Extension granted for liquidation process due to pending avoidances, unsold assets, and former Directors' issues. The Tribunal granted the Liquidator's application for an extension of time for the liquidation process by one year, excluding the lockdown period. The ...
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Extension granted for liquidation process due to pending avoidances, unsold assets, and former Directors' issues.
The Tribunal granted the Liquidator's application for an extension of time for the liquidation process by one year, excluding the lockdown period. The decision was based on pending avoidance applications, unsold assets of the Corporate Debtor, and complications involving former Directors and a bank lien. The Liquidator was instructed to diligently finalize the liquidation within the extended period, following prescribed timelines and regulations, with a strict directive not to seek further extensions.
Issues: Liquidator seeking extension of time for liquidation process.
The judgment pertains to an application filed by the Liquidator under section 35(1)(n) of the Insolvency and Bankruptcy Code, 2016 seeking an extension of time to continue the liquidation process. The Liquidator had been appointed following a Tribunal order in August 2019 and had undertaken various steps in the liquidation process, including receiving claims from creditors, appointing valuers, and attempting to auction the Corporate Debtor's assets. However, due to the national lockdown, the e-auction of immovable properties was canceled, leading to delays in the process. Additionally, legal proceedings against the former Directors and issues related to a bank lien further complicated the situation. The Liquidator requested an extension of the liquidation period by one year, excluding the lockdown period, to complete the process effectively.
The Tribunal considered the facts presented and noted that the avoidance applications filed by the Liquidator were pending adjudication, and the assets of the Corporate Debtor were yet to be sold. In light of these circumstances, the Tribunal deemed it appropriate to grant an extension of the liquidation period for one year, setting a new deadline for the completion of the process. The Liquidator was directed to make every effort to finalize the liquidation within the extended period and adhere to the prescribed timelines and regulations. The Tribunal emphasized the importance of timely completion and instructed the Liquidator not to seek any further extensions beyond the granted period. Ultimately, the Tribunal allowed the application for extension of time for the liquidation process, providing clear directives for the Liquidator to follow in ensuring the efficient conclusion of the proceedings.
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