The Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020 received Presidential assent on 23-09-2020.
Insolvency and Bankruptcy Code (Second Amendment) Act, 2020
Key Features:
Suspension of Initiation of Corporate Insolvency Resolution Process
In light of the extraordinary situation caused by the COVID-19 pandemic, a need was felt to temporarily suspend the initiation of the corporate insolvency resolution process under the Code, initially for a period of 6 months not exceeding one year from 25th March, 2020 to provide relief to the companies in order to recover from the financial stress.
Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 was promulgated by the president on 05-06-2020 as the Parliament was not in session at that time.
New Section 10 A replacing Sections 7, 9 and 10 [Temporary Suspension]
(a) To insert a new Section 10A in the Code to provide for temporary suspension of Sections 7, 9 and 10 in respect of any default arising on or after 25-03-2020 for a period of six months or such further period, not exceeding one year from such date, as may be notified in this behalf; and
EXPLAINER: Temporary suspension of initiation of the corporate insolvency resolution process
Amendment of Section 66
(b) to insert a new sub-section (3), in Section 66 of the Code to provide that no application shall be filed by a resolution professional under sub-section (2), in respect of such default against which initiation of the corporate insolvency resolution process is suspended as per Section 10A.
EXPLAINER: Resolution Professional from filing such an application in relation to the defaults for which initiation of CIRP has been prohibited.
Please read the Amended Act here: ACT
Ministry of Law and Justice
