Insolvency resolution process

From Justice Definitions Project

What is 'Insolvency Resolution Process'?

The Insolvency Resolution Process is a time-bound legal mechanism under the Insolvency and Bankruptcy Code, 2016, through which the financial issues of a debtor—particularly a corporate debtor— is examined, and a structured attempt is made to resolve insolvency either by rescuing the business or determining that it should be liquidated.

It involves placing the debtor’s assets and management under the control of an Insolvency Professional, forming a Committee of Creditors, inviting and evaluating resolution plans, and reaching a decision within statutory timelines.

Official Definition of 'Insolvency Resolution Process'

The Insolvency and Bankruptcy Code, 2016 (IBC) does not provide a single, standalone definition of the term “Insolvency Resolution Process.” Instead, the concept is legally constructed through a combination of defined terms, statutory provisions, and procedural requirements within the Code. Insolvency Resolution Process in India is governed by the Insolvency and Bankruptcy Code, 2016 and comes into action through three types of processes for corporates as given below;

  • Corporate Insolvency Resolution Process (CIRP)
  • Pre-Packaged Insolvency Resolution Process (PPIRP)
  • Fast-Track CIRP

'Insolvency Resolution Process' as defined in legislation(s)

Indian legislation, particularly the Insolvency and Bankruptcy Code, 2016 (IBC), constructs the concept of Insolvency Resolution Process through a combination of procedural chapters and definitional clauses.

1. Corporate Insolvency Resolution Process (CIRP)-

Although the Code does not provide a single definition of the Insolvency Resolution Process, Chapter II (Sections 6–32)[1] establishes the structure and components of the Corporate Insolvency Resolution Process.

Significant sections include:

  • Section 6: Persons entitled to initiate CIRP.[2]
  • Sections 7–10: Application by financial creditors, operational creditors, and corporate applicants.[3]
  • Section 12: Statutory timelines for completion.[4]
  • Section 13–14: Public announcement and moratorium.[5]
  • Sections 16–21: Appointment and role of Interim Resolution Professional (IRP) and constitution of the Committee of Creditors (CoC).[6]
  • Section 30–31: Submission, approval, and binding effect of resolution plans.[7]

These provisions collectively define CIRP as a time-bound, creditor-driven insolvency mechanism intended for resolution rather than liquidation.

2. Fast Track Corporate Insolvency Resolution Process (Fast Track CIRP)-

Fast Track CIRP is a separate statutory insolvency resolution mechanism meant for smaller corporate debtors with simpler financial structures. It is a legislatively distinct, expedited resolution process, intended to reduce time and cost where the debtor’s financial structure is not complex.

  • Section 55(1): Enables a Fast Track version of CIRP for specific categories of corporate debtors.[8]
  • Section 55(2): Eligibility includes:
    • small companies,
    • startups (other than partnership startups),
    • unlisted companies with total assets not exceeding a prescribed threshold.[9]
  • Section 56: Completion timeline of 90 days, extendable by 45 days.[10]
  • Section 57: Moratorium and public announcement provisions apply similarly to CIRP.[11]
  • Section 58: Application of CIRP provisions to the Fast Track process with modifications.[12]

3. Pre-Packaged Insolvency Resolution Process (PPIRP)-

Chapter III-A (Sections 54A–54P) introduces the PPIRP mechanism for MSME corporate debtors. Key sections include:

  • Section 54A: Eligibility criteria and initiation.[13]
  • Section 54D: Timelines for PPIRP.[14]
  • Section 54K: Base resolution plan and competition with third-party plans.[15]

Although distinct in structure, PPIRP is also a form of insolvency resolution process recognised under the IBC.

Legal provisions relating to 'Insolvency Resolution Process'

There is no legal provision in the Insolvency and Bankruptcy Code, 2016 (IBC), that uses the generic term “Insolvency Resolution Process” as a standalone statutory provision.

