Reimpose moratorium on taking Cos to NCLT under IBC in the face of 2nd Covid-19 wave: ASSOCHAM to Govt

Friday, April 16, 2021

New Delhi, 16th April 2021:
ASSOCHAM has approached the 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 in the face of severe outbreak of second wave of coronavirus.
 
"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," the ASSOCHAM said in its representation to the Finance Ministry.
 
After a year-long moratorium on taking the financially stressed companies for NCLT resolution under IBC, the normalcy was restored in the last week of March 2021.
 
"The moratorium of NCLT was rightly lifted earlier in line with the opening of the economy," the ASSOCHAM said, however, adding the situation has reversed after the outbreak of the second wave of Covid-19.
 
It said the foray towards strong economic recovery, supported by timely economic and policy interventions, is now being met with a rise in COVID-19 cases across states.
 
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.    
 
The Chambers' secretary general, Mr 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.
 
 
About ASSOCHAM:
ASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. It was established by promoter Chambers, representing all regions of India. Having in its fold over 400 Chambers and Trade Associations, and serving over 4.5 lakh members across India. ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is all set to redefine the dynamics of growth and development in the Knowledge Based Economy. More information available on www.assocham.org
 
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AVDHESH SHARMA         
ASSOCHAM
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