NATIONAL LAW INSTITUTE UNIVERSITY,

BHOPAL

INSOLVENCY & BANKRUPTCY LAW

(2018-19)

RESOLUTION VERSUS RECOVERY UNDER

INSOLVENCY AND BANKRUPTCY LAW

SUBMITTED TO: SUBMITTED BY:

ASST. PROF. AMIT PRATAP SINGH MONIKA PRAKASH

LLM 2018 05
 Table of Contents
I. Introduction ............................................................................................................................. 4

Literature Review........................................................................................................................ 7

Statement of Problem .................................................................................................................. 8

Hypothesis................................................................................................................................... 8

Research Objective ..................................................................................................................... 8

Research Questions ..................................................................................................................... 8

II. Conceptual Analysis ............................................................................................................... 9

2.1 Insolvency ............................................................................................................................. 9

2.2 Bankruptcy ............................................................................................................................ 9

2.3 Resolution ............................................................................................................................. 9

2.4 Recovery ............................................................................................................................. 10

2.5 Liquidation .......................................................................................................................... 11

2.6 Survivor Function ............................................................................................................... 12

2.7 Financial Failure/ Financial Distress .................................................................................. 12

2.9 Business failure/ Economic Distress ................................................................................... 12

III. Relevant Legislative Framework under IBC ..................................................................... 13

IV. Problem of abundance of Liquidations under IBC ............................................................ 16

Underlying Reasons for Large Number of Liquidation: An Analysis ...................................... 17

Overemphasizing Resolution? .................................................................................................. 22

V. Conclusion & Suggestions .................................................................................................... 26

VI. Bibliography ...................................................................................................................... 28

Statutes .................................................................................................................................. 28

Journal Articles/ Newspaper Articles/ Working Papers ....................................................... 29

Reports .................................................................................................................................. 30

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Websites ................................................................................................................................ 30

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 I. INTRODUCTION
Since Insolvency and Bankruptcy Code’s enforcement in 2016, it has been empirically observed
that the threat of invoking IBC itself is strong enough to prevent defaults and preserve debt contract
sanctity. Debtors are now trying to find creative ways to pay back timely or perhaps even earlier
to try and avoid defaults. Alternatives such as auctioning non-core assets, divesting in group
companies, releasing investments, selling idle properties and even capping diversification plans
and focusing on business consolidation etc. are now being weighed in by them. Thus, honouring
loan commitments is gradually becoming a priority for borrowers. But this pro-active approach is
not enough to deal with the debt problems that the economy is facing now. The provisions under
IBC though playing an effective role as a pressure mechanism for recovery is not sufficient to deal
with the magnitude of problem of bad loans at hand.

Considering the preamble of the Code1, the principal objective of the code is to resolve a troubled
entity. Objectives of IBC are as follows- resolution, maximization of value of assets of the
corporate debtor or set of stakeholders such as creditors and promoting entrepreneurship while
ensuring availability of credit and in the process—are time-bound and sacrosanct.

As per the Banking Law Reforms Committee, the Code set out the following objectives to resolve
insolvency and bankruptcy:

1. Low time to resolution

2. Higher recovery

3. Higher levels of debt financing across a wide variety of debt instruments.

As per experts, ‘Resolution’ is the primary focus of the Act. To take it a step further, it has been
described as the soul of the Act too. In light of various judicial pronouncements and the statutory
provisions, it is clear that liquidation is meant for last resort only. There are several provisions in
the law which encourage Resolution instead of Recovery/Liquidation. To mention a few, the code

1
Preamble, The Insolvency and Bankruptcy Code, 2016- “An Act to consolidate and amend the laws relating to
reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound
manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and
balance the interests of all the stakeholders including alteration in the order of priority of payment of Government
dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental
thereto.”

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prohibits any action to foreclose, recover, or enforce any security interest during resolution process
and thereby prevents creditors from recovering its dues, code does not envisage termination of
process even if dues of the creditor who had initiated the process are satisfied, regulations allow
payment of only liquidation value, not the default amount or proportionate share in enterprise
value, to FCs who vote against the approved plan. In addition, the code enables IP to raise interim
finances for the corporation's continued business operations and stipulates the continuation of
essential services and helps ensure a smooth period when the company is undergoing resolved.

M.S Sahoo, Chairman of Insolvency and the Bankruptcy Board of India discussing the nature of
the Insolvency and the Bankruptcy code, 2016, in one of his interviews said, “Focus shall be
resolution, not liquidation.”

In Prowess International Pvt. Ltd v. Parker Hannifin India Pvt. Ltd.2, NCLAT stated that the
insolvency resolution process is not a recovery proceeding to recover the dues of the Creditor.
Therefore, the main aim is ‘maximization of value of assets’ and ‘balancing the interests’,
resolution triumphs over recovery as well as liquidation in most cases.

Hon'ble Supreme Court of India in Arcelor Mittal India Pvt. Ltd. v. Satish Kumar Gupta and
Ors.3 held that every effort must be made to try and see that the corporate debtor continues to run
as a going concern.

In Sashidhar, Managing Director v. Kamineni Steel and Power India & Anr.4, Hyderabad bench
of the National Company Law Tribunal (NCLT) giving a liberal interpretation to Section 31, IBC,
2016, cleared a resolution plan approved by 66.67% of the Committee of Creditors instead of the
statutory requirement of ‘no less than 75%’. Considering this decision and to encourage resolutions
to take place, the voting threshold under the IBC has also been lowered from 75 per cent to 66 per
cent, by way of amendment.

It is essential to understand that resolution is the best bet for the economy as well as for the creditors
in India. There are several problems associated with the liquidation process under IBC, which
perhaps have not been sufficiently paid heed to until recently. The liquidator has to file an

2
Prowess International Pvt. Ltd v. Parker Hannifin India Pvt. Ltd., Company Appeal (AT) (Insol.) No. 89/2017
3
Arcelor Mittal India Pvt. Ltd. v. Satish Kumar Gupta and Ors., Civil Appeal Nos. .9402-9405 OF 2018,
MANU/SC/1123/2018
4
Sashidhar, Managing Director v. Kamineni Steel and Power India & Anr., CP. (IB) No. 11/10/HBD/2017

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application in the National Company Law Tribunal (NCLT) to get the necessary direction to the
agencies to release the assets so that the liquidator can carry on with liquidation since, until the
asset is not ‘clean’, buyers will not come forward. Almost two years since IBC came into force,
the first firms that faced liquidation such as UB Engineering and Innoventive Industries have not
been dissolved. The challenges of a liquidator, include wading through complicated land
ownership patterns of the corporate debtor. recovery of dues by the liquidator from receivables,
especially in cases where the parties are litigating, makes it difficult to even realize those assets. It
is argued that the law on liquidation is at a nascent stage, procedures need to be smoothened
further.

