Amid various challenges, the Insolvency Bankruptcy Board of India (IBBI) has announced significant progress in the year 2023-24, with the National Company Law Tribunal recording a notable 43% increase in resolutions compared to the previous year. The IBBI is set to present a report to the government within the next 2-3 months proposing the inclusion of mediation in the Insolvency and Bankruptcy Code, a matter currently under discussion and review.
Furthermore, the IBBI is also focusing on introducing prepackaged insolvency for large corporate cases, which presently is only permissible for Micro, Small, and Medium Enterprises (MSME) cases. Sudhaker Shukla, an IBBI whole-time member, highlighted the reduction in pendency across India, emphasizing that for the first time in a year, the number of resolved cases exceeded the incoming cases. Shukla commended the progress of the Insolvency and Bankruptcy Code, noting the resolution of significant debt and withdrawal of numerous applications, illustrating the effectiveness of the code as a tool for debt resolution in the country.
Shukla also noted the continuous evolution of the law, with numerous amendments and interventions being implemented in the IBBI to address market requirements and enhance effectiveness. He emphasized the adoption of a sectoral approach to address unique challenges, such as in the real estate sector, where project-wise resolutions have been implemented to prevent the liquidation of allotted properties. Additionally, discussions around the demand for mediation and prepack insolvency for large accounts are ongoing, with plans to submit proposals to the government in the coming months.