RECONSTRUCTING INSOLVENCY: THE TRANSITION FROM SICA TO THE INSOLVENCY AND BANKRUPTCY CODE, 2016
- YourLawArticle
- Oct 30
- 1 min read
Written by: Shubhi Sharma, LL.B (2nd Year ), School of Law, Lovely Professional University, Punjab, India
&
Dr Mohammad Rafiq Dar, Associate Professor, School of Law, Lovely Professional University, Punjab, India.
Abstract
India's insolvency framework has experienced a remarkable transition in the past four decades. India has moved from the piecemeal, ineffective regime under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), to the cohesive, creditor-centric Insolvency and Bankruptcy Code, 2016 (IBC), of insolvency law to respond to an emergent economy and to conform with global financial norms. This paper critically analyses the historical trajectory, legislative changes, institutional setup, and judicial interpretation that have influenced the landscape of today’s insolvency framework. We also critique the limitations of previous legislative attempts, highlight the key innovations instituted under the IBC, and characterise the remaining hurdles in realising the IBC's objective of achieving time-bound resolutions, maximising value, and encouraging entrepreneurship. The paper concludes with recommendations for policies to further enhance its efficiency and reliability in practice.
Keywords: Insolvency and Bankruptcy Code, SICA, BIFR, RDDBFI Act, SARFAESI, CIRP, NCLT, commercial wisdom.
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