Filing of fresh petitions under IBC to be halted

Giving major relief to the companies/establishment/industries who are much likely to be affected amidst the COVID-19 havoc, Union Cabinet, Government of India (“Cabinet”) on April 22nd 2020, gave its assent (“Assent”) to halt the filing of any fresh petitions under Section. 7, 9 and 10 of the Insolvency and Bankruptcy Code, 2016 (“Code”) temporarily for a period of six (6) months. Earlier, Ministry of Corporate Affairs, Government of India (MCA) vide its notification dated March 24, 2020 increased the threshold limit of filing IBC Petition as prescribed under section 4 of the Code from One (1) Lakh to One(1) Crore.

The main object of the Assent appears to be protection of the MSME sector which the Cabinet feels will greatly suffer after the aftermath of the COVID-19 lockdown. However, existing petitions shall in no manner be affected by this Assent. The Assent will take the form of notification once same is signed by the President of India.