The processes of Insolvency and liquidation got complicated due to the involvement of numerous Acts like Sick Industrial Companies Act, SARFAESI Act, Companies Act, Recovery of Debt due to Banks and Financial Institutions Act, Companies Act etc.
The Insolvency and Bankruptcy Code, 2016 (“IBC”) created revolution in the existing legal sphere. IBC has a huge impact on Indian economy (even in international scenario) as it is intertwined with other Acts and Rules like Competition Act, 2002, Competition Commission of India (Procedure in regard to the transaction of Business relating to Combinations) Regulations, 2011 etc.
Insolvency is the state in which either a person or a company whose liabilities has exceeded its asset value and is not able to pay off its debt to the creditor. Legally it can be solved through the process of bankruptcy.
Insolvency and Bankruptcy Code – Settlement of Debts by Promoters After Liquidation Proceedings are...
The Insolvency and Bankruptcy Code is a body of law which is in its evolutionary stage. Every amendment and precedent set by the various tribunals moulds the Code to better accommodate the issues particular to the market in the nation. Many of the provisions in this Code have been up for debate, and most recently, Section 29A has joined the category.
In 2016, the Houses of Parliament passed the Insolvency and Bankruptcy Bill which changed the face of Insolvency Resolution Process for Corporates. This Act has resulted in the repeal of the Sick Industrial Companies Act and has put in place measures that make sure a quick and efficient resolution process to repay all the debts owed by a corporate debtor.
Cross-border insolvency is one where the insolvent debtor has assets in more than one State or where some creditors of the debtor are not from the State where the insolvency proceeding is taking place.
The Insolvency and Bankruptcy Code 2016 (hereafter referred as the Code) received the president’s assent on May 28.05.2016. The objective of the Act is to “to consolidate and amend laws relating to reorganization and insolvency of corporate persons, partnership firms and individuals in a time bound manner”. The Act also intends to promote availability of credit.