Industry body Assocham on Friday urged the government to reimpose moratorium on taking debt-ridden firms to the NCLT under the IBC till December this year following the severe second wave of coronavirus. In a representation to the Finance Ministry, the chamber said that given the increasing pressure on businesses, it would be imperative to extend the NCLT (National Company Law Tribunal) moratorium to ensure that the pandemic "does not wreak havoc" on the economy.
After a year-long moratorium on taking the financially stressed companies, for the NCLT resolution under Insolvency and Bankruptcy Code (IBC), the normalcy was restored in the last week of March 2021, it added.
The moratorium was rightly lifted earlier in line with the opening of the economy, it said, 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," it said.