The ordinance passed on June 5 by the Centre thereby suspending proceedings against defaults arising on or after March 25 for six months in view of the COVID-19 pandemic has been challenged.The Delhi High Court sought the Centre’s reply on a plea challenging the Insolvency and Bankruptcy Code (IBC) Ordinance which suspended proceedings against defaults arising on or after March 25 for...
The ordinance passed on June 5 by the Centre thereby suspending proceedings against defaults arising on or after March 25 for six months in view of the COVID-19 pandemic has been challenged.
The Delhi High Court sought the Centre’s reply on a plea challenging the Insolvency and Bankruptcy Code (IBC) Ordinance which suspended proceedings against defaults arising on or after March 25 for six months in view of the COVID-19 pandemic.
A Bench of Chief Justice D.N. Patel and Justice Prateek Jalan of the Delhi High Court have issued notice to the Ministry of Law and the Insolvency and Bankruptcy Board of India (IBBI) seeking their stand by August 31 on the plea.
However, Amit Mahajan – the standing counsel representing the Central government and appearing for the Ministry, opposed the plea saying it was not maintainable. According to him, the petitioner –Rajeev Suri – has been unable to show his locus for filing the instant Public Interest Litigation (PIL).
Under the IBC, an entity can seek insolvency proceedings against a company even if the default is only for one day subject to the minimum threshold of Rs. 1 crore.