The Lok Sabha on Monday passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020, to ensure that fresh insolvency proceedings will not be initiated against stressed companies for at least six months starting March 25 amid the coronavirus pandemic, PTI reported. The Rajya Sabha had passed the bill on September 19.
Finance Minister Nirmala Sitharaman said the provisions will not impact insolvency proceedings initiated before March 25, when nationwide lockdown was imposed to rein in the pandemic. “We have to prevent companies facing distress on account of [the] pandemic from being pushed into insolvency,” she said. “Many other countries have extended support to the companies to help them come out of the current crisis.”
The finance minister said the changes in Sections 7, 9 and 10 of the IBC would provide relief to companies affected due to the pandemic….