Study of Insolvency and Bankruptcy Code 2016, its objectives and benefits

Abstract

Insolvency and Bankruptcy Code 2016 is a law that was implemented through an act of Parliament. IBC got Presidential assent in May 2016 and was put into effect after that. Certain provisions of the act were imposed in August in the same year.
In India, the legal and institutional machinery for dealing with debt default has not been in line with global standards. The recovery action by creditors, either through the Contract Act or through special laws such as the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, has not had desired outcomes. Similarly, action through the Sick Industrial Companies (Special Provisions) Act, 1985 and the winding up provisions of the Companies Act, 1956 have neither been able to aid recovery for lenders nor aid restructuring of firms. Laws dealing with individual insolvency, the Presidential Towns insolvency Act, 1909 and the Provincial Insolvency Act. 1920, are almost a century old.