IBC Ambiguity Under Scrutiny
The Insolvency and Bankruptcy Code (IBC) has been under scrutiny following a recent parliamentary committee meeting. The committee brought into light ambiguities within the IBC and discussed potential amendments. This comes after a Supreme Court ruling that quashed JSW Steel’s resolution plan for Bhushan Power and Steel Ltd (BPSL), raising questions about the effectiveness of the current insolvency framework.
What is the Insolvency and Bankruptcy Code?
The IBC was enacted in 2016. It provides a structured process for resolving insolvency and bankruptcy for individuals, firms, and corporations. The primary aim is to facilitate timely recovery for creditors and revitalize businesses in financial distress. The IBC seeks to enhance the efficiency of the economy by streamlining insolvency procedures.
Parliamentary Committee Findings
The Standing Committee on Finance convened to review the IBC. Members raised concerns about delays in the resolution process. They noted that previous committees had identified gaps in the law. Recommendations from these committees have led to some initial amendments, but further changes may be necessary.
Supreme Court Involvement
The Supreme Court recently intervened in the case of JSW Steel and BPSL. The court put a hold on BPSL’s liquidation after JSW Steel argued that liquidation would adversely impact the company, its employees, and lenders. This ruling has sparked discussions about the efficiency of the insolvency mechanism.
Dynamic Nature of Laws
Legal frameworks like the IBC must evolve to remain effective. As financial landscapes change, laws require updates to address emerging issues. The IBC, while beneficial since its inception, needs continuous evaluation to ensure it meets the needs of all stakeholders involved.
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Ramesh Nair
June 1, 2025 at 3:50 pmThis is a foolish idea copied from the west.In a country where corruption is dominant IBC is only a tool to harrass the rightful.Even most of the case the judges are totally from unknown digneteries with no knowledge of law.