Parliament passed the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020, with Lok Sabha passing it with a voice vote today. Earlier, Rajya Sabha had passed the bill on Saturday. The bill amends the Insolvency and Bankruptcy Code, 2016 which provides a time bound process for resolving insolvency in companies and also among individuals. The legislation seeks to temporarily suspend initiation of the corporate insolvency resolution process, CIRP under the Code. It replaces the
Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 promulgated in June this year. The Bill provides that for defaults arising during the six months from 25th of March this year, CIRP can never be initiated by either the company or its creditors. The central government may extend this period to one year through notification.
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