According to the latest newsletter from the Insolvency and Bankruptcy Board of India, 1,484
corporate debtors have been admitted, of which 898 cases were ongoing as of the last quarter.
From the 586 cases that have seen closure, almost 302 witnessed commencement of liquidation,
while 79 witnessed closure by resolution. According to a note by Kotak Securities, “Based on
available data for all 79 cases resolved under the insolvency resolution process till Q3FY19,
financial creditors have faced a haircut of approximately 52% on admitted claims. The issue that
is being faced is the many instances of liquidation, instead of revival. It has been adequately
demonstrated in the data provided by IBBI hereinunder.

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Source: https://ibbi.gov.in/uploads/publication/QUARTERLY_NEWSLETTER_FOR_OCT_DEC_2019.pdf

It is notable that the liquidation remains a favourable choice despite the resolution value being
higher than the liquidation value.

LITERATURE REVIEW
• Dr. M. S. Sahoo in his article ‘Resolution: The Soul of IBC’ discusses eloquently ‘resolution’
as the soul of the Insolvency & Bankruptcy Code, 2016. The author discusses the provisions of
the act, regulations, various judicial pronouncements, etc. in order to argue that resolution is the
soul/primary focus of the insolvency and bankruptcy code. The author juxtaposes the resolution
mechanism with recovery/liquidation mechanism.He also states that it is the duty of the CoC to
make efforts towards resolution atleast in all cases where the enterprise value exceeds
liquidation value.
• Pratik Datta in his study titled ‘Value Destruction and Wealth Transfer under the Insolvency
and Bankruptcy Code, 2016’ argues that such ‘value destruction’ of profitable businesses is due
to certain design flaws in the law. For instance, any insolvency resolution plan under the law
relies on the vote of financial creditors, whose interest in the firm may not go beyond the
recovery of their own claims. As such they are likely to prefer selling off firm’s assets to cut
their losses rather than evaluate the risk of letting the company run its operations. Datta argues
that a well-designed insolvency law should differentiate between “financially distressed” firms
and “economically distressed” firms. When the present value of the expected profits of a
company is less than the total value of the assets of the company, were they to be broken up

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 and sold separately, the company is economically distressed. Whereas if a company is not
economically distressed but is merely unable to service its debts, it is merely financially
distressed. The assets of such a firm are more valuable if kept together as a functioning unit.

STATEMENT OF PROBLEM
Resolution of the Corporate Debtor is the soul of the Insolvency & Bankruptcy Code, 2016.
However, the number of cases that conclude in resolution of Corporate Debtor are very few relative
to the number of cases resulting in liquidation.

HYPOTHESIS
The reason for such critically low number of resolutions under the Insolvency and Bankruptcy
Code, 2016 is due to the absence of a mature operational ecosystem and an inherent flaws in the
law.

RESEARCH OBJECTIVE
The objective of the study is to test the hypothesis.

RESEARCH QUESTIONS
• What are underlying reasons for the large number of insolvency cases resulting in liquidation
of the Corporate Debtor, as compared to those concluding in successful resolutions?

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 II. CONCEPTUAL ANALYSIS

2.1 INSOLVENCY
Creditors make debt5 investments with the expectation of fixed future cash flows at a later date.
When the debtor defaults6 or fails to make payments as per the contract, the debtor is considered
an insolvent. There may be several causes for a debtor to be termed as being insolvent. These have
been briefly discussed hereinunder.

2.2 BANKRUPTCY
An enterprise is considered unviable7 or bankrupt when the cost of financial arrangement required
in order to keep the enterprise as a going concern is higher than the net present value of future
expected cash flows. When an entity is described as being bankrupt, the economic decision of
shutting it down as soon as possible is considered better than trying to keep to keep it alive by
taking measures such as infusion of fresh capital etc.

As opposed to an enterprise that has become bankrupt, a viable enterprise is given a chance by
way of financial rearrangements that allows the creditors to earn a higher economic value than by
shutting down the enterprise.

2.3 RESOLUTION
Resolution refers to a plan proposed by any authorised person/entity for enabling the overdue
payments of a corporate debtor through restructuring or through part payments, while allowing the
corporate debtor to continue as a going concern.

Resolution entails a financial arrangement to preserve the economic value of the business. Through
this arrangement, the enterprise continues to function as a going concern. Resolution involves
balancing of all available information (information symmetry), including all future prospects of

5
‘Debt’ has been defined under IBC under Section 3(11)
6
‘Default’ has been defined under IBC under Section 3(12)
7
Deciding whether an enterprise is viable or not is a market prerogative in the nature of collective representative
decision making. Committee of Creditors (CoC) have been assigned this function of determining the viability of
enterprise during the insolvency resolution process.

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economic developments as per which the enterprise will operate. It will also include possibilities
of alternate investment opportunities for the stakeholders (creditor(s) and debtor)

Recently, the National Company Law Appellate Tribunal, while considering (Also, approving) the
revised resolution plan submitted by Ultratech Cement Limited in the insolvency resolution
process initiated against the corporate debtor. in Binani Industries Limited v. Bank of Baroda &
Anr.8 laid down certain principles that a resolution plan under the IBC should comply with. These
include, inter alia that:

(a) A resolution process under IBC is not an auction. Feasibility and viability of a ‘Resolution Plan’
are not amenable to bidding or auction. It requires application of mind by the 'Financial
Creditors' who understand the business well. Functionally, the resolution plan shall resolve
insolvency, maximise the value of assets of the corporate debtor, and promote entrepreneurship,
availability of credit, and balance the interests of all the stakeholders.
(b)The resolution plan is not a sale, or auction, or recovery or liquidation but a resolution of the
Corporate Debtor as a going concern. A resolution process is not a liquidation. The IBC does
not allow liquidation of a Corporate Debtor directly and permits liquidation only on failure of
the resolution process. Recovery is an individual effort by a creditor to recover its dues through
a process that has debtor and creditor on opposite sides. The IBC,2016 discourages recovery.

Resolution and Liquidation have both been covered under the Insolvency and Bankruptcy Law in
India i.e. the IBC,2016. Note that Sick Industrial Companies (Special Provisions) Act. 1985
(‘SICA’) employed a court intervened resolution. It established a specialised board called Board
of Industrial and Financial Reconstruction(‘BIFR’) which was employed for the assessment of
viability of company. If assessed unviable, it refers the company to High Court for liquidation. It
was structured in form of a representative market decision.

