Extension granted to CIRP period for KUT Energy: Impact of lockdown considered. The Tribunal granted a 90-day extension to the Corporate Insolvency Resolution Process (CIRP) period of KUT Energy Private Limited, excluding the lockdown ...
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Extension granted to CIRP period for KUT Energy: Impact of lockdown considered.
The Tribunal granted a 90-day extension to the Corporate Insolvency Resolution Process (CIRP) period of KUT Energy Private Limited, excluding the lockdown period from 25.03.2020 to 31.07.2020. This decision was based on the Resolution Professional's request, supported by the Committee of Creditors' unanimous resolution, citing the impact of lockdown on the resolution process. The Tribunal's decision aligned with legal developments related to COVID-19, following orders from higher courts and regulations by the Insolvency and Bankruptcy Board of India, to accommodate the exceptional circumstances caused by the pandemic.
Issues: Extension of CIRP period due to lockdown
Analysis: The Resolution Professional of KUT Energy Private Limited filed IA No.373/2020 under Section 12 read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016 seeking a 90-day extension of the CIRP period beyond the initial 180 days, excluding the lockdown period. The CIRP proceedings began on 07.10.2019, and the 180-day period was set to end on 04.04.2020. However, due to the lockdown, the resolution could not be completed within the stipulated time frame, leading to the need for an extension.
The Committee of Creditors of the Corporate Debtor passed a resolution during their 5th CoC meeting on 12.03.2020, with 100% voting, to seek an extension of the CIRP period. This resolution was based on the potential for resolution of the Corporate Debtor. The Resolution Professional highlighted the impact of the lockdown on the proceedings and requested the extension to facilitate the resolution process effectively.
In light of the legal developments related to the COVID-19 pandemic, such as the order by the Hon'ble Supreme Court of India and the National Company Law Appellate Tribunal, which extended the period of limitation and excluded the lockdown period for legal proceedings, the Tribunal allowed the instant IA. The Tribunal relied on the orders issued by the higher courts and the regulations introduced by the Insolvency and Bankruptcy Board of India to grant a 90-day extension to the CIRP period, excluding the lockdown period from 25.03.2020 to 31.07.2020.
Therefore, the Tribunal disposed of IA No.373/2020 by granting the requested extension, acknowledging the exceptional circumstances caused by the lockdown and aligning the decision with the legal provisions and precedents set by higher authorities in response to the COVID-19 situation.
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