Extension granted for Insolvency Resolution Process due to COVID-19 impact, with new deadline set.

The judgment granted a 90-day extension for the completion of the Insolvency Resolution Process of the Corporate Debtor, considering the impact of the COVID-19 pandemic and regulatory amendments excluding lockdown periods from the timeline calculations. The Resolution Professional's application for the extension was supported by a resolution passed in the Committee of Creditors meeting with unanimous approval. The new deadline for completion was set for December 3, 2020, taking into account the exclusion of 98 days due to lockdown periods.

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Issues:
Extension of time limit for completion of Insolvency Resolution Process of the Corporate Debtor under Section 12 of the Insolvency and Bankruptcy Code, 2016.

Analysis:
The judgment involves the Resolution Professional (RP) filing an application seeking an extension of the time limit for completing the Insolvency Resolution Process of the Corporate Debtor. The Corporate Debtor, Nithin Grains and Mills Private Limited, had defaulted on a financial debt, leading to the initiation of Corporate Insolvency Resolution Process (CIRP). The Interim Resolution Professional (IRP) was appointed, and the Committee of Creditors was constituted, with Bank of India being the sole financial creditor with a substantial claim.

The IRP conducted several Committee of Creditors (CoC) meetings, during which various decisions were made, including the recommendation for the appointment of a new Resolution Professional (RP), which was initially dismissed but later allowed on appeal. Subsequently, additional financial creditors were admitted, and the CoC was reconstituted with new voting powers.

Due to the COVID-19 pandemic and subsequent lockdowns, regulatory amendments were made to exclude lockdown periods from the CIRP timeline calculations. The RP took charge after the dismissal of the IRP's application, and the CoC meetings continued to address the progress and compliance issues in the CIRP process. A resolution was passed in the 5th CoC meeting authorizing the RP to seek an extension of 90 days for completing the resolution process.

The RP sought the Hon'ble Adjudicating Authority's approval for the extension, considering the need for additional time due to the evaluation of resolution plans and the impact of lockdown periods. The CoC's resolution for the extension, with 100% voting in favor, was presented to the Authority for consideration. The judgment granted the extension of 90 days for the CIRP, taking into account the exclusion of 98 days due to lockdown periods, resulting in the new deadline for completion being December 3, 2020.

Overall, the judgment addresses the procedural and regulatory aspects of the CIRP, the impact of external factors like the COVID-19 pandemic, and the necessary extensions required for the successful completion of the insolvency resolution process for the Corporate Debtor.

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