Prior Competition Clearance In Insolvency Resolution Process Now Mandatory – Step Towards "Ease Of Doing Business"

Article by MM Sharma, Head Competition Law & Policy Practice, Vaish Associates, Advocates, New Delhi, India

The enactment of the Insolvency and Bankruptcy Code, 2016 (IBC) has been often cited as one of the key economic reform of the present government. Undoubtedly the new enactment resulted in large corporate entities queuing up to acquire distressed companies and their assets, put on block following initiation of IBC proceedings, thereby infusing efficiencies in the economy due to likely revivals of such companies . Acquisition of a corporate debtor under the IBC begins with the submission of a resolution plan to the Resolution Professional (RP) by the resolution applicant (acquirer/bidder), followed by the approval of such resolution plan by the Committee of Creditors (CoC) and finally by the National Company Law Tribunal (NCLT).