LIJDLR

Insolvency and Bankruptcy Code

EFFECTIVENESS OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016: A STUDY OF CREDITOR – DEBTOR BALANCE

Volume IV Issue I /

EFFECTIVENESS OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016: A STUDY OF CREDITOR – DEBTOR BALANCE Qifah, BBA.LLB (H.), 6th Semester, Student at Model Institute of Engineering and Technology, Jammu (India) Anmol, BBA.LLB (H.), 6th Semester, Student at Model Institute of Engineering and Technology, Jammu (India) Download Manuscript doi.org/10.70183/lijdlr.2026.v04.146 The Insolvency and Bankruptcy Code, 2016 is considered one of the important changes in business law after independence. It was created to resolve issues in the previous insolvency systems. To solve the problems IBC aimed to combine all the scattered laws into one system and created time bound process. It focused on maximising the value of company, protecting the interests of creditors and motivated people to start businesses. By giving the power to creditors IBC made the process flexible, faster, effective and introduced stringent timelines. Although the time taken to resolve the cases have been reduced from 4.3 years to 394 days in most cases and improved recovery rates as compared to earlier systems such as DRT, SARFAESI Act, and SICA challenges still continue to exist. Some of them are delays in resolving cases, increased number of cases ending in liquidation as compared to resolution, difference in treatment of creditors, low recovery, liquidation waterfall etc. The paper analyses whether IBC is able to achieve the balance between creditors and debtors. With the help of doctrinal and empirical approach the paper examines the judicial decisions (Essar steel, Swiss Ribbons, K. Sashidhar), structure of IBC, practical data and evidence. Further, legal- economic theories are also used (creditor bargain and stakeholder) to determine whether the more advantage is given to financial creditors, the impact on corporate governance and how people start their business. It also looks into how benefits and losses are distributed between operational creditors and society. The study highlights that while IBC has strengthened the rights of creditors and made businesses more responsible in taking loans or any risks, it also has created a difference between operational and financial creditors and has made people more cautious about starting or expanding a business. The paper highlights certain changes like giving protection to operational creditors, increasing the capacity of NCLT, making provisions for MSMEs.

EFFECTIVENESS OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016: A STUDY OF CREDITOR – DEBTOR BALANCE Read More »

THEORETICAL FRAMEWORK OF IBC

Volume IV Issue I /

THEORETICAL FRAMEWORK OF IBC Abdul Rahman K I, LL.M., 4th Semester, Student at Central University of Tamil Nadu (India) Aarcha P B, LL.M., 4th Semester, Student at Central University of Tamil Nadu (India) Download Manuscript doi.org/10.70183/lijdlr.2026.v04.137 The Insolvency and Bankruptcy Code, 2016 is not only a legal mechanism for resolving debt it is based on important economic and legal principles that explain the need for a structured insolvency system in a credit-based economy. Modern economies function largely on borrowed capital, businesses depend upon loans and investments to finance their operations, expand production and undertake new business initiatives. Therefore, credit plays an important role in the economic growth and development. However, the availability of credit also involves inherent risk of default and business failure, which cannot be completely avoided. In such a system, an effective insolvency framework is essential for dealing with financial distress in an orderly and structured manner. Without an organised legal framework, the failure of business may result in uncoordinated recovery actions by creditors, erosion of asset value, loss of employment and instability in the financial system. Insolvency laws aim to address these concerns by establishing a collective mechanism, through which the claims of the creditors can be resolved fairly and also providing an opportunity for viable businesses to be restructured and continue as a going concern. The Insolvency and Bankruptcy Code aim to balance these competing interests by ensuring timely resolution of financially distressed entities, maximisation of assets and ensuring fair treatment of stakeholders. The Code also recognises that insolvency is not only a legal issue but also an economic concern that requires a framework that promotes efficient allocation of resources and maintains confidence in the credit system. Through a structured and time bound manner the Code seeks to preserve the economic value, facilitate the recycling of capital from failing businesses to productive sectors, and support the overall stability of the financial markets.