The Code uses specific terms such as:

  • Corporate Insolvency Resolution Process (CIRP) – Part II of the IBC
  • Insolvency Resolution Process for Individuals and Partnership Firms (IRP) – Part III of the IBC
  • Pre-Packaged Insolvency Resolution Process- Part III-A
  • Fast Track Corporate Insolvency Resolution Process- Part IV

Therefore, the broad, generic phrase “Insolvency resolution process” is not itself a statutory provision, but an umbrella description used in practice to refer collectively to the different resolution processes provided in the Code.

Insolvency Resolution Process can be categorised broadly into 2 categories under IBC, 2016-

  1. Insolvency Resolution Process for Individual/partnership
  2. Insolvency Resolution Process for Corporate

Insolvency Resolution Process for Individual/ Partnership

Individual or Proprietorship

Fresh Start Process: Sections 78-93[16] of the IBC provide for a fresh start process for individuals with income below a specified threshold and aggregate debts not exceeding Rs. 35,000 (as specified). This allows for discharge from qualifying debts after fulfilling certain conditions without undergoing full bankruptcy proceedings.

Insolvency Resolution Process for Individuals: Sections 94-120[17] provide for a resolution process similar to corporate CIRP, where a repayment plan is developed to resolve the debtor's insolvency while allowing the debtor to continue economic activities.

Bankruptcy Process for Individuals: Sections 121-178[18] deal with bankruptcy orders where the debtor's assets are liquidated to repay creditors. This is the terminal stage of individual insolvency when resolution is not possible.

However, as noted by the Insolvency Law Committee (2020), these provisions for individuals and partnership firms have not yet been fully operationalised due to infrastructural and procedural challenges.

Below is the process for individuals/firms in brief [19]

Applicability & Adjudicating Authority

Under Part III of the Insolvency and Bankruptcy Code, 2016, the provisions apply to individuals and partnership firms where there is a default.  The Adjudicating Authority (AA) for these proceedings is the Debt Recovery Tribunal (DRT) and appellate authority is Debt Recovery Appellate Tribunal (DRAT).

The Code provides three distinct processes under Part III:

  • Fresh Start Process (Chapter II) – aimed at debtors with limited means.
  • Insolvency Resolution Process (Chapter III) – for negotiating a repayment plan when the debtor has defaulted.
  • Bankruptcy Process (Chapters IV & V) – triggered if the repayment plan fails, leading to liquidation of assets.

Part III of the Insolvency and Bankruptcy Code sets out a dedicated framework for addressing the insolvency and bankruptcy of individuals and partnership firms. The chapter-wise structure helps distinguish the preliminary requirements, the fresh start mechanism and the insolvency resolution pathway.

  • Chapter I: Preliminary (Sections 78-79) - This chapter explains the scope and applicability of Part III, including the monetary threshold for initiating the process. It also defines key terms that guide the operation of individual insolvency proceedings.
  • Chapter II: Fresh Start Process (Sections 80-93) - These provisions describe the fresh start mechanism available to eligible individuals who are unable to repay their debts. The chapter details the application procedure, examination by the resolution professional, the decision of the Adjudicating Authority, the operation of a moratorium and the conditions for discharge from qualifying debts.
  • Chapter III: Insolvency Resolution Process (Sections 94-120) - This chapter marks the starting point of the standard insolvency resolution route for individuals and partnership firms when a fresh start is not sought. It allows both debtors (Section 94) and creditors (Section 95) to file for insolvency. Upon filing, Section 96 imposes an interim moratorium, while Section 97 provides for the appointment of a resolution professional by the Adjudicating Authority to manage the process.

(Individual Insolvency is not yet operational in India)

