Tribunal extends liquidation timeline by 90 days due to Covid-19 delays

The Tribunal granted an extension of 90 days for the completion of the liquidation process due to delays caused by the Covid-19 pandemic and associated lockdowns. The Liquidator was directed to adhere to the extended timeline and complete all tasks as per the regulations, emphasizing the importance of timely completion within the granted extension period.

---

---

Issues:
- Extension of liquidation period due to Covid-19 lockdown
- Compliance with regulations for completion of liquidation process

Extension of Liquidation Period due to Covid-19 Lockdown:
The Liquidator of a company filed an Application seeking an extension of the liquidation period due to delays caused by the Covid-19 pandemic and associated lockdowns. The Liquidator had been unable to complete the liquidation process within the stipulated two years as required by Regulation 44 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The Liquidator highlighted that various assets of the company were yet to be sold, including land, building, and machinery. Additionally, legal proceedings were pending against another company for non-completion of job work. The Liquidator relied on Regulation 47A, which excludes the lockdown period for computation of timelines in the liquidation process. The Tribunal considered these factors and extended the liquidation period by 90 days, emphasizing that the Liquidator must make every effort to complete the process within this extended timeframe and adhere to the model timelines prescribed by the IBBI.

Compliance with Regulations for Completion of Liquidation Process:
The Tribunal noted that the original Regulation 44(2) of the IBBI (Liquidation Process) Regulations, 2016 required the liquidation of the corporate debtor to be completed within two years. As the Liquidator failed to meet this deadline due to the Covid-19 pandemic and lockdowns, an application was made for an extension under Regulation 44(2). The Tribunal considered the circumstances, including the unsuccessful e-auctions and the impact of the pandemic on the liquidation process. Referring to the amended Regulation 47A, which excludes the lockdown period for timeline computation, the Tribunal granted a further extension of 90 days for the completion of the liquidation process. The Liquidator was directed to strictly adhere to the extended timeline and complete all tasks as per the IBBI regulations, with a deadline set for the completion of the process. The Tribunal allowed the application for extension, emphasizing the importance of timely completion of the liquidation process within the granted extension period.

---