THEORETICAL FRAMEWORK OF IBC Read More »

CROSS-BORDER INSOLVENCY UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 A FRAMEWORK IN PRACTICE OR A VACUUM IN DISGUISE? LESSONS FROM JET AIRWAYS

Volume IV Issue I /

CROSS-BORDER INSOLVENCY UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 A FRAMEWORK IN PRACTICE OR A VACUUM IN DISGUISE? LESSONS FROM JET AIRWAYS Anannya Deepak, B.A LLB (H), 10TH Semester, Student (India) Download Manuscript doi.org/10.70183/lijdlr.2026.v04.115 In an increasingly globalised economy, corporate entities operate across multiple jurisdictions, rendering traditional territorial approaches to insolvency inadequate. This paper critically examines the cross-border insolvency framework—or the lack thereof—under the Insolvency and Bankruptcy Code, 2016 (“Code” or “IBC”), with particular reference to Sections 234 and 235, which remain the sole statutory provisions addressing transnational insolvency coordination in India. Through a detailed analysis of Jet Airways (India) Ltd. v. State Bank of India, this paper demonstrates how Indian courts have attempted to bridge legislative gaps through judicial innovation, facilitating cross-border coordination in the absence of a comprehensive statutory mechanism. The case serves as both a proof of concept for informal cooperation and a cautionary illustration of the fragility inherent in ad hoc arrangements. The paper further situates India’s position within the broader international framework by examining the UNCITRAL Model Law on Cross-Border Insolvency, highlighting the divergence between India’s current approach and established global best practices. Drawing on comparative analysis, supporting jurisprudence, and the recommendations of the Insolvency Law Committee, it argues that India must transition from judicial improvisation to statutory certainty.

CROSS-BORDER INSOLVENCY UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 A FRAMEWORK IN PRACTICE OR A VACUUM IN DISGUISE? LESSONS FROM JET AIRWAYS Read More »

INTERPLAY BETWEEN RERA AND INSOLVENCY AND BANKRUPTCY CODE IN REAL ESTATE INSOLVENCY: ANALYSIS OF POST 2025 RESOLUTIONS OF STALLED HOUSING PROJECTS

Volume IV Issue I /

INTERPLAY BETWEEN RERA AND INSOLVENCY AND BANKRUPTCY CODE IN REAL ESTATE INSOLVENCY: ANALYSIS OF POST 2025 RESOLUTIONS OF STALLED HOUSING PROJECTS D Lokendra Reddy, 2nd semester LLM Corporate law (India) Download Manuscript doi.org/10.70183/lijdlr.2026.v04.97 Stagnated housing projects are also a major issue in the Indian real estate industry that has led to economic loss and long suffering of home buyers. Delays, absence of transparency, and absence of accountability among developers were some of the problems that were addressed by passing the Real Estate (Regulation and Development) Act, 2016 (RERA) an Act that is specific to the sector intended to safeguard the interests of the homebuyers. Simultaneously, a new law, Insolvency and Bankruptcy Code, 2016 (IBC) has been enacted to offer a time-limited approach that will address insolvency of corporate organizations, including real estate developers. The concomitant nature of the two laws has led to several legal and practical issues especially in situations where real estate developers have gone into bankruptcies and housing developments are still pending completion. This paper explores the relationship that exists between the RERA and the IBC when dealing with insolvency of a real estate project with reference to how stalled housing projects would be resolved in the post 2025 era. The research applies a doctrinal approach to examine statutory and judicial rulings to comprehend how courts and tribunals have tried to reconcile the goals of consumer protection under RERA with the goal of insolvency resolution under the IBC. The paper also measures the case of homebuyers as financial creditors and effects of insolvency moratorium on an action before the RERA bodies. The article concludes that the judicial trends of the years after 2025 indicate the increasing focus on the completion and revival of the projects and less on the liquidation of real estate developers. Nonetheless, common issues like overlapping jurisdiction and delays in the process, as well as the absence of explicit statutory coordination between RERA and IBC, remain to have an impact on the efficient resolution. The paper wraps up and recommends that legal directions should be made more explicit and that the coordination of institutions should be enhanced to make sure that unfinished housing projects can be completed in time and that the interests of the homebuyers are better safeguarded.

