EXCLUSION OF TIMELINE BY IBBI
The IBBI on 29th March 2020, amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 to include Regulation 40C which stipulated that the period of lockdown during COVID -19 outbreak shall not be counted for the purpose of the time-line for any activity which could not be completed in relation to a Corporate Insolvency Resolution Process (CIRP). This regulation is effective from 29th March 2020.
Similarly, the IBBI on 17th April 2020 amended the Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2020 to include Regulation 47A for the Exclusion of period of lockdown. The amendment is effective from 17th April 2020. The amendment is as below:
“Exclusion of period of lockdown.
47A. Subject to the provisions of the Code, the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for the purposes of computation of the time-line for any task that could not be completed due to such lockdown, in relation to any liquidation process.”
This comes as a relief to many Insolvency Professionals and Companies, as it clears ambiguity with regard to time lines under the Code. It is in fact one of the various inevitable aspects, as the lockdown has not only caused disruptions in the economy but also posed serious legal questions with regard to extension of time, exclusion of time and also with regard to the period of time to be excluded or extended.