NEW DELHI: The coronavirus pandemic has pushed many struggling companies over the edge and into bankruptcy. Besides, Stay-at-home orders forced many nonessential businesses to close and weakened demand for all types of goods and services overnight
National Company Law Tribunals (NCLT) across the country admitted a total of 283 companies into insolvency amid the pandemic after the announcement of the nationwide lockdown last year.
In a written reply to the Lok Sabha, the Minister of State for Corporate Affairs, Anurag Thakur, also said that during the period of April 1, 2020 and December 31, 2020, a total of 76 corporate insolvency resolution processes (CIRP) ended in resolution, 128 CIRPs were closed due to withdrawal or appeal or settlement and 189 companies went into liquidation.
Further, the government for the time being suspended the initiation of CIRP under Section 7, 9 and 10 of the Code for a period of six months or such further period not exceeding one year from March 25, 2020. The benefit of the suspension is applicable to all those defaults of the corporate debtor that occur from March 25, 2020 and till the end of period of suspension.
Such defaults arising from March 25, 2020 and till completion of the suspension period will remain as 'non est' for the purpose of initiation of CIRP under the code as a permanent carve out.
The 283 bankruptcies declared the pandemic pertain to defaults made before March 25, 2020.
Thakur told the house that 30 corporate persons were dissolved or sold as a going concern or undergone compromise or arrangement under section 230 of Companies Act, 2013 under the liquidation process. Further, 59 corporate persons were dissolved under the voluntary liquidation process.
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