Tribunal Extends CIR Process by 60 Days, Deducts Lockdown Period The Tribunal extended the Corporate Insolvency Resolution (CIR) process period by 60 days beyond the initial 270 days, deducting the lockdown period from ...
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Tribunal Extends CIR Process by 60 Days, Deducts Lockdown Period
The Tribunal extended the Corporate Insolvency Resolution (CIR) process period by 60 days beyond the initial 270 days, deducting the lockdown period from 25.03.2020 to 31.07.2020. The decision aligned with the Committee of Creditors' resolution and relevant legal provisions, considering the impact of the lockdown on the resolution process timeline. The Tribunal's judgment was based on legal orders and regulations related to COVID-19 extensions, ensuring a comprehensive analysis of the legal framework governing such extensions.
Issues: Extension of period for Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code due to COVID-19 lockdown.
Issue 1: Extension of CIR Proceedings Period The Resolution Professional of M/s. Kudos Chemie Ltd. filed an application seeking an extension of the Corporate Insolvency Resolution (CIR) process period beyond the initial 270 days under Section 12(3) of the Insolvency and Bankruptcy Code. The Committee of Creditors (COC) had passed a resolution with 88.74% voting share to extend the CIR process by 60 days due to the lockdown period affecting the processing of received resolution plans. The applicant sought directions for this extension, citing the lockdown's impact on the resolution process timeline.
Issue 2: Legal Framework and Orders The judgment referred to various legal orders and regulations related to the extension of timelines due to the COVID-19 lockdown. The Supreme Court's order extended the period of limitation for all legal proceedings from 15th March 2020 until further notice. The National Company Law Appellate Tribunal also issued orders excluding the lockdown period for counting the CIR process timeline. Additionally, the Insolvency and Bankruptcy Board of India introduced Regulation 40C and Regulation 47A, excluding the lockdown period from the computation of timelines for the CIR process and liquidation process, respectively.
Issue 3: Disposition of the Application Considering the legal framework, orders, and the circumstances of the case, the Tribunal disposed of the application by extending the CIR process period by 60 days beyond the initial 270 days, deducting the lockdown period from 25.03.2020 to 31.07.2020. The decision was made in line with the COC's resolution, the relevant legal provisions, and the impact of the lockdown on the resolution process timeline. The Tribunal directed the Registry to provide a copy of the order to the applicant's counsel.
This judgment addressed the extension of the Corporate Insolvency Resolution process period due to the COVID-19 lockdown, considering the legal provisions, resolutions by the COC, and orders issued by higher judicial authorities and regulatory bodies. It highlighted the impact of the lockdown on the resolution process timeline and provided a comprehensive analysis of the legal framework governing such extensions.
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