On April 4th, 2021, the Insolvency and Bankruptcy
Board of India ("IBBI") notified the
Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021
("Ordinance") that introduces the
Pre-packaged Insolvency Resolution Process
("PPIRP") for micro, small and medium
entities ("MSMEs"). The Ordinance comes
into effect from April 4th, 2021.
Earlier, on March 25th, 2020, the Government in light
of the pandemic stressed economy, had suspended
filings of applications for initiation of the Corporate
Insolvency Resolution Process ("CIRP") in respect of
defaults arising within a period of one year from the above date.
The suspension was lifted on March 24th, 2021 and the
Ordinance was notified on the heels of the same. The main aim of
the Ordinance is to provide relief to MSMEs by way of an
alternative efficient process of insolvency, in a manner which is
least disruptive to the continuity of their businesses.
