Tribunal Grants Exclusion of Lockdown Period in Insolvency Process

The Tribunal allowed the application under Section 60(5) of the Insolvency and Bankruptcy Code, excluding 140 days from the Corporate Insolvency Resolution Process (CIRP) period of the Corporate Debtor. The exclusion encompassed the lockdown period and the period due to the Interim Order passed by the Supreme Court. The judgment emphasizes the procedural aspects of CIRP, Resolution Professional's role, Committee of Creditors Meetings, stakeholder challenges, and authority's power to grant extensions. This decision showcases the legal framework's flexibility in addressing unforeseen delays and challenges in insolvency proceedings.

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Issues:
Application under Section 60(5) of the Insolvency and Bankruptcy Code seeking exclusion of 140 days from the Corporate Insolvency Resolution Process (CIRP) period.

Analysis:
The application was filed seeking reliefs under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, and Rule 11 of the National Company Law Tribunal Rules, 2016. The applicant, the Resolution Professional, sought exclusion of 140 days from the CIRP period of the Corporate Debtor. The CIRP was initiated against the Corporate Debtor by an Order dated 03.10.2019, appointing the Interim Resolution Professional. Public announcements were made, and Expression of Interests were invited from Resolution Applicants. In the 5th Committee of Creditors Meeting, plans submitted by Resolution Applicants were considered. An Interlocutory Application was filed for a 90-day extension in the CIRP period, which was granted by the Adjudicating Authority.

The erstwhile Director of the Corporate Debtor had challenged the initial Order before the NCLAT and the Supreme Court, leading to directions for payment. Despite extensions granted by the Supreme Court, full payment was not made within the specified period. The applicant sought exclusion of 140 days from the CIRP period, including the lockdown period and the period due to the Interim Order passed by the Supreme Court. The Tribunal allowed the application, excluding the 140 days from the CIRP period. Consequently, IA No. 265/CB/2020 connected with CP (IB) No. 54/CTB/2019 was allowed.

This judgment highlights the procedural aspects of the CIRP under the Insolvency and Bankruptcy Code, including the role of the Resolution Professional, Committee of Creditors Meetings, challenges by stakeholders, and the authority's power to grant extensions in the resolution process. The exclusion of specific days from the CIRP period due to exceptional circumstances, such as lockdown and court orders, showcases the flexibility within the legal framework to address unforeseen delays and challenges in insolvency proceedings.

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