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Thursday, August 13, 2020

‘Cabinet nod to suspend IBC proceedings’ initiation for 1 yr’

“The proposal is to suspend sections 7,9 and 10 of the IBC for a period of 6 months with an enabling provision allowing for it to be extended upto 1 year,” said a government official.

Written by Karunjit Singh | New Delhi | Published: June 5, 2020 4:52:53 am
Insolvency and Bankruptcy Code, Insolvency and Bankruptcy Code 2016, Insolvency and Bankruptcy Code amendment act 2019, Insolvency and Bankruptcy Code impact, ibc 2016Insolvency and Bankruptcy Code, Insolvency and Bankruptcy Code 2016, Insolvency and Bankruptcy Code amendment act 2019, Insolvency and Bankruptcy Code impact, ibc 2016 Lenders and operational creditors would not be able to initiate insolvency proceedings against companies which default on obligations on or after March 25. (Illustration: C R Sasikumar)

The union Cabinet has approved a proposal to suspend initiation of bankruptcy proceedings against companies under the Insolvency and Bankruptcy Code (IBC) for a period of six months, which could be extended to one year, sources aware of developments said.

“The proposal is to suspend sections 7,9 and 10 of the IBC for a period of 6 months with an enabling provision allowing for it to be extended upto 1 year,” said a government official, adding that under the proposed ordinance, lenders and operational creditors would not be able to initiate insolvency proceedings against companies which default on obligations on or after March 25.

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