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NCLT Ahmedabad Relaxes Timeline Of Implemented Resolution Plan Taking Note Of COVID-19 [Read Order]

LIVELAW NEWS NETWORK
31 July 2020 9:59 AM GMT
NCLT Ahmedabad Relaxes Timeline Of Implemented Resolution Plan Taking Note Of COVID-19 [Read Order]
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In a significant order, the Ahmedabad bench of the National Company Law Tribunal allowed the request of a Resolution Applicant to relax the timeline for completion of its Resolution Plan. The relief was granted by Judicial Member Manorama Kumari in view of the unprecedented lockdown and suspension of business, which adversely impacted the company's cash flow. Consortium...

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In a significant order, the Ahmedabad bench of the National Company Law Tribunal allowed the request of a Resolution Applicant to relax the timeline for completion of its Resolution Plan.

The relief was granted by Judicial Member Manorama Kumari in view of the unprecedented lockdown and suspension of business, which adversely impacted the company's cash flow.

Consortium Resolution Applicant of Shaifali Rolls Ltd. had stated that till February, 2020, it had duly submitted Audit Reports and Cash flow Statement to the Monitoring Committee appointed by the Tribunal to oversee its monthly activities under the Resolution Plan.

However, it was not possible for the applicant to meet the timeline stipulated in the Resolution Plan, amid the lockdown as there was no definite cash flow.

It had therefore requested the Tribunal to revise the timeline for four months, from the opening of the lockdown. He had also sought to exclude the period of lockdown from the timeline of its Resolution Plan.

The prayer was allowed based on the unanimous decision of all the stakeholders, who had mutually agreed to accept the default payment within 4 months, from June 12, 2020, along with interest, vide resolution dated June 15, 2020.

"Resolution Applicant shall clear the dues by October 12, 2020 and payments shall be released to the stakeholders after the approval from NCLT," they had resolved.

The Court was also alive of various regulations announced by the RBI to ease the "financial stress" caused due to the Covid crisis.

In these circumstances the Tribunal said,

"under the facts as narrated hereinabove in sequel and also in view of RBI Guidelines, the application so filed for relaxation of time frame of payment as well as completion of Resolution Plan as per meeting dated 15.06.2020 deserves to be allowed and said consensus shall be binding to all concerned parties…"

Advocate Natasha D. Shah appeared for Applicant; Advocates Vishal Dave with Nipun Singhvi for the erstwhile RP; Advocate Harmish Shah, Raju Kothari , Anip Gandhi for Respondents

Click Here To Download Order

Read Order


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