Exclusion of Lockdown Period in Liquidation Process to Expedite Resolution

The Tribunal allowed the exclusion of 120 days (25.03.2020 to 22.07.2020) from the liquidation process period due to the lockdown and restrictions imposed during the Covid-19 pandemic. The decision aimed to expedite the finalization of the liquidation process, considering the challenges faced by stakeholders in submitting claims. The ruling was based on settled law and judicial precedents, emphasizing fairness and facilitating the resolution process amidst the exceptional circumstances of the pandemic.

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Issues involved:
Exclusion of lockdown period from the liquidation process period.

Detailed Analysis:

Issue 1: Exclusion of lockdown period
The case involved an application filed by the Liquidator seeking to exclude the period of lockdown and restrictions imposed due to the Covid-19 pandemic from the liquidation process period. The Liquidator cited relevant regulations and rules, including Regulation 47A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, and Rule 11 of the NCLT Rules, 2016. The Liquidator highlighted the challenges faced by stakeholders in submitting claims due to the nationwide lockdown declared by the Government of India from 25.03.2020. The Liquidator extended the time for filing claims till 22.06.2020 to accommodate the difficulties faced by claimants. The Liquidator also referred to judicial precedents, including a Supreme Court order extending the limitation period due to the pandemic.

Issue 2: Legal Basis for Exclusion
The Liquidator relied on the judgment of the Hon'ble Supreme Court and the National Company Law Appellate Tribunal, along with Regulation 47A, to support the request for exclusion of the lockdown period from the liquidation process timeline. The Supreme Court order emphasized the challenges faced by litigants due to the pandemic and extended the limitation period. The Liquidator contended that the lockdown period should not be counted for the computation of the timeline for tasks related to the liquidation process, as per Regulation 47A.

Issue 3: Decision and Directions
After considering the arguments presented and the legal provisions cited, the Tribunal found that the material facts were not in dispute, and the law on the issue was settled by the judgments referred to. Consequently, the Tribunal allowed the application seeking exclusion of 120 days (25.03.2020 to 22.07.2020) from the liquidation process period. The Liquidator was directed to expedite the finalization of the liquidation process without further delay.

In conclusion, the Tribunal granted the exclusion of the lockdown period from the liquidation process timeline, acknowledging the exceptional circumstances created by the Covid-19 pandemic and the challenges faced by stakeholders in submitting claims. The decision aimed to facilitate the resolution process and ensure fairness to all parties involved in the liquidation proceedings.

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