Lok Sabha Question No. 4162 (UNSTARRED), answered on 2021-03-22
Subject: Bankrupt Companies
Ministry: CORPORATE AFFAIRS
Asked by: Manoj Rajoria

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS LOK SABHA

## UN-STARRED QUESTION NO. 4162

## ANSWERED ON MONDAY, MARCH 22, 2021/ CHAITRA 1, 1943 (SAKA)

## BANKRUPT COMPANIES QUESTION

4162.  DR. MANOJ RAJORIA:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a)  the  details  of  the  number  of  companies  declared  bankrupt  in  the  country  after  the lockdown was imposed due to Covid-19 pandemic, State -wise; and
- (b) the details of the efforts made by the Government to protect companies from bankruptcy in the country during the said period?

## ANSWER

(SHRI ANURAG SINGH THAKUR)

THE MINISTER OF STATE FOR FINANCE AND CORPORATE AFFAIRS

वित्त एिं कारपोरेट कार्य मंत्रालर् में राज्य मंत्री

(

श्री अनुराग व ंह ठाक ु र )

- (a): As per Information from Insolvency and Bankruptcy Board of India (IBBI) , details for the period from 01.04.2020 to 31.12.2020 is as under:
- (i) 283 firms were admitted into corporate insolvency resolution process (CIRP).
- (ii)  76  CIRPs  ended  in  resolution,  128  CIRPs  were  closed  due  to  withdrawal/appeal  or settlement and 189 CIRPs ended in liquidation.
- (iii) 30 corporate persons were dissolved/ sold as a going concern/undergone compromise or arrangement under section 230 of Companies Act, 2013 under liquidation process. Further, 59 corporate persons were dissolved under voluntary liquidation process.

The state-wise details is as per Annexure - A.

- (b): The Ministry of Corporate Affairs (MCA) has raised the threshold of default under Section 4  of  the  Insolvency  and  Bankruptcy  Code,  2016  (the  Code/  IBC)  to  Rs.  1  crore  (from  the existing  threshold  of  Rs.  1  lakh)  vide  Notification  dated  24th  March,  2020.  This  step  was taken, inter  alia,  to  assist  and  aid  the  functioning  of  Corporate  Persons  which  might  face default  owing  to  the  economic  slowdown  and  unprecedented  situation  due  to  COVID19. Further,  the  Insolvency  and  Bankruptcy  Code  (Second  Amendment)  Act,  2020  with  effect from  5 th   June  2020  provides  for  insertion  of  Section  10A  to  the  Code  for  temporary suspension of initiation of corporate insolvency resolution process (CIRP) under Section 7, 9 and 10 of the Code for a period of six months or such further period not exceeding one year from 25 th  March 2020.
- (i)  The benefit of the suspension is applicable to all those defaults of the corporate debtor that occur from 25 th  March, 2020 and till the end of period of suspension.
- (ii) Such defaults arising from 25 th  March, 2020 and till completion of suspension period will remain as nonest for the purpose of initiation of CIRP under the code as permanent carve out.
- (iii)  Section 66 has been amended to provide protection to directors from personal liability for COVID period defaults.
- (iv) The time period under section 10A of the code has been extended vide notification no. SO-4638  (E)  dated  22 nd   December,  2020  for  a  further  period  of  three  months  from  25 th December, 2020.

*****

## Annexure-A referred to in reply to part (a) of Lok Sabha Unstarred Q. No.4162 for 22.03.2021:

## (a) Outcome of CIRP:

| State/ UT            | Number of CIRPs Closed due to withdrawal/ appeal or settlement   | Number of CIRPS ending in resolution   | Number of CIRPs ended in Liquidation   |
|----------------------|------------------------------------------------------------------|----------------------------------------|----------------------------------------|
| Andhra Pradesh       | 3                                                                | -                                      | 4                                      |
| Bihar                | 1                                                                | -                                      | -                                      |
| Chandigarh           | 1                                                                | 1                                      | -                                      |
| Chhattisgarh         | 1                                                                | -                                      | -                                      |
| Dadra & Nagar Haveli | -                                                                | -                                      | 2                                      |
| Daman & Diu          | -                                                                | -                                      | 1                                      |
| Delhi                | 38                                                               | 19                                     | 58                                     |
| Goa                  | -                                                                | 3                                      | -                                      |
| Gujarat              | 21                                                               | 5                                      | 36                                     |
| Haryana              | 2                                                                | 5                                      | 1                                      |
| Himachal Pradesh     | -                                                                | -                                      | 2                                      |
| Jharkhand            | 1                                                                | -                                      | -                                      |
| Karnataka            | 4                                                                | 3                                      | 16                                     |
| Kerala               | 3                                                                | 2                                      | 3                                      |
| Madhya Pradesh       | 3                                                                | 3                                      | 4                                      |
| Maharashtra          | 20                                                               | 16                                     | 37                                     |
| Meghalaya            | -                                                                | 2                                      | -                                      |
| Punjab               | -                                                                | -                                      | 4                                      |
| Rajasthan            | 3                                                                | -                                      | -                                      |
| Tamil Nadu           | 6                                                                | 1                                      | 11                                     |
| Telangana            | 10                                                               | 5                                      | 5                                      |
| Tripura              | 2                                                                | -                                      | -                                      |
| Uttar Pradesh        | 4                                                                | 1                                      | 2                                      |
| Uttarakhand          | -                                                                | 1                                      | -                                      |
| West Bengal          | 5                                                                | 9                                      | 3                                      |
| Grand Total          | 128                                                              | 76                                     | 189                                    |

## (b): Segregated state-wise details of companies dissolved and of compromise  and arrangement under Companies Act:

| Sl. No.   | State          |   Companies dissolved/ sold as a going concern/ undergone compromise or arrangement under section 230 of Companies Act, 2013 through liquidation |   Companies dissolved through Voluntary Liquidation |
|-----------|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|
| 1         | Andhra Pradesh |                                                                                                                                                1 |                                                   0 |
| 2         | Delhi          |                                                                                                                                                3 |                                                  13 |
| 3         | Gujarat        |                                                                                                                                                6 |                                                  10 |
| 4         | Haryana        |                                                                                                                                                2 |                                                   0 |
| 5         | Karnataka      |                                                                                                                                                9 |                                                  16 |
| 6         | Kerala         |                                                                                                                                                0 |                                                   1 |
| 7         | Maharashtra    |                                                                                                                                                2 |                                                   8 |
| 8         | Madhya Pradesh |                                                                                                                                                0 |                                                   4 |
| 9         | Punjab         |                                                                                                                                                1 |                                                   0 |
| 10        | Telangana      |                                                                                                                                                3 |                                                   3 |
| 11        | Tamil Nadu     |                                                                                                                                                2 |                                                   3 |
| 12        | West Bengal    |                                                                                                                                                1 |                                                   1 |
| Total     | Total          |                                                                                                                                               30 |                                                  59 |