The insolvency regulator IBBI has now ruled that the 40-day nationwide lockdown imposed by the Centre in the wake of COVID-19 outbreak will not be counted for the purpose of computation of timeline for any tasks under liquidation process.

It may be recalled that the Insolvency and Bankruptcy Board of India (IBBI) had in end March , announced that the national lockdown period will not be counted for the purpose of timeline of completion of any activity under the Corporate Insolvency Resolution Process (CIRP) regulations.

Describing the latest IBBI move on liquidation regulations as a proactive and positive step, Aditya Nayyar, Partner, Ortis Law Offices said that this amendment is only indicative of the fact that the insolvency regulator/ Government is reacting and implementing the various suggestions being received by it, although in a phased manner.

“The amendment would allow the liquidator to exclude the entire time period of COVID-19 lockdown from all the timelines provided under the liquidation regulations of the IBC, thereby ensuring that unnecessary defaults do not occur in the future. This move would also ensure that the NCLT is not flooded with procedural applications seeking extensions and or con donation of delay in meeting timelines, once the lockdown is relaxed and the NCLT finally reopens and even anytime thereafter, during the liquidation process”, he said.

Vidisha Krishan, Partner, MV Kini & Co, a law firm, said: “ In line with the whole regulatory mechanism which has made changes and accommodative measures for the COVID-19 lockdown and delays, IBBI too has taken several steps towards this such as suspension of sections and issuance of notification extending limitation. Up till the most recent Section 47 A which excludes any delay from the 330 days period caused due to the COVID-19 lockdown”.

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