INTERPLAY BETWEEN RERA AND INSOLVENCY AND BANKRUPTCY CODE IN REAL ESTATE INSOLVENCY: ANALYSIS OF POST 2025 RESOLUTIONS OF STALLED HOUSING PROJECTS Read More »

THE CLEAN SLATE IN A CONTAMINATED ESTATE: RESOLVING THE STRUCTURAL CONFLICT BETWEEN SECTION 32A OF THE INSOLVENCY AND BANKRUPTCY CODE AND THE ENFORCEMENT DIRECTORATE’S ATTACHMENT POWERS UNDER THE PREVENTION OF MONEY LAUNDERING ACT

Volume IV Issue I /

THE CLEAN SLATE IN A CONTAMINATED ESTATE: RESOLVING THE STRUCTURAL CONFLICT BETWEEN SECTION 32A OF THE INSOLVENCY AND BANKRUPTCY CODE AND THE ENFORCEMENT DIRECTORATE’S ATTACHMENT POWERS UNDER THE PREVENTION OF MONEY LAUNDERING ACT Tahura Wasif, Student, 8th semester, B.A.LL.B (H) at Amity University Jharkhand (India) Kriti Kumari, Student, 8th semester, B.A.LL.B (H) at Amity University Jharkhand (India) Download Manuscript doi.org/10.70183/lijdlr.2026.v04.63 The insertion of Section 32A into the Insolvency and Bankruptcy Code (IBC) established the “Clean Slate” doctrine, aiming to immunize successfully resolved corporate debtors from prior criminal liabilities. However, this commercial imperative frequently collides with the Enforcement Directorate’s (ED) independent mandate to attach “proceeds of crime” under the Prevention of Money Laundering Act (PMLA). Despite the doctrine’s constitutional validation in Manish Kumar v. Union of India, recent flashpoints most notably the Kalyani Transco saga and Supreme Court observations in early 2026 demonstrate that judicial policy prioritizing resolution speed cannot permanently override a competing executive statutory framework. Furthermore, while the IBC (Amendment) Bill, 2025 rationalizes the waterfall priority of standard statutory dues, it leaves the PMLA threshold attachment problem completely unaddressed, resulting in continued bid suppression and structural value destruction. Drawing on comparative jurisprudence from U.S. Chapter 11 bankruptcy and the UK Insolvency Act, this paper proposes a targeted legislative intervention: the enactment of Section 32A(3). This proposed mechanism mandates pre-approval consultation and escrow safeguards, structurally harmonizing the state’s anti-money laundering enforcement with the IBC’s core objective of value maximization.

THE CLEAN SLATE IN A CONTAMINATED ESTATE: RESOLVING THE STRUCTURAL CONFLICT BETWEEN SECTION 32A OF THE INSOLVENCY AND BANKRUPTCY CODE AND THE ENFORCEMENT DIRECTORATE’S ATTACHMENT POWERS UNDER THE PREVENTION OF MONEY LAUNDERING ACT Read More »

HAIRCUT ECONOMICS: HOW THE IBC BECAME BACKDOOR BAILOUT TOOLS FOR NBFCS

Volume III Issue III /

HAIRCUT ECONOMICS: HOW THE IBC BECAME BACKDOOR BAILOUT TOOLS FOR NBFCS Devesh Jha, Author is a 4th year B.COM LLB (Hons.) student at Institute of Law, Nirma University (India) Priyanshi Jain, Author is a 4th year B.A. LLB (Hons.) student at Institute of Law, Nirma University (India). Download Manuscript doi.org/10.70183/lijdlr.2025.v03.91 The IBC was made to create creditor discipline and lead to value-maximizing resolutions within a time-bound period. But a new trend with discomfiting implications is emerging: non-banking financial companies (NBFCs) are now using the IBC not for recovering value, but for abandoning their own toxic lending exposures, however, at prices that are very low and with little accountability. NBFCs that have lent irresponsibly or without security have provoked CIRPs, have gotten rid of 80-90% bad assets, and have always gone on like this. The most worrisome is who pays for this, state-owned banks, public sector ARCs, and government-affiliated entities are frequent resolution applicants thus, they come to possess these assets through court-approved resolution plans. This article should suggest that the IBC is, unwittingly, a back door fiscal tool: where the costs of shoddy credit underwriting are socialized; where the NBFCs get to start afresh with no difficult questions asked regardless of how poor the quality of credit disbursement. Relying on case studies, regulatory analysis and comparative global architecture, the piece asks how this cycle of private risk and public loss is playing out and what reforms are required to forestall the IBC from allowing unregulated bailouts in camouflage.

