TLI Staff
New Delhi: Debt-ridden companies should not be taken to bankruptcy court till December in view of the possible negative impact of second wave of pandemic on trade and businesses, industry body Assocham has said.
The industry lobby group has approached Finance Ministry with a plea to re-impose moratorium on taking debt-ridden companies to NCLT under the Insolvency and Bankruptcy Code till December 2021.
“Given the increasing pressure on businesses, it would be imperative to extend the NCLT moratorium until December 2021 to ensure that the pandemic does not wreak havoc on the economy,” Assocham has said in its representation to the Finance Ministry.
After a year-long moratorium on taking the financially stressed companies for NCLT resolution under Insolvency and Bankruptcy Code (IBC). normalcy was restored in the last week of March this year.
While maintaining that the moratorium of NCLT was rightly lifted last month, the prevailing situation has warranted the relief.
In view of the altered situation, placing the NCLT resolution process under suspension again till December this year is a “critical interim measure” which needs to be expedited until targeted assistance can be granted after a comprehensive assessment, said the industry body.
The chamber’s Secretary General Deepak Sood said the government and the Reserve Bank of India (RBI) had been quite proactive in extending regulatory and fiscal support to the industry, particularly the MSMEs.
“However, the second wave has brought another bout of uncertainty. Though the country is better prepared with medical infrastructure and roll out of vaccination, the economy has to be ring-fenced for the sake of protecting jobs and businesses,” he said.