Insolvency And Bankruptcy Laws: Key Developments

The following are the key developments including some recent case-laws in the insolvency and bankruptcy law in India i.e. the Insolvency and Bankruptcy Code (hereinafter referred to as 'the Code'):

1. Increase in threshold under Section 4 of the Code

The Central Government vide Notification No. S.O. 1205(E) dated 24th March, 2020, in exercise of the powers conferred by the proviso to Section 4 of the Code has increased the minimum amount of default (under Part-II) from Rupees One Lakh to Rupees One Crore. This means that a Financial creditor or an Operational creditor of a Corporate debtor can now initiate the Corporate Insolvency Resolution Process ("CIRP") on the occurrence of a default of minimum of Rupees One Crore. The amendment has been made on account of the COVID-19 pandemic. However, what remains unclear as of now is the plight of the pending cases before the Adjudicating Authority, which have not yet reached the stage of admission. Given the existing