Lockdown period excluded while computing CIRP: In the matter of Sudip Bhattacharya
National Company Law Appellate Tribunal
In the matter of Sudip Bhattacharya, Resolution Professional of Reliance Naval and Engineering Ltd.
Company Appeal (AT) (Insolvency) No. 858 of 2020
Order dated September 8, 2020
The resolution professional of Reliance Naval and Engineering Ltd. had filed an application before the NCLT for (a) granting an extension of 90 days to complete the corporate insolvency resolution process ('CIRP') and (b) exclude the lockdown period for computation of the CIRP.
While the NCLT granted an extension of 90 days, it refused the latter request of excluding the lockdown period. Aggrieved by the said order, the resolution professional filed an appeal before the NCLAT.
Whether the lockdown period can be excluded while computing the time period for CIRP?
The Court stated that on account of the coronavirus pandemic, a nationwide lockdown from March 23, 2020 to May 29, 2020 was imposed. Further, the state of Maharashtra (where the corporate office of the corporate debtor is located) was worst hit with most of the areas declared Red Zone culminating in an extension of lockdown till 31st August 2020.
Considering these aspects, the NCLAT excluded the period of lockdown w.e.f. from March 25, 2020, till August 31, 2020, while computing the 180 days-period of CIRP. It further clarified that the 90 days extension shall only commence after the expiry of the CIRP period of 180 days excluding the given lockdown period.