2.4 RECOVERY
Recovery is understood as a pursuit to recover the debt from the debtor, primarily on a first come
first serve basis. The aim of recovery is to avoid being a part of the process of resolution of the
sick entity, but instead to protect one’s own interests. This is generally seen as resulting into an

8
Binani Industries Limited v. Bank of Baroda & Anr, (Company Appeal (AT) (Insolvency) No. 82 of 2018),
MANU/NL/0284/2018.

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inequitable distribution of assets among the claimants/creditors. Experts describe it as an
“antithesis of resolution”(As per Dr. Sahoo, Chairman IBBI).

It is pertinent to note that ‘Recovery’ is very different from ‘Resolution’.

A civil court having jurisdiction forms the basic mechanism available to a creditor for pursuing
debt recovery. If loan is backed by security, it is enforced under the Contract law. Other
mechanisms for debt recovery can be found under Recovery of debt due to Banks and Financial
Institutions Act, (RDDBFI Act, 1993), Securitisation & Reconstruction of Financial assets ad
Enforcement of Security Interest Act, 2002 (SARFAESI, 2002).

2.5 LIQUIDATION
Liquidation is generally described as the ‘death warrant’ of the company. Liquidation involves
destruction of organisational capital of the company. Since, failure of some business plans/projects
is integral to the market economy, the best way out of a default situation is to have resolution by
way of rapid negotiations between the investors/ creditors, such that the business is financed to
function as a going concern. This will involve new arrangement of liabilities as well as new
management team. If the situation does not warrant such negotiations, decision to liquidate the
entity is made.

Under IBC, firms go for liquidation in two ways. Route one is when the CoC swiftly come to
conclusion that the entity is not a viable on entity and decide to pursue liquidation, instead of
resolution. The second route is taken when the time limit of 180 days (generally)/270 days (in very
special/complex cases) as prescribed under IBC lapse and the CoC has failed to obtained the
required supermajority of 66% in the creditors committee. (earlier, 75%) In such a scenario, the
liquidation is automatically triggered. The process is led by a liquidator, who also holds the assets
of the company in trust in the meantime. The amount recovered through liquidation is used to pay
the various claimants through a well defined waterfall provision under Section 53 of IBC.

Liquidation as understood in the context of Insolvency and Bankruptcy Code is a mechanisms for
recovery of dues. It is considered method of last-resort for recovering the debts. In practicality, the
value that is generally recovered tend to suffer huge hair cuts. But considering the take-it or leave-
it situation, the creditors even settle, though grudgingly, for payments at such huge hair cuts.

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2.6 SURVIVOR FUNCTION
The survivor function denote the proportion of cases that are not resolved at X day counted from
day zero. At date zero, the survivor function is allotted the value 1, which means that 100 percent
of the cases are pending. As time passes, insolvencies progressively get resolved. Those cases that
remain pending are referred to as the ‘survivors’;.9

2.7 FINANCIAL FAILURE/ FINANCIAL DISTRESS

There may be several reasons for an enterprise turning insolvent. The three reason that BLRC
identifies are threefold. Them being-

(a) Fraudulent Behaviour

(b) Financial Failure

(c) Business Failure

An entity facing financial failure is characterised as situation when a persistent mismatch exists
between payments by enterprise and the receivables of enterprise, even though the business model
keeps churning out revenues. A business is financially distressed when total value of its debt
exceeds its net present value.

2.9 BUSINESS FAILURE/ ECONOMIC DISTRESS

An entity facing financial failure is characterised as situation when the business model of the
enterprise breaks down and collapses, so as to be unable to generate sufficient revenues to meet
payments, resulting in defaults. Economic distress is when the net present value of the business is
less than the total value of the assets of the business were they to be broken up from the business
and sold separately (Also called as break-up/’liquidation value’).

9
Ajay Shah & Anr., The Indian Bankruptcy Reform: The State of The Art, 2018, Published on December 24 2018.
Accessed on https://www.bloombergquint.com/insolvency/the-indian-bankruptcy-reform-the-state-of-the-art-
2018#gs.2zrlih

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 III. RELEVANT LEGISLATIVE FRAMEWORK UNDER IBC

Historically, it has taken an unduly long period of time to wind up or liquidate a company in India
as compared to other countries. Such lengthy time-frames are detrimental to the interest of all
stakeholders. The process ought to be time-bound, aimed at maximizing the chances of preserving
value for the stakeholders as well as the economy as a whole.

A Report of Expert Committee on Company Law10 also dealing with the “Restructuring and
Liquidation” of companies noted that insolvency law should strike a balance between
rehabilitation and liquidation. It noted two cardinal principles that needs to be followed in an
effective insolvency regime. Firstly, the law should provide an adequate opportunity for pursuing
genuine effort to explore restructuring and rehabilitation of potentially viable businesses after the
stakeholders have arrived at a consensus. In case it is assessed that revival is not feasible,
liquidation should be resorted to. Secondly, where circumstances demand, the process should
allow for easy conversion of proceedings from one procedure to another i.e. from resolution to
liquidation, and vice-versa. The above has been adequately recognized as one of the essential
features in the report of the Bankruptcy Law Reforms Committee.

Although the Companies Act, 2013 allowed for creditors’ voluntary winding up, the provision has
been omitted now. Hence, the only option now remaining with the creditors is to move an
application before the National Company Law Tribunal (“NCLT”) under the provisions of the
Insolvency and Bankruptcy Code, 2016. As per the code, liquidation procedures cannot be initiated
by creditors as a first resort in the event of insolvency.

The Code prescribes that a financial or operational creditor can initiate the corporate insolvency
resolution process (“CIRP”) in case of failure by the corporate debtor to pay at least Rs. 1,00,00011

10
Jamshed J. Irani Report of Expert Committee on Company Law, May 31, 2005, Accessed on
http://www.mca.gov.in/mca/html/mcav2_en/home/dataandreports/reports/otherreports/report+of+the+expert+commi
ttee+on+company+law/restructuring+and+liquidation/restructuring+and+liquidation.html . (Para 7.1)
11
Section 4, IBC- “(1) This Part shall apply to matters relating to the insolvency and liquidation of corporate debtors
where the minimum amount of the default is one lakh rupees…”

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and only in the case of failure to work out a resolution plan will the corporate debtor be
liquidated.12 Report of The Expert Committee on Company Law states that:

“Law should provide a reasonable opportunity for rehabilitation of a business before a decision
is taken to liquidate it so that it can be restored to productivity and become competitive”.13

In conclusion, the Code adheres to the long-recognized principle that resolution should first be
attempted and, only if the attempts for resolution fail, then the liquidation should commence.

