Nandakrishna M & Haniya Anwar
Students of 7th Semester BBA, LLB, School of Legal Studies
Cochin University of Science and Technology
On May 11 2016, Rajya Sabha passed the major economic reform bill – Insolvency and Bankruptcy Code 2016 (IBC), putting an end to months of anxious wait of those who look forward to single law, that would replace a host of other laws governing individual and corporate bankruptcy and insolvency. Since then, IBC focuses on providing resolution in time bound manner for maximization of value of debtor’s assets. The code has put forth an overreaching framework to aid sick companies to either wind up their business or engineer a revival plan and aid the exit of investors. This paper sets out to offer a critical analysis on corporate insolvency resolution process (CIRP) envisaged in the code. A critical approach is seen as essential here on the ground that it is impossible to evaluate areas of law or develop the law with a sense of purpose unless there is a clarity concerning the objectives and values sought. Sections 4 to 77 of Part II of the Insolvency and Bankruptcy Code, 2016 (IBC) contain provisions for Corporate Insolvency Resolution Process (CIRP) and liquidation of Corporate persons. Most important provisions as regards to initiation of CIRP and sanction of a resolution plan are contained in Sections 4 to 54. The National Company Law Tribunal [NCLT] is the Adjudicating Authority for CIRP. The paper’s aims are threefold. The initial aim is to outline the need for an effective insolvency and bankruptcy regime. The second aim is to set out a critical analysis on corporate insolvency resolution process and liquidation process. Further, the objective is to move beyond mere analysis of the law and to see whether improvements have to be sought by adopting new perspectives. In addition to it, challenges to well- functioning of CIRP has also been included. The paper also undertakes a comparison of corporate insolvency resolution framework in U. K and India, with underlying motive to highlight the similarities and differences across the law and procedures. The unified regime envisages a structured and time bound process for insolvency resolution and liquidation, which significantly improve debt recovery rates and revitalize the ailing Indian Corporate Bond markets.
Keywords: Insolvency and Bankruptcy Code, IBC, Corporate Insolvency Resolution Process, Corporate Insolvency Resolution Process, Liquidation Process