Suspension of fresh initiation of insolvency proceedings up to one year
[Dated 17.05.2020]
In relation to Insolvency & Bankruptcy Code(IBC) related matters, Smt. Nirmala Sitharaman said that debts related to COVID-19 shall be excluded from defaults under IBC.
“Further enhancement of ease of doing business through IBC related measures,” says Finance Minister Nirmala Sitharaman.
– The minimum threshold to initiate insolvency proceedings raised to Rs 1 crore
– Special insolvency framework for MSMEs will be notified under Section240A of the code
– Suspension of fresh initiation of insolvency proceedings up to one year depending upon the pandemic situation
– Empowering Central govt to exclude Covid-19 related debt from the definition of default under the code
Source: News18
Good question.Reqiures clarity and experts comments.
What about the case where the default takes place prior to this pandemic? Can a section 7 application be filed for the default in payment by the corporate debtor which exceeds 1 crore and the date of default is January’2020 ?