Under the code, once the application for initiation of the CIRP is admitted by the NCLT, the
process commences, the interim resolution professional constitutes a committee of creditors
(“CoC”) and the first meeting of the committee of creditors is held within (x+30) 30 days time.

As per the IBC, the following events lead to liquidation trigger:

• CoC was unable to agree on a workable resolution plan within 180 days (which may be
extended once by 90 days in special cases only)[“Adjudicating Authority… does not receive a
resolution plan under sub-section (6) of section 30”];14
• CoC decides to liquidate the company;15
• the NCLT rejects the resolution plan;16 or
• the corporate debtor or resolution applicant contravenes the requisite conditions pertaining to
the resolution plan.17

However, an important question is still subject matter of doubt and legal uncertainty is ‘Whether
the creditors can decide to liquidate the company in the very first meeting’?

Section 3318 of the Code stipulates that where the resolution professional at any point of time
during the CIRP, but before the confirmation of a resolution plan, informs NCLT of the decision
of the CoC to liquidate the corporate debtor, while fulfilling the statutory requirement of the

12
Section 33, IBC
13
Jamshed J. Irani Report of Expert Committee on Company Law, May 31, 2005, Accessed on
http://www.mca.gov.in/mca/html/mcav2_en/home/dataandreports/reports/otherreports/report+of+the+expert+commi
ttee+on+company+law/restructuring+and+liquidation/restructuring+and+liquidation.html . (Para 8)
14
Section 33(1), IBC, 2016
15
Section 33 (2), IBC, 2016
16
Section 33 (1) (b), IBC, 2016
17
Section 33 (3), IBC, 2016
18
Section 33 (2) of the Code reads as follows- “(2) Where the resolution professional, at any time during the
corporate insolvency resolution process but before confirmation of resolution plan, intimates the Adjudicating
Authority of the decision of the committee of creditors 1[approved by not less than sixty-six per cent. of the voting
share] to liquidate the corporate debtor, the Adjudicating Authority shall pass a liquidation order as referred to in
sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1).”

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requisite majority. a company may then be subjected to liquidation. On reading Section 33(2) of
the Code one can infer that the answer is in affirmative. Such an outcome has been confirmed by
the NCLT in several cases, as discussed hereinunder.

M.S. Sahoo, the chairman of the Insolvency and Bankruptcy Board of India, recently commented
on the high incidence of liquidation proceedings, which reads as follows19-

“Many of the 450-odd companies where insolvency proceedings have been admitted by the
NCLT have been struggling for survival for years, much before the [the Code] was implemented
late last year. Therefore, these are almost ‘dead’ cases where chances of insolvency resolution
are very remote, and liquidation is the only natural outcome.”

19
Banikinkar Pattanayak, Published on December 25, 2017, Accessed on
http://www.financialexpress.com/industry/insolvency-law-more-firms-going-for-liquidation-than-resolution-over-
20-face-closure/988676/

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 IV. PROBLEM OF ABUNDANCE OF LIQUIDATIONS UNDER IBC
In order to prevent value destruction due to an unnecessary attempt of resolution/delay in
liquidation, in many cases the CoC has opted for liquidation under Section 33(3). These are cases
which lay down good jurisprudence on the subject. These cases are where the CoC had considered
all the factors related to viability of a business in order to come to the conclusion that the
liquidation is the best bet. These factors could be absence of/ bad business prospects of the
company, nil operational propriety of the business (if in-operational for a long time), no
employees, no supplier, business failure due to obsolete business model etc. Consider the
following cases as examples where such relevant factors were duly considered by the CoC and the
adjudicating authority.

In Chivas Trading Private Limited v. Abhayam Trading Limited20, the corporate debtor was
liquidated citing the reason that there was lack of business opportunity. The creditors resolved that
there was no point in infusing good money to recover bad money, especially when the company
had no business prospects. Hence, intimated NCLT of the decision to liquidate the company as per
Section 33(2) of IBC.

In VIP Finvest Consultancy Private Limited v. Bhupen Electronics21, a miscellaneous

application was filed under Section 33(2). It was decided on by the adjudicating authority (NCLT,
Mumbai). In this case, the CoC was constrained to decide upon the viability of the business that it
is prudent for the company to go for liquidation, as the company had not been operational for
decades and had no employee on its payroll. According to the CoC and AA, the only valuable asset
remaining with the company was its fixed assets i.e. land and building. Therefore, the committee
of creditors did not come up with any resolution plan nor did it receive any from others.

Again, in the case of Best Deal TV Pvt. Ltd., the CoC decided to go for liquidation since the
business activities were already closed down, all employees had left the CD.

20
Chivas Trading Private Limited v. Abhayam Trading Limited, I.A. 36/2017, Decided on November 17, 2017
21
VIP Finvest Consultancy Private Limited v. Bhupen Electronics, Un-numbered MA in C.P. NO.03/I&BP/2017,
Order delivered on: 37.7 .2077

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In one case where a liquidation order was passed by the NCLT, Mumbai, the ex-chairman of the
corporate debtor Esskay Motors Pvt. Ltd.22 contended before NCLAT that the resolution
professional did not invite bids from interested parties. However, NCLAT observed that on record
there was no ‘resolution applicant’ who came forward to file a ‘Resolution Plan’. The CoC in one
of the meetings had asked the RP to come forward with a concrete proposal for revival of the
company as otherwise they will consider the question of liquidation of the company. In the absence
of resolution plan’, the CoC decided to go ahead with the liquidation. The committee of creditors
noted that “inviting bids would only prolong the process of resolution and will not yield any result”
as the corporate debtor was not a going concern.

This project is an attempt to enlist the possible causes for the large number of liquidations under
the IBC. This will help one better understand the imbalance that is being observed in the paradigm
of resolution versus recovery/liquidation.

