NCLT & IBC During Lockdown under COVID-19 Pandemic
The National Company Law
Tribunal (NCLT) vide its notice dated 22.03.2020 had suspended judicial
functioning and also mentioned that it would only hear matters which are
unavoidable and urgent.
In view of the extension of the
nationwide lockdown to contain COVID-19, the National Company Law Tribunal
(NCLT) has decided to maintain the status quo as it has decided to continue
hearing only unavoidable urgent matters.
“In view
of the seriousness of pandemic novel coronavirus (COVID-19) the urgent matters
at NCLT Benches shall be heard through video conference w.e.f 21.4.2020 till
the lockdown ends,” the notice released on Monday said.
The
company tribunal had announced that it would not accept any fresh filings from
March 27 onward due to crowding at the filing centres. According to the notice,
all benches of the NCLT will function with a single-judge bench until the lockdown
ends.
For the
filing and listing of these matters, an application has to be filed through
email to the registry NCLT Chennai after the service of notice to the opposite
party. Thereafter, appropriate orders would be passed by the Acting President
(presiding at Chennai).The user shall file joint Memo in case of written
submission under Companies Act, 2013 & IBC, 2016.
It has
also been made very clear by this notice that the parties/counsel would not be
given a chance to make any oral submissions.
The NCLT
has asked that all advocates, litigants and others who would be part of the
hearings to dress formally while addressing the video conference.
Only certain benches would accept filings of
matters with limitation issues while other benches would consider filings
through email, the NCLT has said in the earlier notification.
The
National Company Law Appellate Tribunal (NCLAT) followed suit by shutting down
its premises and its filing counters on March 21.
Both the NCLT and the NCLAT had adjourned hearings for after the lockdown in
progressive notices, however, with the lockdown being extended, the NCLT has
decided to take up some of its pending cases.
The Insolvency and Bankruptcy Code (IBC)
on the other hand on 17th April confirmed that The 21-day lockdown imposed to
contain the spread of coronavirus will be excluded from timelines mandated by
the Insolvency and Bankruptcy Code (IBC) in the resolution process.
The Insolvency and Bankruptcy Board of India (IBBI) has inserted a
Regulation 40C in the insolvency law, called the Insolvency and
Bankruptcy Board of India Regulations 2020.
"Notwithstanding the time-lines
contained in these regulations, but subject to the provisions in 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 the
time-line for any activity that could not be completed due to such lockdown, in
relation to a corporate insolvency resolution process," the new Regulation
40C states.
The new regulation will come into
effect from March 29, 2020, IBBI said in a statement on Sunday. This means that
troubled companies will get a breather of 17 days.
Originally, the insolvency law granted
180 days to finish the resolution process, which was extensible by 90 more days
- 270 days in total. Presently, the IBC gives companies 330 days to finalise
the resolution process, including litigation and other judicial processes.
Failing which, the company will have to go to liquidation.
IBC has opened Window for Virtual
Hearing for hearing their company grievances.
The user
shall file joint Memo in case of written submission under Companies Act, 2013
& IBC, 2016. Applicant shall submit brief facts within five to ten lines
and serve the same on the opposite party along with the supporting material and
relief desired. Opposite party shall defend in the same manner and an
Application, draft points or relief expected.
Scanned
copies of evidences shall also be submitted along with the application. The
usual practice of filing rejoinder is suspended for time being. If situation
demands an interim relief shall also be provided before filing Memo.
Disclaimer:
Nothing
in this document is to be construed as a legal opinion or views of Janmejay
Singh Rajput
& Associates (JSRA), Company Secretaries, whatsoever
and the content is to be used strictly for educational/information purposes only.
Janmejay Singh Rajput,
CS, LLB, Trade Mark Attorney, Certified CSR Professional,
Member of NCLT & AT Bar Association
Janmejay Singh Rajput & Associates (JSRA)
Company Secretaries
38, Second Floor, Sant Nagar, East of Kailash,
New Delhi-110065- India
Contact No.- 011-41835558/ 9818715747
