By Abizer Diwanji

The proposed amendments to the Insolvency and Bankruptcy Code (IBC) are welcome as they deal with delays in resolution by National Company Law Tribunal (NCLT), government agencies, and promoters. The changes also plan to augment implementation and improve the creditors’ voices in the liquidation process. All of these are welcome as the IBC’s track record glaringly tells that we need change.

Without doubt, IBC is one of the best legislations in India’s recent history. The law was drafted maturely to cover every aspect, but the rules in certain instances went contrary. The behaviour of its various pillars, the courts, creditors, resolution professionals, and corporate debtors also leaves a lot to be desired. The regulator, which paid attention to only one of the pillars, was left with no choice but to be hard on the regulated and was unable to regulate the other pillars, all of which together drive the success of this legislation. A glance at some statistic confirms this.

IBC has admitted a total of around 8,150 companies, of which 2,000-odd are pending, 2,700 were liquidated, 1,100 had successful resolution plans, 1,250 were appealed and settled, and 1,100 were withdrawn under Section 12A. On performance, whilst most measure recoveries as a percentage of claims, one needs to measure IBC performance on recoveries as a percentage of liquidation value (as rules do not allow anyone to resurrect a company during a Corporate Insolvency Resolution Process (CIRP), though the law imbibes that. As a percentage of liquidation value, CIRPs recovered 163% and liquidation recovered 89% of value. This........

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