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ARTICLE · 26 APRIL 2017

IBC Diluting The Rights Of The Secured Creditors

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The Insolvency and Bankruptcy Code ("IBC") Bill has been passed by both the Houses of Parliament and has received the assent of the President on May 28, 2016.

IndiaInsolvency/Bankruptcy/Re-Structuring
Sharad Tyagi
Sharad Tyagi
Saloni Sharma
Saloni Sharma
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INSOLVENCY AND BANKRUPTCY CODE, 2016

The Insolvency and Bankruptcy Code ("IBC") Bill has been passed by both the Houses of Parliament and has received the assent of the President on May 28, 2016. The IBC, inter alia, seeks to replace all existing laws related to bankruptcy resolution. This constitutes a vital transformation from the present system wherein multiple applicable laws were governing the insolvency and bankruptcy mechanism.

SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT, 2002

One of the existing laws dealing with the recovery of facilities / loans through enforcement of security interest is Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI"), pursuant to which the security interest may be enforced by the secured creditors such as banks and financial institutions, without intervention of the Court.

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