CORPORATE RESTRUCTURING AND INSOLVENCY: CRITICAL ANALYSIS OF LAWS IN INDIA

Abstract

In India, numerous overlapping legislations come into play while conducting the insolvency resolution proceedings. The procedure laid down in each of the statutes for realisation of assets, seizure and fulfilling the debt obligations vary from one another. As a result, the overlapping statutes cause unnecessary confusion during the insolvency and liquidation proceedings. This problem necessitated the formulation of a consolidated insolvency regulatory framework. Additionally, an insolvency regime in a country is required to be strong for the reason that when companies fail to restructure in order to rehabilitate themselves, the outcome often results in liquidation of such companies. Therefore, the purpose of the study is to provide an overview of the concepts of corporate restructuring, revival of sick companies, insolvency and bankruptcy from an Indian legal perspective. The scope of the study encompasses the existing legislative measures and practices regarding the areas in India by conducting an examination of the provisions of Insolvency and Bankruptcy Code, 2016, Companies Act, 2013, SARFAESI Act, 2002 and SICA, 1985 in consonance with relevant judicial pronouncements. Additionally, the focus of the study is to analyse and explore the effectiveness of these legislations, the issues and gaps in the current legislative framework will be identified along with a study on the impact of the insolvency laws on the Indian economy to provide a critique on the lacuna in the Indian insolvency laws. After identifying the issues in the existing legislative framework, the study aims to derive suitable suggestions regarding necessary reforms required in laws relating to corporate restructuring and Insolvency to mitigate the issues at hand.