The Corporate Insolvency Resolution Process under Indian Insolvency Resolution Process under Insolvency and Bankruptcy Code, 2016.

Abstract

India’s ranking by the world bank in terms of “Ease of Doing Business (EDO) was at 130^th position amongst 189 countries and is a cause of concern for the Indian fast growing economy and to overcome the said situation “The Bankruptcy Law Reform Committee” was formed to harmonize and establish a process in accordance with UNCITRAL (United Nation Commission on International Trade Law) to like that of the Insolvency models of developed countries like United States and United Kingdom.  The Insolvency and Bankruptcy Code, 2016 (the Code) is projected as a game changer, which will facilitate easy exit of the corporates and Individuals from the unviable business.  The Code introduced creditor -in- control model replacing the Debtor-in-Possession regime and therefore in the corporate insolvency resolution process, Creditors are given control on the process in terms of “Committee of Creditor”. The  entire process under IBC, 2016 right from, running the Corporate Insolvency Resolution, Liquidation and Bankruptcy proceeding, the mechanism including approval of resolution plant and liquidation or withdrawal of Corporate Insolvency Resolution Process ( CIRP) under section 12(A) is a creditor driven process  and the  provision of  Creditors-in- Control is actually  reflects  in the commercial wisdom of the Committee of Creditor. The Hon’ble Supreme Court of India undisputedly awarded and upheld the Commercial wisdom of the Committee of Creditor (COC) and factually confirmed the will of legislature to put a “Creditor- in – Control”.  This absolute autonomy gives the CoC immense power. However, with absolute power comes absolute responsibility to drive the process efficiently and is a key for successful implementation of Insolvency and Bankruptcy Code, 2016 in India.