Artificial Intelligence (AI) has emerged as a transformative technology with the potential to revolutionize legal systems worldwide. Within the sphere of insolvency law, AI offers significant opportunities to improve efficiency, transparency, and decision-making in Corporate Insolvency Resolution Processes (CIRP). The Insolvency and Bankruptcy Code, 2016 (IBC) was enacted to ensure timely resolution of distressed corporate entities while maximizing asset value and protecting stakeholder interests. However, challenges such as delayed resolution, information asymmetry, fraudulent transactions, and low creditor recoveries continue to impede the effectiveness of the insolvency framework. This paper examines the role of Artificial Intelligence in detecting avoidance transactions, enhancing creditor recoveries, and improving insolvency administration under the IBC. Particular attention is given to preferential transactions, undervalued transactions, extortionate credit transactions, and fraudulent or wrongful trading covered under Sections 43 to 51 and Section 66 of the Code. It further evaluates the legal, ethical, and regulatory implications of AI-assisted decision-making in insolvency proceedings. Through doctrinal and comparative research methodologies, the study analyses international developments in technology-driven insolvency systems and explores the need for a regulatory framework governing the deployment of AI in insolvency resolution. The paper argues that AI can significantly assist Resolution Professionals, Committees of Creditors, and adjudicating authorities by identifying suspicious transactions, improving asset tracing, forecasting recovery outcomes, and reducing procedural inefficiencies. Nevertheless, concerns relating to algorithmic bias, accountability, transparency, data privacy, and liability require careful regulatory intervention. The study concludes by proposing an AI governance framework under the Insolvency and Bankruptcy Board of India (IBBI), incorporating human oversight, explainability, auditability, data-security safeguards, and stakeholder grievance mechanisms to ensure responsible adoption of AI technologies within insolvency proceedings while safeguarding due process and stakeholder rights.