Insolvency Act suspended for defaults after March 25, 2020
This Bill temporarily suspends the initiation of corporate insolvency resolution proceedings for financial defaults arising on or after March 25, 2020, to provide relief to companies affected by the COVID-19 pandemic. It replaces a previous Ordinance with a permanent law.
Corporate debtors (companies), financial creditors, operational creditors, and resolution professionals involved in insolvency proceedings under the Insolvency and Bankruptcy Code, 2016.
- Inserts a new section 10A which prohibits filing applications for corporate insolvency resolution for defaults arising on or after March 25, 2020, for a period of six months or up to one year as notified by the Central Government.
- Clarifies that this suspension does not apply to defaults committed before March 25, 2020.
- Amends section 66 to prevent resolution professionals from filing applications for liquidation regarding defaults covered by the suspension in section 10A.
- Grants the Central Government the power to notify the specific duration of the suspension (not exceeding one year from March 25, 2020).
- Repeals the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020, while validating actions taken under it.
Written from the document by AI, and checked against it. The original below is authoritative.
Where this law is now — Became law (Act)
The original document
Document details
| Official title | The Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020 |
| Source body | Parliament of India — Bills (Lok Sabha & Rajya Sabha) |
| Reference number | XXXI |
| Status | closed (bill) |
| Year | 2020 |
| Closing date | — |
| Documents | 2 |