Corporate Insolvency Resolution under the Insolvency and Bankruptcy Code, 2016: Evolving Jurisprudence.
This article is written by Lakshitha Amballa, pursuing B.Com. LL.B (Hons), from Jindal Global Law School, O.P Jindal Global University, Sonipat.
The Insolvency and Bankruptcy Code, 2016 (“IBC”) marked a significant turning point in India’s insolvency framework. Before its enactment, insolvency resolution in India was fragmented across multiple statutes such as the Sick Industrial Companies Act, the Companies Act, and the Recovery of Debts Due to Banks and Financial Institutions Act.
The process was often slow, inefficient, and heavily litigation-driven, resulting in erosion of asset value and poor recovery for creditors. The IBC sought to change this by introducing a unified, time-bound mechanism for corporate insolvency resolution with an emphasis on revival rather than mere recovery. Since 2016, the Supreme Court, National Company Law Tribunal (“NCLT”), and National Company Law Appellate Tribunal (“NCLAT”) have developed an extensive jurisprudence interpreting the Code. Through landmark decisions such as Innoventive Industries v. ICICI Bank, Swiss Ribbons v. Union of India, Essar Steel, and Ebix Singapore, courts have clarified the objectives of the Code, strengthened the role of the Committee of Creditors (“CoC”), and reinforced the principle of commercial wisdom. At the same time, recurring delays, excessive litigation, and concerns regarding operational creditors and homebuyers reveal continuing tensions within the insolvency process.
This paper examines the evolving jurisprudence surrounding Corporate Insolvency Resolution Process (“CIRP”) under the IBC, analyses major judicial trends, and evaluates whether the Code has succeeded in balancing creditor interests with the broader objective of corporate rescue.
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