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Suspension of Section 7, 9 & 10 of IBC, 2016 due to outbreak of Corona Virus

Suspension of Section 7, 9 & 10 of IBC, 2016 due to outbreak of Corona Virus

The Finance Minister Nirmala Sitharaman suggested that if the situations prevailing in the country due to the outbreak of  pandemic disease of Novel Coronavirus, COVID- 19, changes for the worse in the coming future, the Central Government will consider to suspend Sections 7, 9 and 10 of the IBC, 2016 for the next 6 months i.e., till September, 2020. This is an appreciable step taken to help the companies which are being forced into the insolvency proceedings on default of loans. The limit amount has been increased to Rs. 1 crore in order to be a minimum amount of default.

Section 4 of the IBC, 2016 states that: (1) This Part shall apply to matters relating to the Insolvency and Liquidation of Corporate Debtors where the minimum amount of the default is one lakh rupees: Provided that the Central Government may, by notification, specify the minimum amount of default of higher value which shall not be more than one crore rupees. One crore rupees is the minimum amount of default for the purposes of this section.

 

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