NCLT & IBC During Lockdown under COVID-19 Pandemic

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

Mail-id:- racs.jsa@gmail.com, info@csjanmejay.com,

www.csjanmejay.com