Extension Granted for CIRP Due to COVID-19 Lockdown

The Tribunal granted the Resolution Professional's application for an extension of 90 days from the Corporate Insolvency Resolution Process (CIRP) period due to the COVID-19 lockdown. The Tribunal acknowledged the exceptional circumstances caused by the lockdown, allowing the exclusion of time to ensure the RP could effectively complete the CIRP. This extension would enable the RP to maximize asset value, prevent liquidation of the Corporate Debtor, and submit a resolution plan by 01.09.2020. The Tribunal directed the RP to promptly conclude the CIRP, with a follow-up report submission scheduled for 24.08.2020.

---

---

Issues:
1. Extension of the Corporate Insolvency Resolution Process (CIRP) period due to COVID-19 lockdown.

Analysis:
The case involved an application filed by the Resolution Professional seeking an extension of 90 days from the Corporate Insolvency Resolution Process (CIRP) period of the Corporate Debtor due to the unprecedented situation of COVID-19 and lockdown announced by the Government of India. The Resolution Professional highlighted that during the extension period, they could not function as per the Code and its regulations due to the lockdown. The RP sought an extension up to 01.09.2020 to submit a Resolution Plan. The Tribunal considered the provisions of the Insolvency and Bankruptcy Code, 2016, and the relevant rules in this regard.

The Tribunal noted that as per the provisions of the Code, an extension of 90 days after the expiry of 180 days can be granted only once. However, under exceptional circumstances, the Authority can exclude the period during which the RP was unable to continue with the CIRP due to reasons beyond their control. Referring to the decision of the Hon'ble Apex Court in a similar matter, the Tribunal acknowledged the power to consider exclusion of time from the statutory period based on sufficient justification.

Furthermore, the Tribunal cited a judgment by the Hon'ble NCLAT which outlined various grounds for excluding certain periods during the resolution process, including situations where the process is stayed by a court of law, or if no Resolution Professional is functioning, among others. Considering the impact of the nationwide lockdown due to the COVID-19 pandemic, the Tribunal found that the extraordinary circumstances justified the exclusion of time as requested by the RP. By allowing the extension, the RP would have adequate time to complete the CIRP, maximize asset value, and prevent the Corporate Debtor from liquidation.

Consequently, the Tribunal granted the application, allowing an exclusion of 90 days from the CIRP period, starting from 26.05.2020, for the RP to conclude the CIRP and submit a report expeditiously. The Tribunal directed the RP to finalize the CIRP without further delay and scheduled a follow-up report submission on 24.08.2020.

---