The Ministry of Law and Justice has issued a notification dated June 5, 2020 notifying the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020.
The following sections have been inserted and the key changes are:
A) Section 10A:
i) No application for initiation of corporate insolvency resolution process (“CIRP”) shall be filed for any default arising on or after March 25, 2020 for a period of 6 months for such further period not exceeding 1 year from such date as may be notified.
ii) No application shall ever be filed for initiation of CIRP for the said default occurring during the said period.
iii) This suspension shall not apply to any default committed under Section 7 (initiation of CIRP by financial creditor), 9 (application for initiation of CIRP by operational creditor), 10 (initiation of CIRP by corporate applicant) before March 25, 2020.
B) Section 66(3): No application shall be filed by a resolution professional under Section 66(2) in respect of defaults against which initiation of CIRP is suspended under Section 10A of the Insolvency and Bankruptcy Code, 2016.
This update has been contributed by Pooja Chakrabarti (Partner) and Kiran Sharma (Associate).
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