Delhi High Court has issued notice in a plea challenging the validity of Insolvency and Bankruptcy Code Ordinance, 2020 whereby the operation of sections 7,9 and 10 of the IBC has been suspended.
The Division Bench of Chief Justice DN Patel and Justice Prateek Jalan has issued notice to the Ministry of Law & Justice, as well as to the Insolvency and Bankruptcy Board of India (IBBI).
Filed by Mr Rajiv Suri, the petition claims that the impugned Ordinance suspends the operation of sections 7, 9 and 10 of the IBC, depriving the corporate applicant of the ability to initiate corporate insolvency resolution process and take the benefit of the Code for resolution of its debts.
Citing the said suspension of provisions as arbitrary and malafide, the Petitioner has argued that at these extraordinary times such suspension comes across as illogical and unjustified.
It is further argued by the Petitioner that the suspension of Section 10 will further push the companies towards liquidation, discourage entrepreneurship and defeat the objectives of the Code.
It was further submitted by the Petitioner that the suspension of this Section for a period of 6 months and up to 1 year would result in further deterioration of the affairs of the corporate debtor and result in making the restructuring/ revival of the corporate debtor unviable.