Roadblocks Under Insolvency and Bankruptcy Code, 2016 – Need for Capacity Building

Abstract

The Insolvency and Bankruptcy Code was framed with an intention to streamline and ease the process of corporate insolvency aiming for a time bound insolvency resolution thereby preventing the erosion of the enterprise value of the Corporate Debtor in distress and promote ease of doing business in the country. But when one critically examines the progress that the IBC regime made during the past three years it can be seen that the system has failed to meet the expectation of the financial market and the resolution process is exhibiting signs of sluggishness, which was the malady of the previous regime IBC intended to resolve. It is pertinent to note that the provisions of the Code related to the Insolvency Resolution and Bankruptcy of the Individuals and the Partnership firms is yet to be made operational. There are several inherent factors in the existing system which will have to be rectified as an ongoing process. This paper examines the underlying inherent challenges within the system which is impeding the intended progress envisaged under the Code.