International Journal of Law
International Journal of Law
International Journal of Law
Vol. 8, Issue 6 (2022)

Insolvency & bankruptcycode, 2016: A paradigm shift with insolvency laws in India


Jasreena K Saluja, Dr. Divya Khurana

An effective economy plays a catalytic role in activating and sustaining growth, especially, in developing countries and India is no exception. One of the biggest insolvency reforms in the economic history of India is continuously been evolving and has undergone a paradigm shift. Approximately hundreds of cases have been witnessed under Insolvency and Bankruptcy Code, 2016 and some are still being battled. Insolvency and Bankruptcy code has invited a lot of discussions and many questions are being raised on how effective is the Code in mitigating the damage done by companies going bankrupt either due to poor corporate governance or misappropriation of funds by promoters or businesses succumbing to the unsustainable policy environment. Insolvency and Bankruptcy Code, 2016 has aimed at bringing a paradigm shift within insolvency and bankruptcy laws. This was enacted for reorganisation and insolvency resolution of corporate persons, partnership firms and individuals. The focus of the Act was to maximum the value of assets, promoting entrepreneurship, creating mechanism for settling credit-related disputes, reducing creditor distrust and ensuring continuance of functioning of companies rather than being wound up for non-payment of debts by balancing the interests of the various shareholders. Especially the corporate sector had to face financial challenges due to wrath of the Covid-19 pandemic. Since the code is in the fledgling stage of implementation, judicial pronouncements play a vital role in clarifying the intent of the legislature regarding the code and the manner it has to be interpreted. If the accomplishment of the fledging Code has to be determined clearly, it depends on the kind of paradigm shift Insolvency and Bankruptcy code has brought in the debtor-creditor relationship which should be considered as a benchmark.
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How to cite this article:
Jasreena K Saluja, Dr. Divya Khurana. Insolvency & bankruptcycode, 2016: A paradigm shift with insolvency laws in India. International Journal of Law, Volume 8, Issue 6, 2022, Pages 53-56
International Journal of Law