A Study on the Effect of the Insolvency and Bankruptcy Code (IBC) on Other Existing Legislation

Abstract

The (IBC), introduced in 2016, was a major step toward overhauling India’s insolvency and bankruptcy process. Its goal was to create a faster, more efficient, and structured system for resolving insolvency cases. This study looks at how the IBC has impacted existing laws, particularly focusing on its relationship with corporate governance, debt recovery, and financial restructuring. Before the (IBC), India's insolvency system was fragmented. It was made up of several laws that each dealt with insolvency in their own way, such as the Sick Industrial Companies Act (SICA), the Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI), and parts of the Companies Act, 2013. While these laws had their merits, they lacked the clarity, efficiency, and consistency that the IBC seeks to provide. This study explores how the IBC interacts with these older laws, looking at areas where they complement or even conflict with each other. One area of focus is how the IBC aligns with the Companies Act, especially when it comes to corporate governance and handling distressed companies. It also looks at how the IBC affects debt recovery, particularly in relation to the RDDBFI and SARFAESI Acts. The research shows that the IBC provides a more complete solution to large-scale bankruptcy issues. However, challenges remain, such as jurisdictional conflicts, procedural delays, and issues with cross-border insolvencies, which show where the IBC doesn’t always mesh well with older legislation. The research ultimately assesses the IBC's impact on enhancing the business environment in India, reducing non-performing assets (NPAs), and bolstering investor confidence. It concludes with suggestions on how the IBC could be further refined to better align with existing laws and global standards, ensuring a more efficient insolvency resolution process in the future.