UPDATE

THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - NEW ROAD AND NEW CHALLENGES

25 May 2016

Introduction

The National Company Law Tribunal (NCLT) was recently announced as the adjudicating authority for insolvency proceedings relating to companies, limited liability partnerships and other body corporates under the Insolvency and Bankruptcy Code 2016,(1) with effect from June 1 2016.(2) The National Company Law Appellate Tribunal (NCLAT), which will hear appeals from NCLT decisions, has also been established.(3) The NCLT will have 11 benches across India.

Introduction

No single umbrella legislation governs insolvency and bankruptcy proceedings in India. Instead, there is a slew of legislation governing the legal framework, including:

The insolvency and bankruptcy regime in India has historically been fragmented, involving a number of regulations implemented by several regulatory authorities and adjudication forums. The introduction of the Insolvency and Bankruptcy Code, 2016 (Insolvency Code) is a significant development aimed at a comprehensive, centralized regime and an efficient procedural framework.

The Insolvency Code is intended to integrate the regulatory framework provided under: