2021 (5) TMI 680 - Tri - Companies Law

Tribunal extends liquidation period by 120 days due to COVID-19, emphasizes timely closure and dissolution

In Re : Shivadutt Bannanje The Liquidator of Concur Marketing Private Limited

The Tribunal granted the exclusion of 120 days from the liquidation process period due to the COVID-19 lockdown and non-response to e-auctions. ... Seeking to grant exclusion period from 25.03.2020 to 22.07.2020 i.e., period of 120 days from the liquidation process period etc. - Section 60 (5) of the I & B Code, 2017 R/w Regulation 47A of IBBI (Liquidation Process) Regulations 2016, and Rule 11 of NCLT, Rules 2016 - HELD THAT:- The material facts of the issue are not in dispute, and the Applicant could not conclude the Liquidation in question, within stipulate time, due to the lockdown and partial lockdown imposed in the wake of Covid-19 outbreak and also non response to e-auction issued. It is settled position of Law that Adjudicating Authority is empowered to exclude certain period of time subject suitable reasons cited, for Liquidation process. Application allowed. Issues involved:Exclusion of time period from liquidation process due to COVID-19 lockdown and non-response to e-auctions.Analysis:Issue 1: Exclusion of time period from liquidation processThe Liquidator filed I.A. No. 72 of 2021 seeking exclusion of 120 days from the liquidation process period due to the COVID-19 lockdown and non-response to e-auctions. The Liquidator cited the lockdown imposed by the Government of India from 24.03.2020 to 31.05.2020, which hindered the conduct of liquidation activities. The Liquidator relied on Regulation 47A of IBBI (Liquidation Process) Regulations 2016, which excludes the lockdown period for computation of time for tasks affected by the lockdown. The Tribunal acknowledged the challenges faced by the Liquidator and the impact of the pandemic on the real estate market, leading to delays in the liquidation process. The Tribunal, after considering the reasons cited and the provisions of the Code, granted the exclusion of 120 days from the liquidation process period as requested.Issue 2: Directive to finalize liquidation processThe Tribunal directed the Liquidator to take expeditious steps to finalize the liquidation process without further delay. Despite the challenges faced, including the difficulty in selling the main asset of the Corporate Debtor and the downturn in the real estate market, the Liquidator was instructed to actively pursue the completion of the liquidation process. The Tribunal emphasized the importance of concluding the liquidation efficiently and promptly, indicating the need for proactive measures to expedite the closure of the Company and file for dissolution. The directive aimed to ensure that the liquidation process is completed in a timely manner, considering the circumstances and challenges faced by the Liquidator.In conclusion, the Tribunal granted the exclusion of 120 days from the liquidation process period due to the COVID-19 lockdown and non-response to e-auctions. Additionally, the Liquidator was directed to expedite the finalization of the liquidation process to ensure timely closure of the Company and filing for dissolution. The judgment reflects a balanced approach, considering the exceptional circumstances caused by the pandemic while emphasizing the importance of efficiently concluding the liquidation proceedings.