Vol 18 (2021) - Issue 4

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Claw-back Provisions under Indian Insolvency and Bankruptcy Code: Conforming to the Conjecture?

Synopsis
In general, the bankruptcy regime recognises the concept that insolvency proceedings should be fair to all creditors and furthermore, should stimulate the principle of pari passu distribution of the assets. However, when in the vicinity of insolvency, it becomes highly likely that the debtor transfers property in favour of either influential creditors or any related party. Therefore, to reverse the effect of such transfer, the Indian Insolvency and Bankruptcy Code 2016 (hereinafter 'Code'), like any other jurisdiction, contains several provisions dealing with the avoidance transactions. Considering that Code is a new law and subject to constant changes, this article scrutinises as to whether the provisions are comprehensive or require reconsideration.