CRITICAL ANALYSIS OF INSOLVENCY AND BANKRUPTCY CODE 2016

AUTHOR – MR. PRATHAM SINHA* & MS. SONAKSHI VARSHNEY**

* STUDENT AT AMITY UNIVERSITY

** ASSISTANT PROFESSOR AT AMITY UNIVERSITY

BEST CITATION – MR. PRATHAM SINHA & MS. SONAKSHI VARSHNEY, CRITICAL ANALYSIS OF INSOLVENCY AND BANKRUPTCY CODE 2016, ILE MULTIDISCIPLINARY JOURNAL, 4 (1) OF 2025, PG. 835-844, APIS – 3920-0007 | ISSN – 2583-7230.

Abstract

The enactment of the Insolvency and Bankruptcy Code, 2016 (IBC) was a root-and-branch overhaul of Indian law relating to insolvency, and with the goal of consolidating and streamlining pre-existing piecemeal and inefficient legal structures. Prior to IBC, bankruptcy and insolvency were governed by different legislations such as the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), Companies Act, and SARFAESI Act, 2002. All the legislations were prone to delay in proceedings, overlapping jurisdictions, and poor recovery rates for creditors. The IBC brought one, creditor-in-control, time-bound model of resolution of insolvency and business survival and thus significantly enhanced investor confidence and business facilitation in India.

The following research paper is critically examining the genesis, creation, and impact of the IBC when compared to the earlier insolvency legislations, delineating its paradigmatic impact on the financial ecosystem of India. It also touches upon ground-breaking orders such as Swiss Ribbons v. Union of India, Essar Steel v. Satish Kumar Gupta, and Jaypee Infratech v. IDBI Bank which have played a crucial role in interpreting and molding the law. The study diagnoses problems such as delay in disposal, judicial jam, and creditor haircuts that are still widespread and suggests policy interventions to enhance the efficiency and working efficacy of the Code.

Keywords – Insolvency and Bankruptcy Code, IBC 2016, Corporate Insolvency, SICA, SARFAESI Act, NCLT, Financial Creditors, Resolution Process, Landmark Judgments, Debt Recovery, Legal Reforms, Corporate Restructuring.