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A Critical And Comparative Analysis Of The ‘Waterfall Mechanism’ Provided Under IBC 2016

A Critical And Comparative Analysis Of The ‘Waterfall Mechanism’ Provided Under The Insolvency And Bankruptcy Code of 2016

Apoorva Katti & Neha Venkatesh, CHRIST (Deemed to be University)


The Indian insolvency regime underwent a complete overhaul as a result of the enactment of the Insolvency and Bankruptcy Code of 2016. The legislation is the result of meticulous efforts and conceptualisation of inputs from various existing insolvency legislations and global law regimes, it continues to have its innate shortcomings and ambiguities and is ever- evolving in nature. On this note, this paper seeks to examine the shortcomings in the legislation. Firstly, the paper seeks to analyse the ‘waterfall mechanism’ provided under Section 53 of the Code and its failure to recognise inter se prioritisation among secured creditors and subordinate agreements. Following this, the priority of claims between financial creditors over operational creditors shall be analysed. To conclude, a comprehensive and comparative analysis of various international laws and standards shall also be presented. The authors have adopted the qualitative method of research throughout. Primarily, the paper focuses on the ambiguities surrounding Section 53 of the Code.


Indian Journal of Law and Legal Research

Abbreviation: IJLLR

ISSN: 2582-8878


Accessibility: Open Access

License: Creative Commons 4.0

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​All research articles published in The Indian Journal of Law and Legal Research are fully open access. i.e. immediately freely available to read, download and share. Articles are published under the terms of a Creative Commons license which permits use, distribution and reproduction in any medium, provided the original work is properly cited.


The opinions expressed in this publication are those of the authors. They do not purport to reflect the opinions or views of the IJLLR or its members. The designations employed in this publication and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the IJLLR.

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