Plea against Insolvency code ordinance; Delhi HC seeks Centre stand

Team SoOLEGAL 1 Aug 2020 3:23pm

Plea against Insolvency code ordinance; Delhi HC seeks Centre stand

A new ordinance has been amended in Insolvency Bankruptcy Code which suspends the insolvency proceedings against any defaults which has arisen after March 25, 2020 for six months. On Tuesday, Delhi High Court had asked for a reply from the Centre regarding the plea challenging this particular ordinance of Insolvency Bankruptcy Code.

Chief Justice D.N. Patel and Justice Prateek Jalan were hearing the plea and had also issued notice to the Ministry of Law and Insolvency Bankruptcy Board of India asking for a reply by August 31 on a plea regarding direction to set aside the amendment made in the Insolvency Bankruptcy Code.

According to the Central Government the plea was not maintainable, and according to the petition the ordinance which suspends the insolvency resolution process is unjustified and also malafide.

The petition stated that in this lockdown situation termination of Section 10 of Insolvency Bankruptcy Code, 2016 will hamper the business enterprise and also many companies will face liquidation and hence this particular ordinance is illogical and unjustified.

According to the petition this particular ordinance violates the right of equality under Constitution of India.

According to IBC Ordinance which was issued on June 5, keeping in mind the current lockdown situation, if there is any default in payment after March 25 then there will be no insolvency proceeding for that particular default for the next six months.

Tagged: Delhi HC   Insolvency Bankruptcy Code   Justice Prateek Jalan   Chief Justice D.N. Patel   Central Government   lockdown situation  
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