1. Fresh Start Application

  • The debtor alone may apply personally or through RP for a fresh start (there is no provision for creditor-initiated fresh start).
  • Eligibility criteria (under Section 80) include: gross annual income ≤ ₹ 60,000; assets ≤ ₹ 20,000; qualifying debts ≤ ₹ 35,000; and the debtor must not own a dwelling unit; debtor should not be an undischarged bankrupt; none of the fresh start/ insolvency resolution process or bankruptcy process should be subsisting against him.
  • On filing the fresh start application, the DRT grants an interim moratorium from the date of filing, during which creditors cannot initiate or continue legal proceedings for the covered debts.
  • The application must contain list of debts owed to respective creditors along with interest, details of contract, securities, financial information (income, asset liabilities other information) of debtor and immediate family members up to 2 years prior to application, personal details, reason for application and other prescribed details.
  • If the application is filed through RP, the AA will seek confirmation from the board that there are no disciplinary actions pending against RP and if the application is filed by debtor, AA shall direct the board to nominate RP, all within 7 days of receipt of application/direction. RP shall then by duly appointed.
  • The RP examines the application (including debtor’s finances, assets, liabilities, other financial information) and sends a report to the DRT within 10 days recommending either acceptance or rejection along with reasons.
  • If the application is accepted, the DRT may grant a discharge order, writing off the “qualifying debts” for the debtor.
  • The debtor or creditor aggrieved by the decision of RP can file application to AA challenging the action.

2. Insolvency Resolution Process (IRP) – Initiation

  • Application - Either the debtor (personally or through an RP) or a creditor (alone or collectively or through RP), along with details as prescribed, may file for insolvency resolution under Chapter III. In the case of a partnership firm, the application must be made by the majority of partners. Debtor is not entitled to file for IRP if he is undischarged bankrupt or is undergoing a fresh start process/insolvency resolution process, or bankruptcy.
  • Admission and interim moratorium - Upon admission of the application, an interim moratorium comes into force for 180 days. In respect of the firm, the moratorium operates against all partners of the firm. During this moratorium, no suit, recovery, or enforcement proceedings can be initiated or continued against the debtor in respect of the debts under resolution. Certain restrictions apply to the debtor during this period, such as not being allowed to act in the management of a company or dispose of assets without permission.
  • Appointment of RP - If the application is filed through RP, the AA will seek confirmation from the board that there are no disciplinary actions pending against RP, and if the application is filed by the debtor, the AA shall direct the board to nominate RP, all within 7 days of receipt of the application/direction. RP shall then be duly appointed.
  • Duty of RP - The RP examines the application (including debtor’s finances, assets, liabilities, other financial information), seeks further information as needed, evaluates all details as required and prescribed and sends a report to the DRT within 10 days recommending either acceptance or rejection along with reasons. He can also recommend a fresh start process if all conditions for the same are satisfied. The AA can admit the application or reject it, granting the creditor entitlement to file for bankruptcy
  • Moratorium and collection of claims - Moratorium period comes into effect from the admission where legal proceedings are stayed or cannot be initiated and debtor cannot transfer assets. The AA shall issue public notice inviting claims from all creditors within 21 days. Creditors shall register their claims with RP with prescribed/requested details. The RP shall then collate all the details that debtor disclosed and creditors registered within 30 days of notice.
  • Formulation of repayment plan - The debtor prepares a repayment plan in consultation with RP, which may propose restructuring of debts, partial payments, asset sales, or other mechanisms. The plan may also authorise RP to carry on the business, realise assets, administer funds. It shall also include justification for the plan, provision for payment of fee to RP and other details as prescribed. The RP should submit the repayment plan along with his report of the plan, containing his analysis and recommendation to the DRT.
  • Creditors’ Meeting and Voting - If a meeting of the creditors are required, RP shall summon them, providing them with a copy of resolution plan, statement of affairs of debtor, report of the RP and forms for proxy voting. During the meeting, Creditors consider and vote on the repayment plan, suggest modifications. The voting share is assigned by RP in prescribed manner. The secured creditors vote is limited to the extent of unsecured debt, though he has the option to forfeit security to participate in voting. If the plan is approved by the requisite majority, the RP places it before the DRT along with his report of the meeting.
  • Approval / Rejection of the Plan by AA (DRT) - DRT reviews the RP’s report and the plan. If satisfied, it approves the plan, making it binding on the debtor and creditors. If DRT rejects the plan (due to non-viability, lack of creditor support, or other valid reasons), the IRP fails.
  • Implementation of Repayment Plan - Once approved, the debtor must implement the repayment plan under the supervision of the RP and it is binding on all parties. The RP monitors the plan’s execution, verifying payments and any restructuring conditions.

