The Insolvency and Bankruptcy Code, 2016 (“IBC”) was conceived as a time-bound mechanism for resolving financial distress. Nearly a decade into its implementation, the Code stands at an inflection point—its foundational objectives remain intact, but its execution reveals structural strain.
- The Promise of Time-Bound Resolution
The IBC introduced strict timelines for the Corporate Insolvency Resolution Process (CIRP), envisaging completion within 180–330 days. This was a radical departure from the protracted regimes that preceded it.
However, empirical reality tells a different story. Delays—arising from litigation, capacity constraints, and procedural complexities—have become endemic.
- Expanding Jurisprudence
Judicial interpretation has significantly expanded the scope of the IBC. Issues relating to homebuyers, operational creditors, and personal guarantors have transformed the Code into a dynamic and evolving framework.
While this judicial creativity has enhanced inclusivity, it has also introduced uncertainty.
III. The Role of Adjudicatory Bodies
The effectiveness of the IBC is closely tied to the functioning of adjudicatory bodies such as the National Company Law Tribunal (NCLT). Capacity constraints and case backlogs have impacted timelines, undermining the Code’s core objective.
- Strategic Use versus Misuse
The IBC has, at times, been deployed as a recovery tool rather than a resolution mechanism. This strategic invocation, while legally permissible, risks distorting the legislative intent.
- The Way Forward
Reform must focus on institutional strengthening, clarity in jurisprudence, and adherence to timelines. Without these, the IBC risks losing its credibility as an efficient insolvency regime.