Evaluating The Role Of Pre-Packaged Insolvency Process In India’s Corporate Restructuring Landscape
- IJLLR Journal
- May 26
- 1 min read
Aswathy Ashok, LLM, Amity Law School, Amity University, Bangalore
Jyotirmoy Banerjee, Assistant Professor, Amity Law School, Amity University, Bangalore.
ABSTRACT
The enactment of the Insolvency and Bankruptcy Code (IBC) in 2016 marked a transformative shift in India's approach to corporate insolvency, introducing a unified, time-bound framework aimed at enhancing creditor confidence and facilitating business continuity. In response to the unique challenges faced by Micro, Small, and Medium Enterprises (MSMEs), particularly exacerbated by the COVID-19 pandemic, the Indian government introduced the Pre-Packaged Insolvency Resolution Process (PPIRP) through the IBC (Amendment) Ordinance, 2021. This research paper delves into the evolution, operational dynamics, and broader implications of the PPIRP within India's insolvency regime. By integrating informal negotiations with formal legal procedures, the PPIRP offers a streamlined and efficient resolution mechanism, balancing the interests of debtors and creditors while minimizing disruptions to business operations. The study examines the roles and responsibilities of key stakeholders, including debtors, creditors, insolvency professionals, and the National Company Law Tribunal (NCLT), in the PPIRP framework. Furthermore, the paper critically analyses the advantages of the PPIRP, such as expedited resolution timelines, cost-effectiveness, and preservation of enterprise value. It also addresses potential challenges, including concerns over transparency, the risk of promoter misuse, and the current limitation of the PPIRP's applicability exclusively to MSMEs. The study thus underscores the significance of the PPIRP as a progressive step in India's insolvency framework. While acknowledging existing challenges, it advocates for policy reforms to expand the scope of the PPIRP to larger enterprises, enhance regulatory safeguards, and strengthen the role of insolvency professionals, thereby bolstering the efficacy of corporate restructuring mechanisms in India.
Keywords: PPIRP, IBC, Debtor, Creditor, NCLT, MSME.
