate Tribunal. This decision aims to ensure that the lockdown period does not adversely affect the timelines for the resolution process.Furthermore, the Tribunal issues a directive that any interim order or stay order passed by the Appellate Tribunal in appeals under the Insolvency and Bankruptcy Code, 2016 shall continue until the next date of hearing, which will be notified later. This provision ensures that the legal status quo is maintained during the lockdown period, preserving the rights and obligations of the parties involved in the appeals. The Tribunal emphasizes the importance of communicating this order to the relevant authorities, including the Registrar of the National Company Law Tribunal and the Secretary of the Ministry of Corporate Affairs, for dissemination and compliance across all concerned entities.