NCLAT on computing period of CIRP

NCLAT on computing period of CIRP

The National Company Law Appellate Tribunal (NCLAT) in a rare case excluded the period of the Covid-19 induced lockdown while computing the period of CIRP. The NCLAT also clearly stated that this order will not serve as a precedent in all cases as it has been passed in the peculiar circumstances of instant case.

The Resolution Professional (appellant) was aggrieved with the order of the Adjudicating Authority National Company Law Tribunal (NCLT) Ahmedabad Bench which granted extension of 90 days to the Resolution Professional to complete the Corporate Insolvency Resolution Process (CIRP) beyond 180 days but declined to exclude the lockdown period on the ground that 90 days period of extension was still in hand.

The NCLAT bench headed by Acting Chairperson Justice Bansi Lal Bhat observed, "Having regard to the imposition of lockdown on account of outbreak of COVID-19 declared as pandemic from 23rd March, 2020 to 29th May, 2020 (Nationwide) and the fact that the State of Maharashtra where the Corporate Office of the Corporate Debtor is stated to be located has been worst hit with most of the areas declared Red Zone culminating in extension of lockdown till 31st August, 2020, the hardship was required to be mitigated by allowing the exclusion as prayed for."

The appellate authority further held that this direction will not in any case be construed as interference with the extension of 90 days' time granted by the NCLT, which shall begin only after expiry of the period of CIRP period of 180 days after excluding the period from 25th March, 2020 upto 31st August, 2020.