New Delhi: In a major relief for stressed companies amid the pandemic woes, the Centre on Thursday announced the suspension of fresh insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) by three more months till December.
In a gazette notification, the Ministry of Corporate Affairs (MCA) said that the suspension on operation of Section 7, 9 and 10 of the IBC has been extended.
“In exercise of the powers conferred by section 10A of the Insolvency and Bankruptcy Code, 2016, the Central Government has extended the suspension of sections 7,9, 10 of the IBC for a further period of three months,” the Minister of Finance and Corporate Affairs, Nirmala Sitharaman said in a tweet.A
She said that the decision reinforces the government’s commitment to protecting businesses.
“It also gives companies breathing time to recover from financial stress,” she said.
In June, the Union Cabinet approved the suspension, which came into effect from March 25 and was brought in through the ordinance route.
Section 7 of the IBC allows initiation of corporate insolvency resolution process by financial creditor, while Section 9 allows operational creditors to file application for initiation of insolvency process by operational creditor.
