The Code does not currently make much sense for operational creditors

The government has brought in this Code, largely modelled on the U.S. Bankruptcy Law, with the good intention of facilitating timely resolution of corporate bankruptcy. However, a critical reading of the legislation reveals that unless necessary changes are made to it, the legislative intent would largely remain unfulfilled.

Under the Code, where a corporate debtor fails to pay a debt that is due, the corporate insolvency resolution process may be initiated by a financial creditor or by an operational creditor or by the corporate debtor itself. A financial creditor is a creditor to whom a financial debt is owed by the corporate debtor. An operational creditor …

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