Insolvency and Bankruptcy Code, 2016 – Sections List & Bare Act
The Insolvency and Bankruptcy Code, 2016 (IBC) is the principal legislation governing insolvency and bankruptcy proceedings in India. It provides a time-bound framework for resolving insolvency of companies, corporate persons, partnership firms and individuals, while seeking to maximise the value of their assets and balance the interests of stakeholders.
The Code is particularly important for law students, insolvency professionals, advocates, judicial service aspirants and candidates preparing for corporate law examinations.
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Insolvency and Bankruptcy Code, 2016
The Insolvency and Bankruptcy Code, 2016 was enacted to consolidate and amend the laws relating to insolvency and bankruptcy in India. It establishes a structured process for dealing with financial distress and provides mechanisms for resolution and liquidation.
The Insolvency and Bankruptcy Board of India (IBBI) is the regulatory authority established under the Code. Insolvency professionals, insolvency professional agencies and information utilities operate within the framework created by the IBC.
IBC Sections
The IBC contains provisions dealing with the insolvency resolution and liquidation of corporate persons, as well as insolvency and bankruptcy processes relating to individuals and partnership firms.
The Code covers important areas such as corporate insolvency resolution process (CIRP), liquidation, voluntary liquidation, insolvency resolution of individuals and firms, bankruptcy, offences and penalties, and the institutional framework for insolvency proceedings.
Students studying the IBC should pay particular attention to important provisions relating to the initiation of CIRP, admission of applications, moratorium, appointment and powers of the resolution professional, committee of creditors, resolution plans, liquidation and distribution of assets.
Corporate Insolvency Resolution Process (CIRP)
The Corporate Insolvency Resolution Process is one of the most important parts of the IBC. It provides a framework for resolving the insolvency of a corporate debtor within the prescribed statutory process.
The process involves the admission of an insolvency application, declaration of a moratorium, appointment of an interim resolution professional, constitution of the committee of creditors and consideration of resolution plans.
Where resolution is not achieved in accordance with the Code, the corporate debtor may proceed towards liquidation.
Liquidation under the IBC
The IBC also establishes a framework for liquidation of corporate debtors. Liquidation involves collecting and realising the assets of the corporate debtor and distributing the proceeds among stakeholders according to the statutory framework.
The waterfall mechanism under Section 53 is particularly important because it establishes the order in which liquidation proceeds are distributed among different classes of stakeholders.
Insolvency Resolution of Individuals and Firms
The Code also contains provisions dealing with insolvency resolution and bankruptcy of individuals and partnership firms. These provisions provide mechanisms for dealing with the debts and financial obligations of individuals and firms within the framework of the Code.
For legal research, examinations and professional work, readers should refer to the latest amended version of the Code, as insolvency law is frequently amended and the applicable provisions may change over time.
