Unpacking The Shortcomings In India’s Corporate Insolvency Resolution Process Under The Insolvency And Bankruptcy Code, 2016
Malika Jain, LLM, National Law School of India University, Bengaluru
ABSTRACT
The Insolvency and Bankruptcy Code, 2016, the only current insolvency legislation in India, is deemed with a lot of expectations. It arouses the hope of rehabilitation and revival in sick companies through its Corporate Insolvency Resolution Process. CIRP seeks to achieve the dual purpose of establishing a comprehensive mechanism for the renewal and restoration of the financial health of companies and also of strengthening the position of the creditors by setting up a credit recovery mechanism.
However, the unending amendments to the Code almost every year ever since its enactment attract attention to the defects therein. The present article deals with the critical evaluation of CIRP under IBC and seeks to unfold the basic shortcomings therein. The article conducts the evaluation of CIRP on the grounds of time efficiency, role of creditors, threshold of default, flexibility, implementation and the rate of insolvency resolution.
The article firstly gives a brief introduction about IBC, its main objectives and the various amendments that have been crafted therein almost every year. Further, it offers a synoptic view of the complete CIRP under IBC. It then sets off to unpack the deficiencies of CIRP in detail on the above- mentioned grounds. Thereafter, it summarises the analysis with a conclusion that a few more amendments must be made in the Code to make CIRP more suitable and efficient for the corporate insolvency conditions in the country. Lastly, it extends certain suggestions to overcome the discussed flaws and improve the working of CIRP.
Keywords: Insolvency and Bankruptcy Code, IBC, Corporate Insolvency Resolution Process, CIRP, Insolvency resolution.
