June 08, 2020
Summary of the Ordinance passed by the President of India on 05/06/2020
Ordinance to suspend applicability of Insolvency and Bankruptcy Code, 2016 due to CoVID-19 pandemic
Citing various reasons including hampering of conduct of business operations and assigning of resolution professionals to recover the defaulting corporates due to the CoVID-19 Pandemic, an ordinance has been passed with immediate effect to suspend initiation of fresh insolvency proceedings under Sections 7,9 and 10 for a period of six months, for defaults arising on or after 25/03/2020, or such further period, not exceeding one year, as may be notified in this behalf and no application shall be filed by resolution professional under Section 66(2) of IBC in respect of such default against which initiation of corporate insolvency resolution process is suspended as per section 10A.
The Ordinance has also clearly stated the non-applicability of this amendment to any default under the said sections committed before 25/03/2020.
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