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ARTICLE · 02 JULY 2020

Decoding The Suspension Of Insolvency And Bankruptcy Code

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The much-awaited ordinance suspending operation of the Insolvency and Bankruptcy Code, 2016 (Code) was promulgated on June 5, 2020.

IndiaInsolvency/Bankruptcy/Re-Structuring
Ramya Hariharan
Ramya Hariharan
Asmita Rakhecha
Asmita Rakhecha
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▪ The much-awaited ordinance suspending operation of the Insolvency and Bankruptcy Code, 2016 (Code) was promulgated on June 5, 2020. The Ordinance which comes into effect forthwith has introduced section 10A which suspends the operation of Sections 7, 9 and 10 of the Code for any default arising on and after March 25, 2020 for a period of six months and up to a maximum of one year. The amendment is expected to benefit corporate India which has been reeling under stress due to the lockdown as they can now focus on coming out of the red without the fear of bankruptcy proceedings looming large.

Impact of suspension of the Code

  • Introduction of Section 10A: Provisions of Section 10A will be applicable only with respect to defaults that have occurred after the commencement of the lock down. Therefore, CIRP can be initiated by a

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