The law must clearly lay out the priority of distributions in bankruptcy to all stakeholders. The priority must be designed so as to incentivise all stakeholders to participate in the cycle of building enterprises with confidence.1
Introduction
In light of recent judicial decisions, namely, State Tax Officer v. Rainbow Papers Ltd.2 (Rainbow Papers case) and Paschimanchal Vidyut Vitran Nigam Ltd. v. Raman Ispat (P) Ltd.3 (PVVNL case), Government of India is looking to make changes to the Insolvency and Bankruptcy Code. According to a report dated 14-4-20254, the Centre intends to change the corporate insolvency framework to give better clarity, particularly on how to handle statutory dues and claim priorities, that has been altered…