A Critical Analysis Of The Fast Track Corporate Insolvency Resolution Process Under The Insolvency And Bankruptcy Code, 2016
- IJLLR Journal
- 5 hours ago
- 2 min read
Farha Naaz, Research Scholar, Amity Law School, Noida
Dr. Amit Dhall, Research Scholar, Amity Law School, Noida
ABSTRACT
An important advancement in India's bankruptcy system was the establishment of the Fast-Track Corporate Insolvency Resolution Process (Fast Track CIRP) under the Bankruptcy and Bankruptcy Code of 2016. This approach originated from the suggestions of the Bankruptcy Law Reforms Committee, which sought to address the special needs of certain categories of corporate debtors for whom the standard 180-day Corporate Insolvency Resolution Process (CIRP) would be unreasonably drawn out. The Committee acknowledged that a speedier and more efficient resolution timetable might benefit startups, smaller businesses, and simpler organisations by lowering costs, preserving value, and improving the overall effectiveness of the bankruptcy system. To meet this requirement, the Act established the Fast Track CIRP, which requires the resolution process to be completed within 90 days with a single extension of up to 45 days in unusual situations. This accelerated procedure is available to start-ups (apart from partnerships), unlisted companies with assets under ₹1 crore, and small enterprises as defined by the Companies Act of 2013. This approach provides a practical and quick alternative for organisations that don't need the in-depth examination often connected with bankruptcy processes. This research study critically examines the core principles, legislative objective, procedural structure, and practical outcomes of India's Fast Track CIRP. It assesses if the mechanism's goal of accelerating company recovery while upholding transparency and protecting stakeholders has been met. By evaluating its operational effectiveness and highlighting existing challenges, the research provides insights into the developing area of insolvency resolution and the possibility of further transformation.
Keywords: Corporate Recovery and Underutilization, Fast Track CIRP, Insolvency and Bankruptcy Code (IBC), MSMEs (Micro, Small, and Medium Enterprises).
