Vol 17 (2020) - Issue 1

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The Spadework Behind India’s Progressive Restructuring Regime: A Contextual Analysis of the IBC (Amendment) Act, 2019

Synopsis

The Insolvency and Bankruptcy Code (‘IBC’) is India’s newest legislation relating to the reorganisation and insolvency resolution of corporate persons, partnership firms and individuals while also being solely responsible for reshaping the behaviour of borrowers in the Indian economy. In fact, India has jumped fifty-three (53) places since the commencement of the Code to clinch the seventy-seventh (77) spot in the ‘Ease of Doing Business ranking’ in 2019. However, the developing nature of this legislation has not prevented the Government from being able to respond promptly to a rapidly evolving economy. For the same reason, the Minister of Finance introduced the Insolvency and Bankruptcy Code (Amendment) Act, 2019 (hereinafter referred to as the 'IBC (Amendment) Act 2019') on 24 July 2019 which accounts for the eighth amendment in relation to the Code, in order to encourage entrepreneurship, ensure availability of credit in the market and balance the interests of stakeholders. It is noteworthy that the most recent amendment principally responds to the position taken by the Adjudicating Authorities under the Code vis-à-vis the Essar Steel case. In these circumstances, this article provides a contextual exploratory analysis of six (6) key amendments under the IBC (Amendment) Act 2019 inasmuch as it outlines the former legislation, the pre-existing environment, the need for changes and the potential effect of such changes with respect to each amendment. The analysis of each amendment follows a uniform format: the former legislation, the amendment and its implications.