HAIRCUT ECONOMICS: HOW THE IBC BECAME BACKDOOR BAILOUT TOOLS FOR NBFCS Read More »

CORPORATE DEBT RESTRUCTURING: LEGAL INTERSECTION OF COMPANY LAW AND IBC

Volume III Issue II /

CORPORATE DEBT RESTRUCTURING: LEGAL INTERSECTION OF COMPANY LAW AND IBC Karthikeyan D, Presidency University Bengaluru Download Manuscript doi.org/10.70183/lijdlr.2025.v03.76 Corporate Debt Restructuring (CDR) is a critical mechanism within India’s financial ecosystem, designed to facilitate the revival of financially distressed companies while safeguarding broader economic stability. This article examines the evolving legal framework governing CDR in India, focusing on the intersection of company law, banking regulation, and insolvency legislation. The Companies Act, 2013, provides the statutory foundation for corporate-level restructuring decisions through Sections 230 to 232, which enable schemes of compromise and arrangement to be made under judicial supervision. Simultaneously, the Reserve Bank of India (RBI) has issued prudential frameworks, including the erstwhile Corporate Debt Restructuring Mechanism and the recent Prudential Framework for Resolution of Stressed Assets, guiding financial institutions in managing non-performing assets. The introduction of the Insolvency and Bankruptcy Code (IBC), 2016 marked a transformative shift in India’s restructuring regime by introducing a time-bound, creditor-driven resolution process with legal enforceability. The IBC complements existing restructuring frameworks by serving as both a deterrent and a formal resolution mechanism. Provisions such as Section 230 schemes during liquidation and the Pre-Packaged Insolvency Resolution Process (Pre-Pack IBC) reflect the integration of insolvency laws. Beyond statutory regimes, this article addresses contractual and security law dimensions, including loan renegotiations, covenant modifications, and enforcement of security interests under the SARFAESI Act, 2002. The analysis highlights judicial evolution through landmark rulings such as Essar Steel, Jet Airways, and Swiss Ribbons, which reinforce creditor rights and ensure procedural integrity. Despite progress, challenges persist, including regulatory overlaps, procedural delays, and inter-creditor conflicts. Recent developments such as RBI’s emphasis on out-of-court restructuring and India’s move toward cross-border insolvency norms signal a forward-looking approach. This article concludes that a harmonized framework combining company law, banking regulation, and insolvency law is essential for improving efficiency, enhancing creditor confidence, and strengthening India’s corporate resilience.

CORPORATE DEBT RESTRUCTURING: LEGAL INTERSECTION OF COMPANY LAW AND IBC Read More »

BRIDGING LAW AND FINANCE: THE ROLE OF LEGAL INSTITUTIONS IN FINANCIAL RECOVERY MECHANISMS

Volume III Issue I /

BRIDGING LAW AND FINANCE: THE ROLE OF LEGAL INSTITUTIONS IN FINANCIAL RECOVERY MECHANISMS Shaily Gupta, 10th Semester, B.A.LL.B Student at Amity Law School, Amity University, Uttar Pradesh Dr. Jyotsana Singh, Assistant Professor at Amity Law School, Amity University, Uttar Pradesh Download Manuscript doi.org/10.70183/lijdlr.2024.v03.28 This paper examines the critical intersection of legal institutions and financial recovery mechanisms in India’s evolving economic landscape. It analyzes how the Insolvency and Bankruptcy Code (IBC) of 2016 transformed creditor-debtor dynamics by creating a unified framework for resolution, while highlighting persistent challenges in implementation including judicial delays and institutional bottlenecks. The research explores the complementary roles of SARFAESI Act, Debt Recovery Tribunals, and regulatory frameworks established by the RBI and SEBI in facilitating debt recovery and financial stability. Through analysis of landmark judicial decisions, the paper reveals how courts have maintained a delicate balance between creditor rights and constitutional protections for debtors. Comparative examination of international insolvency regimes provides insights for potential reforms, particularly regarding cross-border insolvency and sector-specific frameworks. The study concludes that while significant legal advancements have occurred, India must address institutional capacity constraints, adopt the UNCITRAL Model Law on Cross-Border Insolvency, and develop pre-insolvency mechanisms to enhance recovery outcomes and systemic stability. Type Information Research Paper LawFoyer International Journal of Doctrinal Legal Research, Volume III, Issue I, Page 682-714. Creative Commons Copyright This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. © Authors, 2024

BRIDGING LAW AND FINANCE: THE ROLE OF LEGAL INSTITUTIONS IN FINANCIAL RECOVERY MECHANISMS Read More »