UNDERLYING REASONS FOR LARGE NUMBER OF LIQUIDATION: AN ANALYSIS

It is empirically observed that majority of cases admitted under Insolvency & Bankruptcy Code
are ending up in liquidation, instead of revival/resolution. This is cited as one of the biggest
problems being faced in the implementation of the Code. Scattered literature is surfacing for
understanding this phenomenon. Though one needs to dig in deeper to be cent percent sure that
there are in fact the reasons for the abundant liquidations. Objective of this project is to identify
and collate reasons for such large number of liquidations under the Code. The following are the
often cited reasons:

Firstly, even though the focus still remains on resolution, the liquation numbers are high because
maximum cases come from BIFR (Board for Industrial and Financial Reconstruction) which was
established under SICA. These cases have reached a position where the revival was an absolute
impossibility. Most assets were beyond recovery. Experts are therefore not surprised by the
number of liquidation orders as the majority of the 136 companies sent for liquidation were
corporate defaulters with cases pending for adjudication under the BIFR.23

22
Esskay Motors Pvt. Ltd,.MA 677 in C.P. 1076/I&BP/2017 Delivered on January 8, 2018 (NCLT);
Chandra Kalian Parkash v. Rajeev Mannadiar & Ors, Company Appeal (AT) (Insolvency) No. 149 of 2018.
23
Advait Rao Palepu, Two years of IBC: Resolution for just 34 defaulters out of 91 cases, Accessed on

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According to the IBBI newsletter24, it is important to note that 75.16% of the CIRPs ending in
liquidation (227 out of 302) were earlier with BIFR and or defunct. One major reason why these
companies ended up in liquidation is that the resolution value for a majority of them was lower
than their liquidation value

Secondly, one major issue in the implementation of the IBC and CIRP is that the strict prescribed
time-lines for finding resolutions has not been adhered to, uniformly across cases. This, experts
say, is the biggest hindrance in the effective implementation of the bankruptcy law.

The IBC prescribes a strict time lines25 which allowed for CIRP to finish within 180 day
(generally)and 270 day (extended only in special cases).

The National Company Law Appellate Tribunal (“NCLAT”) has in the matter of Arun Kumar
Jagatramka vs Gujarat NRE Coke Ltd.26, order dated 10 July 2018 declined to exclude any period
for the purpose of counting the period of 270 days of ‘insolvency resolution process’ in absence
of any valid ground and thereby did not interfere with the Liquidation Order. However, NCLAT
clarified the position that the instant order passed by it and the liquidation Order passed by the
NCLT Kolkata will not come in the way of the NCLT to pass appropriate order in accordance with
law on the petition filed under Section 230 of the Companies Act, 2013 (power to compromise or
make arrangements with creditors and members). Though an order passed in pursuance of Section
230 application should not conflict with the provisions of the Code. Liquidation Order was passed

https://www.business-standard.com/article/economy-policy/two-years-of-ibc-resolution-for-just-34-defaulters-out-
of-91-cases-118091901314_1.html.
24
See Quarterly Newsletter of the Insolvency and Bankruptcy Board of India, October - December, 2018 ,Vol. 9.
25
Section 12, IBC.
26
Arun Kumar Jagatramka v. Gujarat NRE Coke Ltd, Company Appeal (AT) (Insolvency) Nos. 55-56 of 2018
Decided on July 10, 2018

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by the NCLT Kolkata against Gujarat NRE Coke Limited Corporate Debtor in absence of approval
of resolution plan and in want of time beyond 270 days, under Section 33 of the Code

This case is often cited to criticise the requirement of strict adherence of the 180/270 days’ time-
limt under IBC. It is argued that it can be a major cause for pushing a large number of companies
into liquidation, even those that were salvageable by way of resolution. In the above case also, the
resolution could not be considered by the CoC because the statutory time limit for approving the
resolution plan was exceeded. Also note that-

“The NCLT itself is stuck between a rock and a hard place. On the one hand, it has to ensure
that distressed companies are not liquidated without all other options being explored. On the
other, it has to uphold provisions of the IBC which don’t allow much wriggle room.”27

Thirdly, the recent demand concerns the amendment of the eligibility criteria of bidders in case of
corporate debtors that are MSMEs (micro, small and medium enterprises). It is argued that these
MSMEs may not find bidders at all in the NCLT. It is recognized that resolution is the soul of IBC
and is any day better than allowing the company go into liquidation. Unlike, the bid companies
(with strategically important plants and other assets, having crucial government permits that are
not easy to obtain, etc.) that see plenty of takers, these SMEs interest only a few. A case is being
built to allow promoters of these SMEs back. Ashish Gupta & Another in an article titled ‘IBC: A
code in need of an urgent upgrade’28 observed as follows-

“Globally, success stories of companies coming out of bankruptcy have involved private equity
firms, hedge funds, and vulture funds picking up the distressed asset, or existing promoters
spearheading a restructuring effort. “Why would anyone, other than the existing promoter, bid
for an engineering, procurement and construction (EPC) company, or a power plant that does
not have a power purchase or a fuel supply agreement, or a even services company with little
or no assets?”

27
Ashish Gupta & Anr., ‘IBC: A code in need of an urgent upgrade’, (May 23, 2018) Accessed on
https://www.fortuneindia.com/macro/an-insolvent-code/101904
28
Id.

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The recent Insolvency Law Committee report of March, 201829 recommends MSMEs be exempted
from certain provisions of Section 29A. It reads-

“Report by the Insolvency Law Committee is a sincere attempt to encourage sustainable growth
of the credit market in India, while safeguarding interests of various stakeholders. The key
recommendations in this Report are as follows:

(i) in recognition of the importance of Micro, Small and Medium Enterprises (MSMEs) to the
Indian economy and the unique challenges faced by them, it has been recommended to allow
the Central Government to exempt MSMEs from application of certain provisions of the Code.
Illustratively, since usually only promoters of an MSME are likely to be interested in acquiring
it, applicability of section 29A has been restricted only to disqualify wilful defaulters from
bidding for MSMEs;”

Fourthy, one of the widely recognized problems in the implementation of the code is the absence
of trained insolvency resolution professionals. There have been instances where because the
resolution professionals were not trained for the insolvency proceedings under the IBC, it has
resulted in the liquidation of the CD. Adequate efforts were not made by the RPs for resolution.

In the matter of Mr. Sandeep Kumar Gupta, IP (Order dated 15 October, 2018)30 The
Disciplinary Committee (DC) OF IBBI observed: “A corporate debtor undergoing CIRP
represents interests of several stakeholders…The Code assigns specific responsibilities in a CIRP
to various constituents. An IP has the responsibility to run the corporate debtor as a going concern
and conduct the entire CIRP. He has responsibility to run the process and assist the CoC in making
business decisions such as resolution and liquidation. It is the CoC only which can decide if and
how insolvency of a corporate debtor is to be resolved or it must be liquidated. It is not the job of
an IP to take a decision, directly or indirectly, or by omission or commission, for or on behalf of
the CoC or substitute itself for CoC.” It was observed in the instant case the IP had deprived the
CoC of its right to decide the fate of the corporate debtor and thereby pushed the corporate debtor

29
Report of the Insolvency Law Committee, 26 March 2018, Accessed on
http://www.mca.gov.in/Ministry/pdf/ILRReport2603_03042018.pdf
30
Mr. Sandeep Kumar Gupta, IP (Order dated 15 October, 2018), No. IBBI/DC/10/2018, Accessed on
https://ibbi.gov.in/webadmin/pdf/order/2018/Oct/Order%20Sandeep%20Kumar%20Gupta%2015102018_2018-10-
15%2018:22:37.pdf

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into liquidation. It found that Mr. Gupta has contravened provisions of Code read with the IP
regulations and the Code of Conduct. Monetary penalty was imposed on Mr. Gupta equal to 100%
of the total fee payable to him as IRP and as RP in the CIRP of Stewarts & Lloyds of India Ltd.
and was directed to undergo the pre-registration educational course from his IPA to improve his
understanding of the Code and the regulations made thereunder, before accepting any assignment
under the Code.

