Suspension will be for six months at least. NEW DELHI: The Union Cabinet will likely take up this week an ordinance to amend the Insolvency and Bankruptcy Code, to prevent companies from being forced into insolvency proceedings due to default caused by the Covid-19 crisis.
“A proposal will be moved for Cabinet’s consideration this week,” a government source told ET.
The ordinance will seek to suspend the relevant provisions of IBC Sections 7, 9 and 10, to provide relief to borrowers from being dragged into insolvency. Suspension will be for six months at least. Section 7 allows a financial creditor to file for initiating the corporate insolvency resolution process against a corporate debtor. Section 9 provides for application of insolvency by an operational creditor, while Section 10 is for initiation of insolvency proceedings by a corporate applicant.
Source: indiatimes.com