President approves ordinance to suspend IBC, offer 6-month relief to firms

Reprieve can be extended up to a year via govt notification; default committed before March 25 not to enjoy benefit

President Ram Nath Kovind on Friday approved the ordinance to amend the Insolvency and Bankruptcy Code (IBC) exempting companies from facing insolvency proceedings against any default arising for at least a six month period starting from March 25, assuring no such proceedings will ever be initiated for default during this period .  

The ordinance gives permanent protection to companies for default during these six months that can be extended up to a year through a government notification. The IBC amendment ordinance stated, “No application shall ever be filed for initiation of corporate insolvency resolution process of a corporate debtor for