Another factor that has resulted in subversion of an efficient resolution process is institution of
frivolous cases against resolution professionals. This puts the process of successful resolution at
peril, pushing it towards the otherwise last resort of liquidation of the assets.

Resolution professionals are facing the wrath of other parties such as promoters and lenders.
Illustratively, Vijaykumar Iyer, the resolution professional for Binani Cement, has been threatened
with legal action by 12 operational creditors including Image Mine Products and Swastik Coal for
not keeping their interests in mind while drawing up the resolution plan. If such cases are
consistently instituted against the resolution professionals, RPs will start moving away because
their reputation and a credibility is also at peril and needs to be upheld. Note that to ensure a better
resolution of the firm and to prevent liquidations when not warranted, the resolution professionals
should be answerable only to the consortium of lenders i.e. CoC.

Fifthly, ‘Value destruction’ of profitable businesses is due to certain design flaws in the law. For
instance, any insolvency resolution plan under the law relies on the vote of financial creditors,
whose interest in the firm may not go beyond the recovery of their own claims. In such a case they
are likely to prefer selling off firm’s assets to cut their losses rather than evaluate the risk of letting
the company run its operations. In light of this design flaw, the possibility is that the committee of
creditors would rather go for liquidation, than attempt a successful resolution with the large
number of risks involved along with the delayed realisation of the debt owed to them.

Sixthly, Datta in his work “” argues that a well-designed insolvency law should differentiate
between “financially distressed” firms and “economically distressed” firms. The distinction is that
when the present value of the expected profits of a company is less than the total value of the assets
of the company, were they to be broken up and sold separately, the company is ‘economically
distressed’. Whereas if a company is not economically distressed but is merely unable to service

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its debts, it is merely ‘financially distressed’. The assets of such a firm are more valuable if kept
together as a going concern.

Commenting on the view held in the paper Nikita Kwatra in an article titled ‘The IBC has an
incentive problem’ in Live Mint31 observes as follows-

“Such a [financially distressed] firm should be sustained either by restructuring it among

existing claimants, or by selling it to new investors. For insolvency resolution to be truly
successful, policymakers must revisit the incentive problems implicit in the design of the law,
the author suggests.”

It must be observed that the Code does not distinguish between a financially distressed firm and
an economically distressed one. It is essential that such a distinction is brought in the code as soon
s possible by way fo amendment. This will put a filter and prevent those cases of liquidation of
firms that are only financially distressed, which could be resolved under the code.

OVEREMPHASIZING RESOLUTION?
Since its enactment in 2016, the Insolvency and Bankruptcy Code has been quoted as a great
achievement of the NDA government’s reform agenda. There is little doubt that the IBC has helped
with the bad loan crisis in the country. It had some positive impact on India’s credit culture.

Key to the IBC has been its constant push towards time-bound management of distress by relying
on the commercial wisdom of the creditors and other market players. The IBC allows the CoC to
ascertain if a company is viable or not, and if its business should be carried on, within a defined
period of time. (as discussed above). CoC invites resolution plans and approve the one that is most
feasible. Where the CoC ascertains that the company is not viable, they need not keep providing
the company credit to remain a going concern, and may send it to liquidation under Section33 of
the code. This process is aimed at freeing up capital to finance businesses that deserve the capital
and will use it for business plans which have greater probability of succeeding.

IBC represented moving away from the old insolvency processes under SICA and the Companies
Act. Earlier insolvency regime held a bias towards keeping even commercially unviable companies

31
Nikita Kwatra, ‘The IBC has an incentive problem’, January 2, 2019 Accessed on
https://www.livemint.com/Industry/nYs7QsAfNqtgGoQHZw2zBJ/The-IBC-has-an-incentive-problem.html

22 | P a g e
running. However, recent developments suggest that this practice may be making a comeback
under the IBC.

The purpose of the Code is resolution and not liquidation, even though the Code is drafted to be
outcome neutral. Supreme Court judgments have declared that liquidation should only be a last
resort, and should be avoided.

The NCLAT (National Company Law Appellate Tribunal) held that even where a liquidation order
is passed, the liquidator must first attempt to revive the company and run it as a going concern
before selling the assets of the company. In light of this decision of NCLAT whether the market
sees value in the company, this process to keep the company running will be carried.

The ministry of corporate affairs all set to notify regulations on last possible measures for revival
of companies that have been ordered for liquidation through the insolvency process.

A senior official at Ministry of Corporate Affairs commented that – “Once the liquidation order is
given, the liquidator has to explore Section 230 of the Companies Act first. We are working on the
regulation on how this will be done and the process that will be followed," a aware of the
developments said.”32

This is result of an order of NCLAT33, in which NCLT directed the liquidator to exhaust options
available under Section 230 as well, before proceeding to attempt to liquidate the company. An
over-emphasis on the opinion that liquidation should be avoided at all costs, and revival must be
attempted even after a liquidation order has been passed can have disastrous effects on the
economy in the long term. The underlying reasons for this belief is that keeping a company running
is the best outcome in the short term, since it saves the jobs of workers, and avoids the impression
that banks have unfairly captured the wealth of the company.

“The practice of exploring revival of the company even after the liquidation order was passed was
common under the old regimes of SICA and companies Act. However, where a company is not

32
Rules to revive companies before liquidation to come out soon , Published on March 26, 2019 Accessed on
https://cfo.economictimes.indiatimes.com/news/rules-to-revive-companies-before-liquidation-to-come-out-
soon/68573086
33
Arun Kumar Jagatramka v. Gujarat NRE Coke Ltd, Company Appeal (AT) (Insolvency) Nos. 55-56 of 2018
Decided on July 10, 2018

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economically viable anymore, the value of the assets of the company will erode while the liquidator
keeps attempting to save it as a going concern. Keeping it running in such a state will only have
long-term ill effects.”34

Banks ' capital will continue to remain tied to subsidizing completely worthless firms ' failure and
impede their ability to support viable projects that can provide a higher number of economically
valuable jobs.

