Tribunal extends CIRP timeline due to COVID-19 lockdown, granting exclusion of 62 days The Tribunal granted the exclusion of 62 days from the Corporate Insolvency Resolution Process (CIRP) timeline due to the lockdown period caused by the ...
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Tribunal extends CIRP timeline due to COVID-19 lockdown, granting exclusion of 62 days
The Tribunal granted the exclusion of 62 days from the Corporate Insolvency Resolution Process (CIRP) timeline due to the lockdown period caused by the COVID-19 pandemic. The Resolution Professional's application sought to exclude 128 days from the CIRP timeline, emphasizing the difficulties faced by resolution applicants during the lockdown. The Tribunal adjusted the CIRP completion deadline to 01.10.2020, effectively extending the timeline to accommodate the delays caused by the lockdown.
Issues: - Application seeking exclusion of lockdown period from CIRP timeline
Analysis: The Interlocutory application was filed by the Resolution Professional under section 12 of the Insolvency and Bankruptcy Code, 2016, seeking exclusion of the lockdown period from 25.03.2020 till 31.07.2020 (128 days) from the maximum Corporate Insolvency Resolution Process (CIRP) period of 330 days. The application highlighted that the CIRP against the corporate debtor commenced on 08.07.2019, and various steps were taken in accordance with the regulations. The Resolution Professional informed that due to the COVID-19 pandemic situation, prospective resolution applicants faced difficulties in submitting their plans, leading to requests for multiple extensions of the submission deadline.
The Resolution Professional presented the facts to the Committee of Creditors (COC) regarding the need to seek appropriate directions from the Tribunal for the exclusion of time lost due to the pandemic situation. The application relied on Regulation 40C, which specified that the period of lockdown imposed by the Central Government due to the COVID-19 outbreak should not be counted for the timeline of activities that could not be completed during the lockdown in relation to a Corporate Insolvency Resolution Process. The Resolution Professional sought the exclusion of 128 days from the CIRP timeline, considering the challenges faced by the resolution applicants during the lockdown period.
During the hearing, the Tribunal considered the arguments presented by the counsel for the Resolution Professional and noted that the lockdown period from 25.03.2020 to 31.07.2020 amounted to 128 days. The Tribunal acknowledged that the lockdown had caused a delay of 62 days in the CIRP timeline, from 25.03.2020 to 25.05.2020. Consequently, the Tribunal decided to exclude these 62 days lost during the lockdown period and adjusted the CIRP completion deadline to 01.10.2020. As a result, the Tribunal disposed of the Interlocutory application No. 686 of 2020, granting the exclusion of the lockdown period from the CIRP timeline and extending the deadline for completion accordingly.
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