From Fragmentation To Framework: Evaluating The IBC’s Integration Of India’s Insolvency And Financial Laws
- IJLLR Journal
- 1 hour ago
- 1 min read
Riddhiman Mukherjee, NALSAR University of Law
Shailja Jha, NALSAR University of Law
ABSTRACT
The advent of the Insolvency and Bankruptcy Code, 2016 (IBC), has brought together India's segregated insolvency and financial regulatory system. Pre- IBC, there were several statutes, including the Recovery of Debts Due to Banks and Financial Institutions ` Act 1993 (DRT Act), the Companies Act 1956 and 2013, the SARFAESI Act, and the SICA Act (Sick Industrial Companies Act 1985). The pre-IBC regime was characterised by inefficiencies and uncertainties for creditors and investors, including developments in overlapping jurisdictions, delays, and poor recovery rates. This research paper evaluates whether the IBC is successfully harmonising these laws, resolving jurisdictional problems, and improving outcomes for stakeholders. It compares the collective, time-bound insolvency process under the IBC, with its single-window mechanism through the National Company Law Tribunal (NCLT), against the historically disparate and creditor-centric pre-IBC processes to examine the influence of the IBC on creditor recovery, investor protection, and resolution efficiency through a comparative assessment with UNCITRAL principles intending to contrast the same with cross-border insolvency. This research paper intends to find that the IBC has considerably simplified insolvency resolution, allowing for improved creditor recoveries despite some overlapping jurisdictions and regulatory uncertainties. It also intends to consider differences in the systematic solidness of the structures created under the Copyright and Bankruptcy Code 2016 and the UNCITRAL structure for cross-border insolvency. The paper offers some recommendations for further legal and institutional reforms to promote greater clarity and effectiveness of India's insolvency framework.
Keywords: Insolvency and Bankruptcy Code (IBC), Pre-IBC Regime, Creditor Recovery, Resolution Efficiency, UNCITRAL Model Law, Cross- Border Insolvency.