Argument that an attempt to revive the company will prevent the heightened workers’ woes ,must
not be dealt with by artificially extending the lives of companies that are not viable anymore.
Instead, the problem must be addressed by way of robust social security schemes

Indeed, if the IBC mechanism is tinkered with in order to avoid liquidation, without distinguishing
between viable and unviable projects, we may soon find ourselves exploring revival at all costs as
was the case in the pre-IBC days. This is likely to weaken the credit discipline and
accomplishments that have been achieved since the Code was put into effect.

Recently, NCLT, Delhi35 ruled in a judgment that a resolution plan does not really need to follow
the letter of the law i.e. IBC. In this case, Liberty House, which submitted a bid or Bhushan Power
and Steel after the deadline prescribed under the law. It can be argued that Liberty House used
information from other bids and submitted a higher one. The bid was rejected because it was filed
late, and predictably, the case was taken to NCLT. NCLT observed-

“The resolution plan of Liberty House shall not be rejected on the ground of delay emanating
from process document or any other document internally circulated by the RP [resolution
professional] or CoC [consortium of creditors],”

Furthermore, NCLAT in the same matter went on to observe as follows-

“35. From the aforesaid decision in “Binani Industries Limited” (Supra), it is clear that prior
to the ‘Committee of Creditors’ voting upon ‘Resolution Plan’, it is open to the ‘Committee of

34
Shreya Prakash , ‘Companies should not have nine lives’, Published on March 14, 2019,
https://www.thehindubusinessline.com/opinion/companies-should-not-have-nine-lives/article26536261.ece
35
Tata Steel Limited v. Liberty House Group Pte. Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 198 of 2018,
Accessed on https://nclat.nic.in/Useradmin/upload/19807396735c58251eedb58.pdf

24 | P a g e
 Creditors’ to call for and consider the ‘improved financial offer(s)’ in accordance with the
statutory mandate to ensure value maximization.

36. The ‘Process Document’ for the ‘Corporate Insolvency Resolution Process’ of the
‘Corporate Debtor’ does not curtail the powers of the ‘Committee of Creditors’ to maximize
value.”

It must be noted that the Adjudicating Authority is in a tough spot. On one hand it wants to strictly
adhere to the IBC provisions and on the other hand it is required to pursue the insolvency process
in a direction which best ensures a resolution instead of liquidation. Clear set of guidelines would
go a long way in ensuring that this incessant desire to prevent liquidation does not result in hurting
the economy in the long term.

Though it is true that there are large number of cases in which liquidation was the final conclusion,
it does not mean that there are no cases to look up to in which AA has played a positive role in
ensuring that the CoC and RP make adequate efforts towards resolution.

Take the example of M/s Rave Scans Private Limited.36 In this case, the CoC (Creditor
representing 35% of the voting rights voted against the resolution plan) rejected the resolution plan
without giving sufficient reasons. Note that the resolution plan provided for a sum of 51 Crore
Rupees, whereas the liquidation value of the Company was merely 36 Crore Rupees. Even before
NCLT, the creditor who rejected the plan was unable to furnish any reasons for rejection. In view
of the larger public interest and the objectives of the Code, the NCLT directed the committee to
reconsider the resolution plan, even when the 270 days period under the code had already lapsed.

36
M/s Rave Scans Private Limited., (IB)-01(PB)-2017 Order delivered on October 17, 2018,
https://ibbi.gov.in/webadmin/pdf/order/2018/Oct/17th%20Oct%202018%20in%20the%20matter%20of%20Rave%2
0Scan%20Pvt.%20Ltd.%20(IB)-01-(PB)-2017_2018-10-24%2015:51:07.pdf

25 | P a g e
 V. CONCLUSION & SUGGESTIONS

In the beginning of this project, a proposition was placed which stated that majority of cases
admitted under Insolvency & Bankruptcy Code are ending up in liquidation, instead of
revival/resolution. This is cited as one of the biggest problems being faced in the implementation
of the Code. This project attempted to identify the possible reasons for the same. In conclusion,
the following are the reasons:

(1) Even though the focus still remains on resolution, the liquation numbers are high because
maximum cases come from BIFR (Board for Industrial and Financial Reconstruction) which
was established under SICA. These cases have reached a position where the revival is an
absolute improbability.
(2) One major issue in the implementation of the IBC and CIRP is that the strict prescribed time-
lines for finding resolutions has not been adhered to, uniformly across cases. According to
experts this is the biggest hindrance in the effective implementation of the bankruptcy law. In
cases where the strict time line is followed, it has been a reason for pushing a large number of
companies into liquidation, even those that were salvageable by way of resolution if given
some more time.
(3) Unlike, the significant bid companies (with strategically important plants and other assets,
having crucial government permits that are not easy to obtain, etc.) that see plenty of takers,
Small and Medium Enterprises interest only a few people in the market.
(4) There have been instances where because the resolution professionals were not trained for the
insolvency proceedings under the IBC, it has resulted in the liquidation of the CD. In these
cases, adequate efforts were not made by the RPs for resolution. To add to the troubles,
frivolous cases being filed against resolution professionals. This puts the process of successful
resolution at peril. It therefore tends to push the process towards the last resort of liquidation,
if questions are raised over their propriety.
(5) Value destruction of profitable businesses is due to certain design flaws in the law. Any
insolvency resolution plan under the law relies on the vote of financial creditors (CoC), whose

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 interest in the firm may not go beyond the recovery of their own claims. In such a case, even
the FCs may direct the process towards liquidation.
(6) Another design flaw pertains to the fact that the code does not distinguish between a
financially distressed firm and an economically distressed one. It is essential that such a
distinction is brought in the code as soon as possible.
IBC represented moving away from the old insolvency processes under SICA and the Companies
Act. Earlier insolvency regime held a bias towards keeping even commercially unviable companies
running. However, recent developments suggest that this practice may be making a comeback
under the IBC.

In conclusion, the code as well as the implementors of the code needs to strike a fine balance
between resolution and recovery. The author recognizes that the process under IBC is market based
and representative in nature, which makes it hard for one institution to ensure such a balance is
maintained. Hence, it is essential that all the institutions and individuals involved work with a clear
conscience for the greater good of the market, competition and the business. They all need to work
together. Further, the legislature needs to create those filters in the legislation and subordinate
legislation which prevents an undue importance to either resolution or liquidation.