3. Bankruptcy Application (if IRP Fails)

  • Application - If the repayment plan fails (either due to non-performance by the debtor or rejection) or is not implemented, a bankruptcy application can be filed. The application for bankruptcy can be made by: the debtor, creditors, or partners in the case of a firm (per Section 121). Interim moratorium period starts from date of application
  • Appointment of Bankruptcy Trustee - The DRT appoints a Bankruptcy Trustee, who is usually an Insolvency Professional, under Section 125 in the manner as prescribed. The Trustee takes over the bankrupt’s estate, managing assets and liabilities for realisation and eventual distribution.
  • Order and its effect - The AA shall pass bankruptcy order within 14 days from appointment of the trustee. Moratorium period takes effect and the estate of the bankrupt vests on the trustee. The bankrupt should submit the financial position to the trustee in the prescribed manner. The AA invites claims from creditors and issues public notice of the order. The creditors register their claims with the trustee and the trustee prepares a list of all creditors based on his evaluation. Meeting of creditors is called for, with appropriate quorum and they shall discuss on matters that the trustee deems fit to be transacted.
  • Administration and distribution - The Trustee realises assets (by sale, liquidation) that are not “excluded assets”. The proceeds are distributed to creditors in a priority scheme as per the IBC.
  • Discharge of Debtor - After the estate is administered, the Trustee files a final report with the DRT. Based on this, the DRT may issue a discharge order, relieving the debtor from all “bankruptcy debts. The “discharge order” then marks the completion of the bankruptcy process for the individual or the firm.
  • Appeals / Other Remedies - Parties aggrieved by DRT orders (admission/rejection of application, discharge, etc.) can appeal to the Debt Recovery Appellate Tribunal (DRAT). The IBC also provides for potential modifications or revocation of bankruptcy orders under certain conditions (e.g., error apparent on face of order).
Partnership Firm Insolvency

Sections 78–178 set out distinct procedures for the insolvency of partnership firms, acknowledging their unique legal character. While the insolvency resolution framework for a partnership broadly aligns with that applicable to individuals, it incorporates specific variations tailored to the nature of partnership entities.

Insolvency Resolution Process for Corporate

Corporate Insolvency Resolution Process (CIRP)

Corporate Insolvency Resolution Process (CIRP) is the process of resolution of insolvency of a corporate debtor. The process is provided on a combined reading of the IBC Code, the Insolvency and Bankruptcy (Adjudicating Authority) Rules, 2016 and the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Chapter II[20] of the Act lays down the procedural aspects of CIRP.

Below is the CIRP in brief[21]

1. Applicability and Initiation - The Corporate Insolvency Resolution Process (CIRP) applies to all companies and Limited Liability Partnerships (LLPs) registered under the Companies Act or the LLP Act.

CIRP may be initiated by:

  1. A Financial Creditor - Under Section 7[22] of IBC 2016, financial creditor can submit an application to the NCLT in the prescribed format, accompanied by evidence of the default (submit records with IU).
  2. An Operational Creditor (supplier or service provider) - Under Section 9[23] of IBC, 2016, operational creditor issues a demand notice to the corporate debtor. If the debtor fails to make payment or raise a dispute within 10 days, the creditor may file an application before the NCLT, along with all relevant evidence of the debt and default.
  3. The Corporate Debtor itself, when unable to pay debts (voluntary insolvency resolution) - Under Section 10[24] of IBC, 2016 requires the passing of a special resolution by the shareholders, filing of the required form before the NCLT, and disclosures of company’s financial position and records.

The process can be triggered only when the minimum default amount is ₹1 crore. The creditor is required to prove the default with evidence

People who are not eligible for initiation of CIRP are:

  • a corporate debtor who is undergoing CIRP
  • a corporate debtor who has completed CIRP in the last twelve months;
  • a corporate debtor or a financial creditor who has violated any of the terms of resolution plan approved in the last twelve months; and
  • a corporate debtor in respect of whom a liquidation order has been made.

