The Insolvency and Bankruptcy Code, 2016. — Bare Act, All Sections & Free PDF
दिवालियापन और दिवाला संहिता, 2016
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Overview
Enacted in 2016, the Insolvency and Bankruptcy Code is a landmark legislation consolidating laws on insolvency. It aims to resolve distressed assets swiftly. Applicable nationwide, it establishes a time-bound mechanism for creditors and debtors, maximizing asset value. It replaces fragmented older laws, promoting entrepreneurship and ensuring credit availability while restructuring or liquidating defaulting corporate and individual entities very effectively today.
सन् 2016 में लागू दिवालियापन और दिवाला संहिता भारत में दिवालियापन कानूनों का समेकन करती है। यह संकटग्रस्त संपत्तियों का त्वरित समाधान चाहती है। यह देशव्यापी लागू होकर लेनदारों के लिए समय-बद्ध तंत्र बनाती है। यह पुराने कानूनों का स्थान लेते हुए उद्यमशीलता बढ़ाती है और चूक करती कंपनियों का पुनर्गठन या परिसमापन पूर्ण रूप से सुनिश्चित करती है आज।
What is The Insolvency and Bankruptcy Code, 2016.
Enforced on May 28, 2016, the Insolvency and Bankruptcy Code (IBC) is a comprehensive Indian statute that consolidates and amends laws relating to reorganization and insolvency resolution of corporate persons, partnership firms, and individuals. It replaced multiple fragmented laws, including the Presidency Towns Insolvency Act, 1909, and the Sick Industrial Companies Act, 1985.
The primary objectives of this code are to resolve insolvency in a time-bound manner, maximize the value of assets, promote entrepreneurship, and ensure credit market stability. By establishing institutions like the Insolvency and Bankruptcy Board of India, the National Company Law Tribunal, and insolvency professionals, it created a unified framework.
If resolution fails within a strict timeframe, the entity undergoes liquidation. This legislation fundamentally shifted the balance of power from debtors to creditors, allowing them to initiate proceedings. It significantly improved India’s ease of doing business ranking by providing a predictable, transparent mechanism for addressing distressed assets.
Explanation
The scope of the Insolvency and Bankruptcy Code, 2016 extends comprehensively across corporate, partnership, and individual insolvencies, offering a unified legal framework. Key provisions dictate a strict timeline, requiring the resolution process to conclude within 330 days, failing which liquidation is mandated. Structurally, it empowers the National Company Law Tribunal as the adjudicating authority for corporate insolvency, replacing older, inefficient forums.
Companion laws such as the Companies Act, 2013, the SARFAESI Act, 2002, and the Recovery of Debts Act, 1993, intersect with this code. While SARFAESI allows secured creditors to enforce security interests outside court, the IBC takes precedence as the collective resolution mechanism, subordinating other recovery processes once triggered.
In the Indian justice system, this code plays a transformative role by clearing massive backlogs of bad debts and non-performing assets. It introduced the concept of interim resolution professionals who take over management from defaulting promoters, ensuring creditor confidence. By establishing a clear waterfall mechanism for asset distribution, it ends chaos during liquidation. The code severely penalizes fraudulent transactions, preferential payments, and wrongful trading. Ultimately, this legislation disciplines corporate borrowers, stabilizes the banking sector, and fundamentally recalibrated the broader financial and commercial legal landscape of modern India very effectively today.
Sections (Showing 1 to 10 of 253)
Section 1 to Section 10 (10 Sections)
Short title, extent and commencement.
(1) This Code may be called the Insolvency and Bankruptcy Code, 2016. (2) It extends to the whole of India: 1 * * * * *. (3) It shall come into force on such date 2 as the Central ...
Application.
The provisions of this Code shall apply to-- (a) any company incorporated under the Companies Act, 2013 (18 of 2013) or under any previous company law; (b) any other company govern...
Definitions.
In this Code, unless the context otherwise requires,-- (1) "Board" means the Insolvency and Bankruptcy Board of India established under sub-section (1) of section 188; (2) "bench" ...
Application of this Part.
This Part shall apply to matters relating to the insolvency and liquidation of corporate debtors where the minimum amount of the default is 1 [one crore rupees]: Provided that the ...
Definitions.
In this Part, unless the context otherwise requires,-- (1) Adjudicating Authority, for the purposes of this Part, means National Company Law Tribunal constituted under section 408 ...
Persons who may initiate corporate insolvency resolution process.
Where any corporate debtor commits a default, a financial creditor, an operational creditor or the corporate debtor itself may initiate corporate insolvency resolution process in r...
Initiation of corporate insolvency resolution process by financial creditor.
(1) A financial creditor either by itself or jointly with 1 [other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the Central G...
Insolvency resolution by operational creditor.
(1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in...
Application for initiation of corporate insolvency resolution process by operational creditor.
(1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor ...
Initiation of corporate insolvency resolution process by corporate applicant.
(1) Where a corporate debtor has committed a default, a corporate applicant thereof may file an application for initiating corporate insolvency resolution process with the Adjudica...
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