Concept Paper on Reforming the Corporate Insolvency Regime in India
This Concept Paper initiated the bankruptcy law reform process in India in 2014
Summary: It examines the reasons for the failure of the Indian corporate insolvency regime, evaluates international best practices and suggests a combination of substantive and institutional reforms for making the system more effective.
In the backdrop of rising insolvencies of businesses caused by the global economic crises, and India’s dismal ranking for resolving insolvencies in the 2014 ‘Doing Business’ Index, this Report examined the reasons for the failure of the Indian corporate insolvency regime and recommended a combination of substantive and institutional reforms to make the law more effective. It provided a conceptual understanding of the key issues plaguing India’s corporate insolvency regime at that time and outlined the policy alternatives which could be considered for improving the situation on the ground. The report recommended a complete overhaul of the corporate insolvency system in India and among other measures proposed an insolvency regime that provided for (a) a system of licensed insolvency practitioners under an independent authority and (b) provisions for automatic liquidation if a debtor was not resolved within a specified time-period. Today, these measures are recognized as two of the most important features of India’s new bankruptcy regime. It also evaluated the interaction of corporate insolvency law with debt recovery laws in India, made a case for developing an efficient system for addressing cross-border insolvencies in India and examined international practices and proposals that could be suitably adapted to the Indian context to make the system more efficient and robust.
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About the Authors
Debanshu is one of Vidhi’s Co-Founders. He has over a decade of experience in commercial laws and the financial sector and has advised the Government of India on several legislative projects in this space. He was instrumental in advising the Government on the design and drafting of the Insolvency and Bankruptcy Code and its subsequent implementation. He has developed and curated Vidhi’s work on insolvency law, corporate law, financial regulation, and competition law and conceptualized its Bankruptcy Research Program. He has served as a member of a Government-appointed committee for operationalizing the National Company Law Tribunal and deposed before two Parliamentary committees examining financial sector legislation. He has also worked as a teaching fellow at Harvard Law School. He is an alumnus of the Harvard Law School, the University of Oxford, and Hidayatullah National Law University. He attended Harvard as a Fulbright Scholar and was awarded the Irving Oberman Memorial Prize in Bankruptcy and the Dean’s scholar prize in Corporations. He was also awarded a Distinction for his graduate studies at Oxford. In 2017, he was selected for NYU School of Law’s Hauser Global Scholarship, which he waived. His academic work has been published in peer-reviewed journals and an edited book published by Cambridge University Press, New York. He has been consulted by and mentioned in global business publications, such as IFR Asia and The Economist. Earlier, Debanshu practiced as an M&A and regulatory lawyer with AZB & Partners at its Mumbai and New Delhi offices.
Arghya is the Founder and Research Director at Vidhi. His areas of specialisation are constitutional law and regulation of the digital economy. He has served on a number of government committees including the B.N. Srikrishna-led committee of experts on a data protection framework for India. Arghya has a number of academic publications on the Supreme Court and the Constitution in leading law journals such as Law Quarterly Review and Public Law. He is also a columnist at The Telegraph and The Times of India. He has most recently authored a book “Independence and Accountability of the Indian Higher Judiciary” (Cambridge, 2019) which builds on his doctoral work at Oxford University. Prior to founding Vidhi, he was at Oxford as a Lecturer in Administrative Law at Pembroke College.
