A LEGAL AND JUDICIAL ANALYSIS OF CORPORATE INSOLVENCY RESOLUTION UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

Insolvency and bankruptcy constitute essential legal mechanisms to address financial distress of individuals and corporate entities. In India, the Insolvency and Bankruptcy Code, 2016 (IBC) was enacted to consolidate multiple overlapping laws into a single, time-bound insolvency resolution framework. The Code aims to promote credit discipline, maximize asset value, and ensure economic efficiency through a creditor-driven insolvency regime. While insolvency denotes the inability of a debtor to repay debts when due, bankruptcy refers to the legal process that follows insolvency, culminating in either resolution or liquidation. The IBC emphasizes resolution over liquidation, as reflected in Section 53, which provides for liquidation only when resolution fails. The Supreme Court in Innovative Industries Ltd. v. ICICI Bank (2017), clarified that once default is established, the adjudicating authority must admit the application, reinforcing the objective nature of insolvency determination under the Code.