Vol 18 (2021) - Issue 2

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Protecting Creditors’ Interests During the Pre-Admission Stage: Need for Interim Measures in Indian Insolvency Law

Synopsis
The Bankruptcy Law Reform Committee envisaged an all-encompassing insolvency code which would solve India's NPA problem. Over the years however, the reality has been quite different from what was imagined.
The use of IBC as a tool for debt recovery and the overly long pre-admission stage highlights the need for a framework for interim measures. This framework will help stop the debtors from alienating their assets and undertaking transactions which are prejudicial to the creditors. Since the enactment of IBC, several measures have been taken which highlight the legislature's intent to protect the creditors' interest. The introduction of a framework for interim measures will further the IBC's objective of protection of creditors' interest.