The provision is likely to require a change in the Act, according to experts.
“This is a positive step for companies.
But for companies, which were otherwise already in stress and could have found resolution under the IBC, their resolution may also be delayed due to this suspension,” said Anshul Jain, partner, PwC India. Jain also said it needed to be seen if this move would have a positive impact on privately negotiated transactions on mergers and acquisitions.
In March, Union Finance Minister Nirmala Sitharaman
had indicated the government would consider suspending the IBC for a few months if the Covid situation persisted and caused stress to businesses. Already, the default threshold for stressed companies
facing insolvency has been increased from Rs 1 lakh to Rs 1 crore.