Although the primary aim of the Insolvency and Bankruptcy Code, 2016 (IBC), is to revive financially distressed entities and ensure their continued operation, its practical application often diverges from this goal. Creditors frequently leverage IBC proceedings to secure favourable settlements and maximise debt recovery, bypassing the conventional judicial process. Faced with the prospect of insolvency, corporate debtors often opt for settlement over the uncertainty of outcomes under the IBC.
Partner
Bharucha & Partners
Recently, the Supreme Court in M/s HPCL-Biofuels Ltd v M/s Shahaji Bhanudas Bhad reiterated that the IBC was not debt recovery legislation and called on creditors to curb this practice of debt…
