The sudden outbreak of a pandemic, which none was prepared of and none had ever imagined, have made a drastic impact in lives of many, by leaving behind traces of millions affected and even some to the extent of death.
The impact of Coronavirus has been catastrophic, impacting millions of people and also having compelling effect on the economy of every nation. This has become a wider problem with people fearing job security after the crisis and some imagining with a bleak future ahead of the crisis. Though, it seems tuff but every Country has been affected and there lies no way as to being restricted to a single country.
In India, the Government of India had imposed Lockdown from 25th March, 2020 for a period of 21 days  which has been extended twice till date. Since the beginning of the lockdown phase, a major setback could be observed in the Indian Economy where even the GDP Growth rate has been revised by Fitch to 1.8% for the Financial Year 2020-2021.
With the falling GDP and constant voyeurism towards a stifling economy, the Government of India had announced drastic amendments in the Insolvency and Bankruptcy Code, 2016 in lieu of protecting the corporate structure and formulating a way out for bringing the economy back on track after the crisis.
The Insolvency and Bankruptcy Code, 2016 could be regarded as the key player in forming a code for corporate governance.  With many looming extents of the Code, it has witnessed a significant way forward to help corporates in distress and to re-live the debt owed by corporates to its debtors. It has acted as a completely different model, which could not have been expected in the Country, but with many FDI pouring in and relative expectation of increasing the global rating for ease of doing business, the act was formulated with a guaranteed resolution within a period of 180 days at first. Later which was amended to 330 days  including all extension provided. The introduction of the act aims to provide quick redressal to the financial hardship faced by the organization while keeping in mind the interest of the creditors and work man associated. The ushering of the act and significant response in upbringing insolvency proceeding could be witnessed with the explosion of over 12000 cases at the time of enactment of the act. Moreover, the code aimed to facilitate a bridge between the debtor and the creditor and their workplan to avoid any ambit of falling under the purview of the act. With the enrollment of the act, it has been witnessed that the recovery rate has considerably increased from 26% to 48%, thereby relieving the stressed creditor to find a way out to recover the dues from the debtor through the insolvency proceedings.
The Code has somehow proved to be efficient and has benefitted both the creditors along with the destressed firms.  Considered as the last resort, IBC is expected to be utilized by more and more creditors after the corona crisis ends. So, what lies forward is the much-sighted burden on the code with relative aspect of financial crisis which may dampen the entire situation of the industries and the no-show of the lockdown upliftment which worsens the financial situation of every firms in the Country. In this time, what forms the basis is to uplift the economy after the crisis and formulating certain changes in the IBC which would act in favour of re-lifting the entire economy while providing temporary safeguards to firms in the crisis.
With India declared for a complete lockdown from 25th March, 2020, the agony of a lot of creditors could be seen as business and trade were largely to be affected. With one point where Government had even announced paying of salaries without any deduction to employees by the employer, the situation worsens. Keeping all the factors in find, the Finance Minister was very quick in her response by foregoing long withstanding demand to increase the threshold limit for initiation of insolvency proceeding from Rupees One lakh to Rupees One Crore under Section 4 of the Code.  Providing relaxation with the sole motive of curating the MSMEs (Micro, Small and Medium Enterprise), the Finance Minister had also proposed suspension of Section 7, 9 and 10 of the Code for a period of at least 6 months  to safeguard industries to face the realm of insolvency at the difficult times which the Country along with other Nations is going through. Section 7 deals with initiation of insolvency proceedings by financial creditors against the company while Section 9  and 10 gives powers to operational creditor and corporate applicants respectively.
With such act of the Government to provide a breather to the industries and more relatively to safeguard amidst the crisis, the act of suspending and further increasing the threshold limit provers to be a definite game changing move during the outburst of the pandemic.
WHAT TO EXPECT
Restricting only to the provisions of IBC, which the Government of India had contemplated, the move could be relatively accessed to have a compelling impact on the trade and industry in India. Despite a major setback is being suffered due to the crisis, but as per Industry Specialist the idea of suspending the relevant provisions of IBC, thus barring a way for the creditors to look up for a way out to sustain during the outbreak seems unreasonable with the question as to the fact that many industries were meant to be sick even before the pandemic hit the world. The suspension of Section 7 has been commendable but with different light this move has not been seen as temporary and this is supposed to make a drastic impact on the creditors for whom the debtor was already in a bleak prior to hitting of the crisis.
The notification for temporary suspension and increasing the threshold limit, may be thus expected to create a dual facet model. One with India reliving the dream of overcoming the crisis and the other being creditors left to jeopardize and resolve to different means of settlement other than the Code. The most important and broader perspective lies in looking for a promising way to resolve the crisis and in such a way, the whole act seems to be reasonable by taking into consideration the situation which could further deteriorate the aftermath of the crisis and may long overhaul the process of healing of the economy.
The second perspective also is dredged as it illustrates the harsh reality which will exist upon the creditors and especially small creditors who may be dumbstruck to find entangled to realize their debt from the corporate debtor. This situation may further exonerate with the various channels through which the creditor himself could have borrowed and later finding a way out to repay his debts in lieu of expecting to recover from the corporate debtor.
IMPACT AND WAY FORWARD
The Insolvency and Bankruptcy Code, 2016 has been classified as one of the most needed act in India to realize the debts profiling from many prospects of different industries had with its commencement had shown promising results and brought down a fear among debtors as to be brought into the realm of insolvency proceeding in case of default. This fear bought the debtors and creditors under the same roof of negotiation and further made both come up with mutual understanding and relatively design formulas to instill a continuous facilitation of trade and payment between both the parties.
The current crisis which needless to be said has impacted millions around the globe and has left the entire economy out into a turbulence where economist fear a big realm of recession which could not be confined to a single nation. In lieu of it the future of Insolvency does not seem to bear much of the desired result as the end result may be impacted with little or no buyers willing and able to purchase any debt laden industries with a promise of clearing out all debts within the time specified in the proceedings.
The current notification which aims to suspend the relevant sections of initiation of Insolvency proceedings are in a way a great step to protect the interest of the economy at large but in long haul, despite the restriction being taken of, there lies an uncertain future of the entire insolvency proceeding, as with the situation predicted the world may enter into the worst recession of all times  and this if happens to be true may also dampen the entire cause of Insolvency proceedings in India.
The aspect of the pandemic in the laws could be understood with the impact on the general law which has a drastic impact on the economy and has considerable impact on the industries. The amendment which has been made for a temporary basis is solely for the purpose of relaxing the burden on MSMEs, which was aimed for providing 50% contribution to GDP along with an idea of promulgating a legitimate job environment in the Country.  While observing the pros and cons of the decision and the impact of the crisis, it could be substantially observed with having a drastic impact on the overall procedure of Insolvency and the hardships which a small creditor might face due to the increase in threshold limit. Further more the relaxation could be taken as a positive side with promising return as Industries may find a backbone of re-establishing themselves in the interest of the long run for India’s Economy while substituting the interest of small creditors for some longing period of time, which may also be solved once the industries re-establish themselves and become competent enough to repay the existing debts.
Thus, the amendment as it could be classified is a temporary measure and the measure speaks a lot about the future of Indian Economy and how the pandemic has extensively made relative changes to create safeguards by trimming the laws in lieu of the pandemic.
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