The Ministry of Corporate Affairs (MCA) will examine litigation funding for preferential, undervalued, fraudulent, and extortionate (PUFE) 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 remains nascent in India.
Funds worth over ₹4.38 trillion across 1,878 applications are locked in avoidance proceedings until March 31, 2026, according to Insolvency and Bankruptcy Board of…