THE INSOLVENCY AND BANKRUPTCY CODE: CHALLENGES AND REFORMS
The Insolvency and Bankruptcy Code, 2016 heralded a new and fresh approach towards insolvency resolution in the country. Justice A.K Sikri has identified two conflicting interests that face an insolvency regime. On the one hand, there is the interest of the creditors, while on the other there is the issue of restructuring or reviving of the insolvent company. Further, in balancing these two conflicting interests, lies the paramount economic interest of the nation, which can only be achieved if the interest of all the parties is safeguarded.1
Ever since it was introduced, being a completely new system, the Insolvency and Bankruptcy Code has faced its fair share of challenges. As a result, a fresh jurisprudence has emerged. This paper seeks to examine the legal issues faced, identify the possible solutions, and discuss the reforms made. It takes into account the report of the Insolvency Law Committee, the Insolvency & Bankruptcy (Amendment) Ordinance, 2018 and the Insolvency & Bankruptcy (Second Amendment) Act, 2018 from the perspective of efficient working of the Code as well as the suitability of the reforms in creating an atmosphere of ease in doing business and achieving the purposes of the Code. While many red flags were raised with regards to the functioning of the code, the author has focussed on the more pertinent issues. In doing so and for the sake of understanding, the author has chosen to trace the history of the problem, various legislative and judicial interventions up to its present status.