Insolvency and Bankruptcy Code: Suspending IBC may set an unhealthy precedent

COVID-19 and the ensuring disruption have thrown up a host of issues for the economy – a vexed one being survival of companies. If news reports are to be believed, with a view to provide companies some breathing space the Government is contemplating an ordinance to prevent initiation of insolvency proceedings for at least six months. Since the specifics are not known, perhaps a blanket measure could lead to unintended consequences and is not advisable.

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