The Ministry of Corporate Affairs (MCA) will examine litigation funding for PUFE – Preferential, Undervalued, Fraudulent, and Extortionate transactions under the insolvency regime to improve recoveries, the ministry told a parliamentary standing committee in a written reply.
“Litigation funding for PUFE transactions will be examined in light of global best practices and refined through detailed consultation with all relevant stakeholders,” the MCA said.
The ministry, in its comments, highlighted that the market for litigation funding is still nascent in India.
Funds worth over Rs 4.38 lakh crore across 1,878 applications were locked in avoidance proceedings as of March 31, 2026, according to Insolvency and…