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 VI. BIBLIOGRAPHY
STATUTES

• Insolvency & Bankruptcy Code, 2016

• Companies Act, 2013
• The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities
Interest Act, 2002 (“SARFAESI Act”)
• The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (“RDDBFI Act”)

Cases

Arcelor Mittal India Pvt. Ltd. v. Satish Kumar Gupta and Ors., Civil Appeal Nos. .9402-9405 OF
2018, MANU/SC/1123/2018 ...................................................................................................... 5
Arun Kumar Jagatramka v. Gujarat NRE Coke Ltd, Company Appeal (AT) (Insolvency) Nos. 55-
56 of 2018 Decided on July 10, 2018 ................................................................................. 18, 23
Binani Industries Limited v. Bank of Baroda & Anr, (Company Appeal (AT) (Insolvency) No. 82
of 2018), MANU/NL/0284/2018. ............................................................................................. 10
Chandra Kalian Parkash v. Rajeev Mannadiar & Ors, Company Appeal (AT) (Insolvency) No.
149 of 2018 ............................................................................................................................... 17
Chivas Trading Private Limited v. Abhayam Trading Limited, I.A. 36/2017, Decided on November
17, 2017..................................................................................................................................... 16
Esskay Motors Pvt. Ltd,.MA 677 in C.P. 1076/I&BP/2017 Delivered on January 8, 2018 (NCLT)
................................................................................................................................................... 17
M/s Rave Scans Private Limited., (IB)-01(PB)-2017 Order delivered on October 17, 2018 ....... 25
Mr. Sandeep Kumar Gupta, IP (Order dated 15 October, 2018), No. IBBI/DC/10/2018, Accessed
on
https://ibbi.gov.in/webadmin/pdf/order/2018/Oct/Order%20Sandeep%20Kumar%20Gupta%2
015102018_2018-10-15%2018:22:37.pdf ................................................................................ 20
Prowess International Pvt. Ltd v. Parker Hannifin India Pvt. Ltd., Company Appeal (AT) (Insol.)
No. 89/2017................................................................................................................................. 5
Sashidhar, Managing Director v. Kamineni Steel and Power India & Anr., CP. (IB) No.
11/10/HBD/2017 ......................................................................................................................... 5

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Tata Steel Limited v. Liberty House Group Pte. Ltd. & Ors., Company Appeal (AT) (Insolvency)
No. 198 of 2018 ........................................................................................................................ 24
VIP Finvest Consultancy Private Limited v. Bhupen Electronics, Un-numbered MA in C.P.
NO.03/I&BP/2017, Order delivered on: 37.7 .2077 ................................................................. 16
JOURNAL ARTICLES/ NEWSPAPER ARTICLES/ WORKING PAPERS

• Dr. M. S. Sahoo, ‘Resolution: The Soul of IBC’ Accessed on

https://ibbi.gov.in/Article%20Resolution%20The%20Soul%20of%20IBC%20in%20IBBI%
20Newsletter%20October-December%202017.pdf (Last Visited March 10, 2019)
• Pratik Datta, ‘Value Destruction and Wealth Transfer under the Insolvency and Bankruptcy
Code, 2016’, NIPFP Working Paper No. 247, 27-December-2018, Accessed on
https://www.nipfp.org.in/media/medialibrary/2018/12/WP_247.pdf (Last Visited March 10,
2019)
• Maulik Vyas & Shayan Ghosh, “Liquidation under insolvency and bankruptcy code a long
and tedious journey” Updated: 26 Dec 2018
https://www.livemint.com/Companies/yVhg4tc7HKIr8e2njiqN4K/Liquidation-under-
insolvency-and-bankruptcy-code-a-long-and.html (Last Visited March 10, 2019)
• Financial Express Bureau, “Two years of IBC: Near 52 pct of cases end in liquidation”
Published on January 26, 2019, Accessed on
https://www.financialexpress.com/economy/two-years-of-ibc-near-52-pct-of-cases-end-in-
liquidation/1455272/ (Last Visited March 10, 2019)
• Shreya Prakash , ‘Companies should not have nine lives’, Published on March 14, 2019,
https://www.thehindubusinessline.com/opinion/companies-should-not-have-nine-
lives/article26536261.ece
• Rules to revive companies before liquidation to come out soon , Published on March 26, 2019
Accessed on https://cfo.economictimes.indiatimes.com/news/rules-to-revive-companies-
before-liquidation-to-come-out-soon/68573086
• Nikita Kwatra, ‘The IBC has an incentive problem’, January 2, 2019 Accessed on
https://www.livemint.com/Industry/nYs7QsAfNqtgGoQHZw2zBJ/The-IBC-has-an-
incentive-problem.html

29 | P a g e
• Ashish Gupta & Anr., ‘IBC: A code in need of an urgent upgrade’, (May 23, 2018) Accessed
on https://www.fortuneindia.com/macro/an-insolvent-code/101904
• Banikinkar Pattanayak, Published on December 25, 2017, Accessed on
http://www.financialexpress.com/industry/insolvency-law-more-firms-going-for-liquidation-
than-resolution-over-20-face-closure/988676/
• Ajay Shah & Anr., The Indian Bankruptcy Reform: The State of The Art, 2018, Published on
December 24 2018. Accessed on https://www.bloombergquint.com/insolvency/the-indian-
bankruptcy-reform-the-state-of-the-art-2018#gs.2zrlih
• Advait Rao Palepu, Two years of IBC: Resolution for just 34 defaulters out of 91 cases,
Accessed on https://www.business-standard.com/article/economy-policy/two-years-of-ibc-
resolution-for-just-34-defaulters-out-of-91-cases-118091901314_1.html.

REPORTS

• Report of the Bankruptcy Law Reforms Committee (Published on Nov, 2015) Accessed on
https://ibbi.gov.in/uploads/resources/BLRCReportVol1_04112015.pdf (Last visited March
10, 2019)
• Report of the Insolvency Law Committee (Published on March, 2018), Accessed on
https://ibbi.gov.in/uploads/resources/ILRReport2603_03042018.pdf (Last visited March 10,
2019)
• Jamshed J. Irani, Report of Expert Committee on Company Law, May 31, 2005, Accessed on
http://www.mca.gov.in/mca/html/mcav2_en/home/dataandreports/reports/otherreports/report
+of+the+expert+committee+on+company+law/restructuring+and+liquidation/restructuring+
and+liquidation.html

WEBSITES

• https://ibbi.gov.in/
• https://nclat.nic.in/
• https://nclt.gov.in/
• http://www.mca.gov.in/

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