“The priority is to keep the company a going concern rather than to liquidate them at the earliest”: Nirmala Sitharaman

An ordinance to amend the Insolvency and Bankruptcy Code was ordered in June. According to this ordinance, insolvency proceedings could not be started against any defaulter for 6 months.

An ordinance to amend the Insolvency and Bankruptcy Code was ordered in June. According to this ordinance, insolvency proceedings could not be started against any defaulter for 6 months if the default payments had been made after the 25th of March(the day the nationwide lockdown was announced).
When queries were raised regarding the urgency to pass the ordinance, Defense Minister Nirmala Sitharaman said, “Between sessions if there is a need for ordinance because the ground situation demands it, I would think a responsive government’s duty is to at least use the ordinance to show that we are there with the people of India.”
A member of the Rajya Sabha raised a question regarding the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020. To this Smt. Sitharaman said, “The corporate debtor often has guarantors. So for comprehensive corporate insolvency resolution and liquidation we felt it was necessary that the insolvency of the corporate debtor as well as its guarantors are considered together to whatever extent it is possible.”
She said that the law is not against carrying out bankruptcy and insolvency proceedings on corporate debtors as well as personal guarantors together.