What is the process for initiation of Corporate Insolvency
Resolution Process by financial creditors?
Section 10A was inserted in the Insolvency and Bankruptcy Code, 2016 (“Code”) for suspending the initiation of the corporate insolvency resolution process (“CIRP”) for any default arising on or after 25.03.2020 for a period of six months or such further period, not exceeding one year from such date. This amendment was introduced to provide relief to companies affected by COVID-19 pandemic by temporarily suspending the insolvency proceedings for a period six months i.e. w.e.f. 25.03.2020 till 25.09.2020.
Now, Ministry of Corporate Affairs vide notification dated 24.09.2020 has extended the temporary suspension of CIRP for a further period of three months i.e. w.e.f. 25.09.2020 to 25.12.2020.
As per the provisions of Section 10A, further extension of three months can still be granted further to the recent extension of three months.
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