Insolvency And The Value Of Data: Reconciling Asset Maximization Under The IBC With Data Protection Under The DPDP Act
Mohammad Farhat, Prestige Institute of Management & Research, Department of Law, Indore
ABSTRACT
In today's digital world, corporate insolvency has reached beyond physical assets to data including personal, transactional, and algorithmic data as a primary source of enterprise value. Notwithstanding this paradigm shift, the Indian Insolvency and Bankruptcy Code (IBC), 2016, and the Digital Personal Data Protection (DPDP) Act, 2023, do not have a coordinated framework to regulate the valuation, management, and transmission of data assets in insolvency. This paper critically analyzes the existing legal vacuum, contrasts best global practices, and suggests an integrated legal framework to achieve both asset maximization and privacy in India's insolvency regime.
With the increasing reliance of businesses on digital ecosystems, in contemporary cases of bankruptcy, what could well be the most important element within the corporation is not real estate, equipment, or inventory but the information ecosystem within which the business operates. Behavioral data of customers, algorithms for recommending products or services, transaction history, libraries of source code, logistics knowledge, and predictive tools are all part of the bedrock of business continuity. However, information assets differ fundamentally from other types of property in that they are replicable, regulated by law, and associated with fundamental rights.
Keywords: Insolvency and Bankruptcy Code (IBC), Digital Personal Data Protection Act (DPDP), Data as Asset, Corporate Insolvency, Data Valuation, Asset Maximization, Privacy Rights, Resolution Professionals, Digital Assets, Data Transfer, Insolvency Law, Information Privacy, India, Cross-Border Insolvency, Regulatory Harmonization.
