IGI Logo

Assocham has approached the Finance Ministry with a plea to reimpose moratorium on taking debt-ridden companies to NCLT under the Insolvency and Bankruptcy Code (IBC) 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 to the National Company Law Tribunal (NCLT) resolution under IBC, the suspension on fresh insolvency cases was lifted on March 25, 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.

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 Secretary General Assocham, Deepak Sood said the government and the Reserve Bank of India had been quite proactive in extending regulatory and fiscal support to the industry, particularly in 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, the chamber said.