The government introduced a bill in this monsoon session to amend the Insolvency and Bankruptcy Code. This is the first amendment proposal since 2021. The working of the IBC has faced criticism due to delays and judicial pronouncements that were not predictable. While the non-performing loan cycle is down, the confidence in using the IBC to resolve stressed companies is at an all-time low. Therefore, it is an opportune moment to solve some critical hindrances to the effectiveness of the IBC.
The bill proposes wide-ranging amendments, among others, to the admission process, financial creditor rights in insolvency including against statutory dues and inter-se, towards streamlining corporate insolvency processes, and augmenting avoidance…