INSOLVENCY AND BANKRUPTCY LAWS UNIT I
The landscape of insolvency and bankruptcy laws has undergone significant transformation over the years, particularly with the introduction of dedicated legislation like the Insolvency and Bankruptcy Code (IBC) in India. With an aim to streamline the insolvency resolution process and provide a conducive environment for businesses to thrive, the IBC has reshaped the way insolvency cases are handled.

The landscape of insolvency and bankruptcy laws has undergone significant transformation over the years, particularly with the introduction of dedicated legislation like the Insolvency and Bankruptcy Code (IBC) in India. With an aim to streamline the insolvency resolution process and provide a conducive environment for businesses to thrive, the IBC has reshaped the way insolvency cases are handled.
The following sections will delve into the historical context, objectives, purpose of the IBC, and a comparative analysis of the insolvency processes under the Companies Act 2013 and the IBC of 2018.
Brief History of the Insolvency and Bankruptcy Code
The journey of insolvency and bankruptcy laws in India has been a complex one. Prior to the introduction of the Insolvency and Bankruptcy Code in 2016, the country relied on a fragmented legal framework comprising various laws such as the Companies Act 2013 and the Recovery of Debts due to Banks and Financial Institutions Act, 1993.
While these laws had their strengths, they also exhibited several shortcomings, including protracted timelines, lack of clarity in procedures, and an emphasis on creditor rights over resolution. The need for a more streamlined, efficient, and transparent framework was increasingly felt amid India's burgeoning economic landscape.
The Insolvency and Bankruptcy Code was enacted in 2016 as a response to these shortcomings. This comprehensive piece of legislation aimed to consolidate and amend the existing insolvency laws in India, with a focus on facilitating the resolution of insolvency in a time-bound manner.
With the ability to address both corporate and personal insolvencies, the IBC has effectively replaced several outdated laws. It has also laid down a robust framework for stakeholders, including creditors, corporate debtors, and other interested parties, establishing a clear procedure that emphasizes both resolution and maximization of asset value.