Author(s): Rana Navneet Roy, Deepak Kumar Srivastava, Satyansh Gupta
The “Insolvency and Bankruptcy Code of 2016” also known as IBC was introduced to simplify India's bankruptcy laws, foster a favorable business environment, and give precedence to business revival instead of immediate liquidation. Recent judicial decisions indicate that, even amid liquidation proceedings, there may be opportunities to propose revival plans, although the IBC does not explicitly incorporate this provision. This study's primary objective is to examine the interaction between the feasibility of compromise or arrangement proposals under Section 230 of the Companies Act and the concept of disqualifying promoters as outlined in Section 29A of the IBC. Recent pronouncements by the “National Company Law Appellate Tribunal” also known as NCLAT and amendments introduced by the “Insolvency and Bankruptcy Board of India” also known as IBBI introduce further complexity to this discourse. The research paper seeks to comprehensively scrutinize the legislative intent, consequences, and practical intricacies entailed in this regard. It tries to investigate whether there exists a contradiction between the essence of Section 230 of the Act and the stipulations of the IBC. The paper delves into the legal, procedural, and pragmatic dimensions surrounding the coexistence of these provisions within the context of insolvency proceedings and corporate rejuvenation. The paper also evaluates the effectiveness of the IBC, particularly considering the growing prevalence of liquidations in contrast to resolution attempts. It underscores the imperative need for a delicate equilibrium between revival and liquidation.