The implementation of the Insolvency and Bankruptcy Code, 2016 (IBC) was started on December 1, 2016 with an intent to provide a consolidated legal framework to allow resolution of the corporate debtor in a time-bound manner. The journey of the IBC right from the onset has been subjected to various challenges such as (a) reluctance on the part of the financial creditors in taking companies to the National Company Law Tribunal (NCLT) under IBC; (b) preventing backdoor entry for the promoters with significant haircut on the debt due and payable to the creditors; (c) the rights of home buyers when the real estate company ended up in NCLT; (d) difficulties in attracting investors to buy the distressed corporate debtor under a resolution plan; (e) withdrawal of the corporate insolvency resolution process post its commencement; (f) issues with respect to sharing between financial creditors and operational creditors; and (g) delay in completion of the resolution process. The Government, the Reserve Bank of India (RBI), the courts and the Insolvency and Bankruptcy Board of India (IBBI) have been addressing these challenges in a proactive manner. In fact, this has led to three amendments to the IBC by the Parliament, several amendments to the regulations by the IBBI, and the laying down of important legal principles to uphold the spirit of the IBC by the courts including the Hon’ble Supreme Court of India. In this article, we highlight some of the key developments that have taken place to address the challenges.
Amendments to the IBC
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