In a growing economy like India, a healthy credit flow and generation of new capital are essential, and when a company or business turns insolvent or “sick”, it begins to default on its loans. In order for credit to not get stuck in the system or turn into bad loans, it is important that banks or creditors are able to recover as much as possible from the defaulter and as quickly as they can. The business can either get a chance, if still viable, to start afresh with new owners, or its assets can be liquidated or sold off in a timely manner. This way fresh credit can be pumped into the system and the value degeneration of assets can be minimised. In 2016, at a time when India’s Non-Performing Assets and debt defaults were piling up, and older loan recovery mechanisms such as the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), Lok Adalats, and Debt Recovery Tribunals were seen to be performing badly, the Insolvency and Bankruptcy Code (IBC) code was introduced to overhaul the corporate distress resolution regime in India and consolidate previously available laws to create a time-bound mechanism with a creditor-in-control model as opposed to the debtor-in-possession system. As well said by our Honorable vice president of India, everything is possible in any democracy if there is a Political Will and Administrative Skill, and undoubtedly the one major political will which to make ease of business in India as well as to cater the bad debts problem of finance of an individual or small sized business as well as corporates, is come out in the form of Insolvency and Bankruptcy code. This Act provides a new legal regime for time bound payments or restructuring of Loans/Debts through a robust legal framework. This code provides a new ERA in the area of Finance and Credit with Statutory Legal Framework at Par with other Jurisdiction of the world.

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Keywords: Insolvency, Bankruptcy, Resolution Plan, Insolvency Professional, Adjudicating Authority.