The Ministry of Corporate and Finance Affairs, passed an Amendment to IBC,(Insolvency and Bankruptcy Amendment)Act,2020. And the act to come into effect from the date of Notification issued In the Official Gazzette.
As per the new amendments passed by the central Govt. in the course of Lock down and Shut down of Business operations nationwide/Worldwide due to COVID-19 pandemic effect. The IBC code itself cannot be invoked for the resolution process for a period of 6 months ie., certain provisions of the IBC Code such as sec.5,7,8,14, 29A etc., have been suspended for a period of 6 months and this change will be even for the IBC proceedings already initiated but the matter is pending for admission or no IRP/RP have been appointed prior to the amendment act shall not proceed further for a period of 6 months. But the Amendment does not give clarity on the cases which are already filed, admitted in NCLT and IRP/RP appointed for the Resolution process which have been going through the Process of resolution.
Apart from the certain important provisions of the act being kept under suspension, the amendment has also increased the limit of amount fromRs.1,00,000/- (Rupees one lakh) to Rs.1,00,00,000/- Rupees One crore to approach the IBC for resolution. It means, if your (Operational Creditor or Financial Creditor) claim against any corporate debtor is upto or within the limits of Rs.1,00,00,000/- (Rupees one Crore), you cannot approach NCLT for Resolution against the Corporate debtor.
The amendment of sec.11 permits for claims by one corporate debtor against other corporate debtor. In case if there are any claims by the one corporate debtor against another corporate debtor then such claims can be made by such corporate debtor against whom any such Insolvency proceedings are being initiated under the code.
The suspension of IBC code was issued in the wake of COIVD 19 Lockdown situation where Business could not run and to save the companies from going on into liquidation process. As the aim of the Act is to take a course of resolution and keep the Business alive and not to close down the Business permanently.