In Brief
The Supreme Court dismissed an appeal by an operational creditor (former CMD) seeking to initiate insolvency proceedings against a company for unpaid employment dues totalling over ₹104 crores. The issue was whether Section 10A of the Insolvency and Bankruptcy Code (inserted retroactively on 5 June 2020 to shield corporate debtors from insolvency during the Covid-19 pandemic) applies to applications filed before its insertion in respect of defaults arising after 25 March 2020. The Court held that Section 10A applies retrospectively; it bars all applications for commencement of insolvency proceedings for defaults on or after 25 March 2020 for six months (extendable to one year), regardless of when the application was filed. A purposive interpretation of the statute's object—protecting pandemic-distressed businesses—supports this reading.
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