We are aware that the IBBI amended the CIRP Regulations, 2016 to provide that the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to the lockdown, in relation to a corporate insolvency resolution process. This would, however, be subject to the overall time-limit provided in the Code.
Accordingly, Regulation 43C was inserted through a notification dated 29.03.2020.Vide the said amendment, it was amply clear that period of lockdown shall be excluded only for the purpose of timelines specified in the Regulations for undertaking various activities, however, the same would not have any bearing on the outer limit (i.e., 330 days as prescribed under Section 12 of the IBC, 2016) within which the entire process must be concluded.
Now, the Hon’ble National Company Law Appellate Tribunal(NCLAT) has taken suo moto cognizance of the unprecedented situation arising out of spread of COVID19 virus declared a pandemic.
The NCLAT observed that there are certain steps required to be taken by various Authorities under the IBC, 2016 or to comply with various provisions and to adhere to the prescribed timelines for taking the ‘Resolution Process’ to its logical conclusion in order to obviate and mitigate such hardships.
The NCLAT in exercise of the powers conferred by Rule 11 of National Company Law Appellate Tribunal Rules, 2016 read with its earlier decision in the matter of “Quinn Logistics India Pvt. Ltd. vs. Mack Soft Tech Pvt. Ltd. in Company Appeal (AT) (Insolvency) No.185 of 2018” decided on 08.05.2018 has ordered that-
(i) The period of lockdown ordered as may be extended either in whole or part of the country, where the registered office of the Corporate Debtor may be located, shall be excluded for the purpose of counting of the period for ‘Resolution Process under Section 12 of the IBC, 2016, in all cases where ‘Corporate Insolvency Resolution Process’ has been initiated and pending before any Bench of the NCLT or Appeal before NCLAT;
(ii) Any interim order/ stay order passed by the NCLAT in anyone or the other Appeal under the IBC, 2016 shall continue till the next date of hearing, which may be notified later.
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