# In the matter of National Plywood Industries Limited I.A. No. 2020 In CP(IB) No. 09-GB-2018

> NCLT judgment dated 2020-04-27. Citation: TCN-2020-NCLT-01404. The case involves an application for the extension of the Corporate Insolvency Resolution…

- **Court:** NCLT
- **Order date:** 27 Apr 2020
- **Citation:** TCN-2020-NCLT-01404
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/national-plywood-industries-limited-ia-no-2020-in-cpib-no-09-gb-2018-64d52734

## Summary

### Background

The case involves an application for the extension of the Corporate Insolvency Resolution Process (CIRP) period for National Plywood Industries Limited (NPIL). The CIRP was initiated based on an order dated 26.08.2019. The initial 180-day period of CIRP expired on 22.02.2020. The Resolution Professional (RP) sought an extension of 90 days, along with a compensatory period of 25 days due to a status quo order. The RP's application was prompted by delays caused by a status quo order and the nationwide lockdown due to the COVID-19 pandemic. An appeal was filed before the NCLAT challenging the initiation of CIRP, which was initially dismissed but later remanded by the Supreme Court for fresh consideration. The RP argued that the lockdown hindered the determination of

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## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against National Plywood Industries Limited (NPIL) based on an order dated 26.08.2019. The initial 180-day CIRP period expired on 22.02.2020. An interim status quo order was passed, causing a delay of 25 days. The Resolution Professional (RP) filed an application seeking an extension of 90 days under Section 12(2) of the Insolvency and Bankruptcy Code (IBC), along with the compensatory period of 25 days. A shareholder of the Corporate Debtor filed an appeal before the NCLAT challenging the initiation of CIRP. The NCLAT initially dismissed the appeal but was later directed by the Supreme Court to reconsider the matter. The Resolution Professional conducted a CoC meeting on 25.03.2020, where 71.05% of the

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## Issues and analysis

### Issue 1: Whether the application for extension of the CIRP period under Section 12(2) of the Insolvency and …

**Ratio:** Section 12(2) of the Insolvency and Bankruptcy Code, 2016 allows for the extension of the

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**Reasoning:** The court reasoned that the status quo order and the COVID-19 pandemic had disrupted the

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**Interpretation:** Section 12(2) is interpreted to allow for flexibility in extending the CIRP

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**Application:** The court applied the ratio to the specific facts of the case, noting that the

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## Parties

- **Judges:** Jinan…
- **Appellants:** Shareholder/appell…
- **Respondents:** National Plywood…; M/s. Stressed…

## Timeline

- **2019-08-26 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) was initiated against National Plywood…
- **2019-11-25 — NCLAT Or…**: NCLAT passed an order in appeal bearing number 932 of 2019 stating that the application…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 12(2) — Time-limit for completion of insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-12)

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