New Delhi: The Union government on Thursday extended the suspension of three provisions of the Insolvency and Bankruptcy Code by three more months to protect those companies that have been facing difficulty due to the adverse economic impact of Covid-19.
"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," Finance Minister Nirmala Sitharaman said in a tweet.
In March this year, the Union government suspended these three sections to insulate the companies from compulsory insolvency proceedings that may be caused due to the adverse economic impact of Covid-19 virus.
The government introduced Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020 in the Parliament in this session, which was passed by both the Lok Sabha and the Rajya Sabha. However, the matter assumed urgency as the six month suspension was set to expire on Thursday (September 24, 2020), it prompted the government to extend the suspension of these three sections by three more months by way of a notification in the official gazette.
Nirmala Sitharaman said the extension of suspension of sections 7,9,10 of the IBC reinforces the Government's commitment to protecting businesses.
"It also gives companies breathing time to recover from financial stress," added the finance minister.
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