The Delhi High Court Tuesday sought the Centre’s reply on a plea challenging the Insolvency and Bankruptcy Code (IBC) Ordinance which suspended proceedings against defaults arising on or after March 25 for six months in view of the COVID-19 pandemic.
A Bench of Chief Justice D.N. Patel and Justice Prateek Jalan issued notice to the Ministry of Law and the Insolvency and Bankruptcy Board of India (IBBI) seeking their stand by August 31 on the plea, which seeks setting aside of the amendment made in the IBC by the ordinance.
Central government standing counsel Amit Mahajan, appearing for the ministry, opposed the plea saying it was not maintainable.
Mahajan said the petitioner — Rajeev Suri — has been unable to show his locus for filing the instant PIL.
According to the IBC Ordinance issued on June 5, default on repayments from March 25, the day when the nationwide lockdown began to curb the spread of coronavirus infections, would not be considered for initiating insolvency proceedings for a certain period of time.
Insolvency proceedings would not be initiated for “any default arising on or after March 25, 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”, the ordinance has said.
Under the IBC, an entity can seek insolvency proceedings against a company even if the default is only for one day. This is subject to the minimum threshold of ₹1 crore. Earlier, the threshold was ₹1 lakh.
You have reached your limit for free articles this month.
To get full access, please subscribe.
Already have an account ? Sign in
Show Less Plan
Subscription Benefits Include
Today's Paper
Find mobile-friendly version of articles from the day's newspaper in one easy-to-read list.
Faster pages
Move smoothly between articles as our pages load instantly.
Unlimited Access
Enjoy reading as many articles as you wish without any limitations.
Dashboard
A one-stop-shop for seeing the latest updates, and managing your preferences.
Personalised recommendations
A select list of articles that match your interests and tastes.
Briefing
We brief you on the latest and most important developments, three times a day.
*Our Digital Subscription plans do not currently include the e-paper ,crossword, iPhone, iPad mobile applications and print. Our plans enhance your reading experience.
A letter from the Editor
Dear subscriber,
Thank you!
Your support for our journalism is invaluable. It’s a support for truth and fairness in journalism. It has helped us keep apace with events and happenings.
The Hindu has always stood for journalism that is in the public interest. At this difficult time, it becomes even more important that we have access to information that has a bearing on our health and well-being, our lives, and livelihoods. As a subscriber, you are not only a beneficiary of our work but also its enabler.
We also reiterate here the promise that our team of reporters, copy editors, fact-checkers, designers, and photographers will deliver quality journalism that stays away from vested interest and political propaganda.
Suresh Nambath