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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: (i) Whether the liquidation period of the corporate debtor should be extended. (ii) Whether the period lost during the COVID-19 lockdown should be excluded from computation of the liquidation timeline.
Issue (i): Whether the liquidation period of the corporate debtor should be extended.
Analysis: The application was moved under Regulation 44(2) of the IBBI (Liquidation Process) Regulations, 2016 and Rule 11 of the NCLT Rules, 2016. The liquidation process had not been completed within the prescribed period, and the record showed that the process had continued but certain assets remained to be realised and distributed in accordance with the Code.
Conclusion: The liquidation period was extended by six months from the date of the order, in favour of the petitioner.
Issue (ii): Whether the period lost during the COVID-19 lockdown should be excluded from computation of the liquidation timeline.
Analysis: The request for exclusion was considered in light of Regulation 47A of the IBBI (Liquidation Process) Regulations, 2016 and the suo motu extension of limitation ordered by the Supreme Court during the pandemic. The lockdown period was treated as an excluded period for the purpose of computing the liquidation timeline.
Conclusion: The lockdown period was ordered to be excluded from computation of the liquidation period, in favour of the petitioner.
Final Conclusion: The application was allowed in part, and the liquidation timeline was extended with exclusion of the relevant lockdown period from computation.
Ratio Decidendi: Where completion of liquidation is impeded by pandemic-related restrictions, the adjudicating authority may extend the liquidation period and exclude the lockdown period from computation in accordance with the applicable liquidation regulations and the binding pandemic-related limitation orders.
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