A law does not become unjust merely because it permits a large loss. Bankruptcy exists precisely because the whole debt cannot be recovered. Nor does an asset become a gift merely because its buyer pays substantially less than the failed company once owed. Debt is not value; an admitted claim is not a market price; and a haircut is not, by itself, evidence of corruption.
These distinctions matter. Without them, criticism of India’s insolvency regime becomes easy to refute.
But once every exaggeration has been removed, the facts that remain are troubling enough.
The immediate provocation is the personal-insolvency proceeding involving Subhash Chandra, founder of the Essel and Zee groups. The National Company Law Tribunal has…