The framework for bankruptcy and insolvency resolution in India
is guided by the Insolvency and Bankruptcy Code, 2016
(IBC), which governs the provisions pertaining to
the re-organization and insolvency resolution of corporate persons,
partnership firms and individuals in a time bound manner.
As per the provisions of the IBC, if a company commits a default
of a minimum value of INR 1 crore, then its financial creditor,
operational creditor or such company itself may initiate the
Corporate Insolvency Resolution Process (CIRP)
under Chapter II of Part II (Insolvency Resolution and Liquidation
for Corporate Persons) of the IBC.
In simple terms, the IBC regime propounds a shift from the
‘debtor in control' regime to a ‘creditor in
control' regime and provides a mechanism wherein a neutral
person is appointed by the Hon'ble National Company Law
Tribunal (NCLT) known as the Interim Resolution
Professional (IRP), who may be later confirmed as
Resolution Professional (RP),