2. Admission, Moratorium and Commencement for CIRP - The NCLT shall admit or reject the application within 14 days of its receipt, and upon admission, the Corporate Insolvency Resolution Process (CIRP) shall commence from that date. Upon admission, a moratorium is declared, halting all pending legal proceedings, debt recovery actions, and asset transfers against the corporate debtor to prevent asset stripping and provide a "breathing space". An Interim Resolution Professional (IRP) is appointed within 14 days of commencement by NCLT. The creditors may propose the name of IRP in their application, failing which, the NCLT may reference to the IBBI and it may recommend IRP within 10 days from receipt of the reference.

3. Management Takeover & Claims - The IRP takes control of the assets and company's management, and the powers of the board of directors are suspended. The IRP makes a public announcement inviting creditors to submit their claims within a specified time (usually around 14 days). IRP is also required to collect information on assets, liabilities and other operations; manage the affairs of the company as a going concern; constitute committee of creditors; verifying creditors' claim.

4. Committee of creditors - The IRP collates and verifies all claims and forms the Committee of Creditors (CoC), primarily consisting of financial creditors (excluding related parties), within 30 days of the CIRP commencement date. In case there are no financial creditors, then 18 largest operational creditors (and in case of less than 18 total operational creditors, all of them), one representative workman and one representative employee would constitute to CoC as per the Regulation 16 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.[25]

In its first meeting (within 7 days of formation), the CoC decides whether to confirm the IRP as the Resolution Professional (RP) or appoint a new one, by a 66% majority vote. (financial creditor has voting rights in proportion to its financial debt). They also have the power to approve or reject resolution plans, decide on continuity of operations with a voting share of 66% majority.

5. Role of Resolution professional - Upon assuming office, the Resolution Professional (RP) is required to appoint two registered valuers within seven days to ascertain the corporate debtor’s fair value and liquidation value. Thereafter, the RP prepares a comprehensive Information Memorandum (IM) containing the financial position, operational details, assets, liabilities, litigation, and other material information relating to the corporate debtor as prescribed. The IM must be furnished to every member of the Committee of Creditors within two weeks of the RP’s appointment. Following its preparation, the RP invites prospective resolution applicants and provides access to the IM (subject to confidentiality terms). The Resolution Professional (RP) is obligated to seek appropriate directions from the Adjudicating Authority upon identifying preferential, undervalued, extortionate, or fraudulent transactions.

6. Resolution Plan Submission, evaluation and approval - The RP also invites resolution plans from eligible applicants ensuring compliance with the statutory disqualifications under the Code to formulate informed and compliant resolution plans addressing restructuring, repayment mechanisms, managerial strategy, and revival of the corporate debtor. Individuals are ineligible to submit a resolution plan if they are undischarged insolvents, willful defaulters, holders of non-performing accounts, convicted for offences punishable with imprisonment of two years or more, disqualified to act as directors, or barred from accessing or trading in the securities market, among other restrictions.

The CoC then evaluates the feasibility and viability of the submitted plans and approves one with a 66% majority vote. The CoC-approved plan is submitted to the NCLT for final approval. Once approved by the NCLT, the plan becomes legally binding on all stakeholders, including the government and operational creditors.

7. Implementation/Liquidation - If the resolution plan is approved, a new management takes over and implements it. If no plan is approved within the maximum time limit (generally 330 days), or the NCLT rejects the plan, or COC cannot agree on a plan or COC decides to liquidate the company or corporate debtor contravenes the plan, the corporate debtor proceeds to liquidation.

