The proper purpose of insolvency law
The recent changes made to the IBC as well as some of the recommendations of the ILC report are an attempt to solve the problems surrounding IBC stakeholders that are better solved outside the IBC
When a company becomes insolvent, numerous issues arise. Insolvency law is meant to address some of them, but not all. For the others, the solution must be found in non-insolvency laws. This distinction has been overlooked by Indian policymakers in their attempts to reform the Insolvency and Bankruptcy Code, 2016 (IBC). The recently submitted report of the insolvency law committee (ILC) also reflects this oversight. This may hamper the desired outcomes of the IBC.