Introduction
The Insolvency and Bankruptcy Code, 2016 (IBC), is an Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons and partnership firms. The primary objective of the Code is to ensure timely resolution, preserve enterprise value, promote the availability of credit, and balance the interests of all stakeholders.
Under the IBC, creditors can initiate insolvency proceedings before the National Company Law Tribunal (NCLT) if a company defaults on any outstanding dues owed to creditors. Conversely, if any company suffers financial distress and is unable to repay its dues, the company itself can initiate insolvency proceedings before the NCLT. The IBC mainly…