CORPORATE INSOLVENCY LAW: ISSUES AND CHALLENGES IN THE PRESENT SCENARIO

Abstract

This study provides a detailed examination of Corporate Insolvency Law in relation to the Issues and Challenges in the Present Scenario, drawing upon a methodical analysis that brings together legislative review, evaluation of judicial precedents, and a comparative assessment of international legal frameworks. The opening section explains the importance of a strong insolvency framework in protecting economic stability, preserving commercial value, and ensuring fair treatment of stakeholders. It further defines corporate insolvency and sets out its main types, identifying the conditions that start insolvency proceedings. The features of the governing legal framework are described in detail, with particular reference to the legislative scheme under the Insolvency and Bankruptcy Code, which provides a combined, time‑bound and creditor focused system for resolution and liquidation. The study also looks at how courts and tribunals have applied the law, showing how their decisions balance creditor recovery with corporate rehabilitation while also safeguarding procedural fairness. A comparison with selected foreign jurisdictions including the United States, United Kingdom, Germany, Singapore, Australia and Canada reviews different insolvency systems, such as debtor‑in‑possession models and creditor led administration processes. This part also shows areas where these systems meet on common ground, such as the use of transparent valuation standards and better cooperation in cross-border cases, as well as shared challenges like delays in proceedings, unequal creditor treatment and difficulties in handling multinational insolvencies. Lessons from these systems are used to suggest changes for India, including stronger institutions, clear cross‑border insolvency rules in line with international standards, and improved inclusion of operational creditors and other lesser‑represented stakeholders. The conclusion brings together the main points, noting that while India’s insolvency law has made major progress, ongoing structural and procedural problems still limit its efficiency and fairness. The paper then offers practical recommendations to improve institutional capacity, ensure more consistent court rulings, enhance valuation practices and support greater certainty in applying the law.