Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020
By MINISTRY OF LAW AND JUSTICE Posted On : June 05, 2020
Because of the Covid-19 impact on business and industry in the country, the President of India has promulgated an ordinance on June 5, 2020, suspending Section 7, 9 and 10 of the IBC, 2016, for initiation of corporate insolvency resolution process of a corporate debtor for any default arising on or after March 25, 2020, for a period of six months or such further period not exceeding one year.
There have been instances in other parts of the world also where such steps have been taken. The German Government has also suspended the obligation of filing insolvency till September 30, 2020. Every country is trying to ensure how it can safeguard its economy and the steps by the Indian Government in issuing this ordinance are in that direction.
The insolvency threshold has already been increased from Rs.1 lakh to Rs.1 crore. The ordinance now suspends initiation of insolvency proceedings under the three sections referred to above. The purpose of a suspension of these provisions is to safeguard the economy of the country in view of the COVID pandemic. However, the present ordinance would not affect in any manner the pending proceedings before the Adjudicating Authority, which are already undergoing restructuring and/or resolution process.
There have been instances in other parts of the world also where such steps have been taken. The German Government has also suspended the obligation of filing insolvency till September 30, 2020. Every country is trying to ensure how it can safeguard its economy and the steps by the Indian Government in issuing this ordinance are in that direction.
The insolvency threshold has already been increased from Rs.1 lakh to Rs.1 crore. The ordinance now suspends initiation of insolvency proceedings under the three sections referred to above. The purpose of a suspension of these provisions is to safeguard the economy of the country in view of the COVID pandemic. However, the present ordinance would not affect in any manner the pending proceedings before the Adjudicating Authority, which are already undergoing restructuring and/or resolution process.
For more details please visit http://www.insolindia.com/uploads_insol/resources/files/the-insolvency-and-bankruptcy-code-amendment-ordinance-2020-1102.pdf