COVID-19 lockdown period to be excluded from the time-limit for insolvency resolution process under Section 12 IBC: NCLAT

The National Company Law Appellate Tribunal has ordered that the period of lockdown in connection with the COVID-19 pandemic shall be excluded for the purpose of counting of the period for resolution process under Section 12 of the Insolvency and Bankruptcy Code, 2016. ."..the period of lockdown ordered by the Central Government and the State Governments including the period 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 Insolvency and Bankruptcy Code, 2016, in all cases where ‘Corporate Insolvency Resolution Process’ has been initiated and pending before any Bench of the National Company Law Tribunal or in Appeal before this Appellate Tribunal."NCLAT has ordered. .It is further clarified that any interim order/stay order passed by the NCLAT under Insolvency and Bankruptcy Code, 2016, compnay appeals and competition appeals shall continue to operate till the next date of hearing, which may be notified later..The order was passed today by a three-member Bench of Acting Chairperson, Justice Bansi Lal Bhat; Member (Judicial), Justice Anant Bijay Singh and Member (Technical), Dr Ashok Kumar Mishra. .The Bench took suo moto cognizance of the unprecedented situation arising out of spread of COVID19 virus which has been declared a pandemic..The aforementioned directions were passed on the basis that steps were required to be taken by authorities to take resolution process under IBC to its logical conclusion and to obviate and mitigate hardships faced by the stakeholders and legal fraternity. .The Insolvency and Bankruptcy Code, the Insolvency and Bankruptcy Board of India has also introduced Regulation 40C. .Period of lockdown to be excluded from timeline under IBC if activity in relation to CIRP could not be completed due to the lockdown.As per the new Regulation, the period of lockdown shall not be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process under the Insolvency & Bankruptcy Code, 2016..Read the Order: