RULES OF LAW

Insolvency and bankruptcy Code, 2016 is to ensure revival and continuation of the Corporate Debtor, where liquidation would be the last resort and scheme and structure of the code should be interpreted keeping in view the objectives of the code. Supreme Court of India in the matter of Jaypee Kensington Boulevard Apartments Welfare Association & ORS. VS NBCC (India) Ltd. & ors. observed the same. The code is a linear process that both creditors and debtors follow when insolvency is triggered; a collective mechanism for resolving insolvency within a framework of equity and fairness to all stakeholders to preserve economic value in the process; a time bound process either ends in keeping the firm as a going enterprise, or liquidates and distributes the assets to the various stakeholders. The Preamble of Insolvency and Bankruptcy Code. 2016 gives an insight into what is sought to be achieved by the Code. Preamble states the code as: “An Act to consolidate and amend the laws r...

The Insolvency and Bankruptcy Code, 2016 is single unified  umbrella of insolvency law which consolidates and amends the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy board of India, and for matters connected therewith or incidental thereto. Before the Insolvency and Bankruptcy Code, 2016 there was no single law in India that dealt with insolvency and bankruptcy. Provisions relating to insolvency and bankruptcy for companies could be found in the in the Sick Industrial Companies (Special Provisions) Act, 1985, the Recovery of Debt Due to Banks and Financial Institutions Act, 1993, the Securitisation and Reconstruct...