8. Waterfall effect on liquidation - In case of liquidation, the assets of the corporate debtor will be sold and the proceeds will be distributed amongst the creditors in the following order of priority:

  • cost of the insolvency resolution process and liquidation;
  • secured creditors (who choose to relinquish their security enforcement rights and workmen's dues relating to a period of 24 months preceding the liquidation commencement date);
  • wages and unpaid dues of employees (other than workmen) for a period of 12 months preceding the liquidation commencement date;
  • financial debts owed to unsecured creditors;
  • statutory dues to be received on account of Consolidated Fund of India or Consolidated Fund of a State (relating to a period of whole or part of 2 years preceding the liquidation commencement date) and debts of secured creditors (remaining unpaid after enforcement of security);
  • remaining debts and dues;
  • dues of preference shareholders; and
  • dues of equity shareholders or partners (as may be applicable)

Know more: Corporate Insolvency Resolution Process

Fast Track Corporate Insolvency Resolution Process (Fast Track CIRP)

The Fast Track Corporate Insolvency Resolution Process (Fast Track CIRP) is a specialised, expedited insolvency mechanism established under Chapter IV[26] of the Insolvency and Bankruptcy Code, 2016 (Sections 55–58). It is designed for corporate entities with relatively simple operations, low complexity of financial structures, or limited scale of business, enabling quicker resolution of distressed companies without the extensive procedures required in a standard Corporate Insolvency Resolution Process (CIRP). The process aims to achieve value maximisation and creditor recovery within a significantly shorter statutory timeline.

Fast Track CIRP may be initiated by a creditor or the corporate debtor itself when the debtor falls within the categories notified by the Central Government under Section 55(2)[27]. These typically include small companies, start-ups, unlisted companies with assets and income below specified thresholds, or any class of companies notified due to low complexity. Once the application is admitted by the Adjudicating Authority (NCLT), a resolution professional (RP) is appointed, and a 30-day moratorium automatically comes into effect, during which all judicial and enforcement actions against the corporate debtor are halted.

The Fast Track CIRP mirrors the structure of ordinary CIRP but operates under a condensed timeline. The RP is required to verify claims, constitute the Committee of Creditors (CoC), and prepare the information memorandum swiftly to facilitate resolution. The entire process must be completed within 90 days, extendable by a one-time extension of up to 45 days, but only upon a reasoned application by the RP demonstrating that the process cannot be completed within the original period. The maximum permissible duration is therefore 135 days, making it significantly shorter than the regular CIRP timeline of 330 days.

Throughout the process, the CoC evaluates resolution plans submitted by prospective resolution applicants, and the selected plan must be approved by not less than 66% of the voting share of the financial creditors. Upon CoC approval, the plan is submitted to the NCLT for final confirmation. If no viable resolution plan is approved within the Fast Track timeline, the NCLT may order liquidation under Chapter III[28] of the IBC.

Pre-Packaged Insolvency Resolution Process (PPIRP)

A PPIRP may be initiated only by a Corporate Debtor (CD) classified as a Micro, Small or Medium Enterprise (MSME) under Section 7(1) of the MSMED Act, 2006[29], provided the debtor has committed a minimum default of ₹10 lakh, is eligible under Section 29A[30], has not undergone PPIRP or completed a CIRP in the preceding three years, is not currently undergoing CIRP, and is not subject to an order of liquidation under Section 33. MSME status must be proved through a valid Udyam Registration Certificate or evidence of investment and turnover as per the April 1st, 2025, MSME notification.[31]

In a PPIRP, the Resolution Professional (RP) plays a central supervisory, monitoring, and facilitative role. Unlike CIRP—where the RP takes full control of the CD—in PPIRP the management remains with the Debtor-in-Possession (DIP), and the RP oversees the process to ensure transparency, fairness, and compliance. Before commencement, the proposed Resolution Professional (RP) must verify the CD’s eligibility, examine relevant documents, and prepare required reports; these duties cease if the application is not filed within the declared timeline or once the AA admits or rejects the application.

To initiate PPIRP, the eligible CD must file an application before the Adjudicating Authority (AA) under Section 54C[32], supported by a declaration, a special resolution or partners’ approval, consent and compliance report of the proposed RP, approval from unrelated financial creditors, disclosures regarding avoidance transactions or fraudulent trading, financial statements, and other prescribed records. The AA must admit or reject the application within 14 days, granting 7 days for rectification if it is incomplete; admission marks the formal commencement of PPIRP. The process must be completed within 120 days under Section 54D[33], with the RP required to submit the CoC-approved resolution plan to the AA within 90 days, failing which the RP must apply for termination on the following day. Once the process begins, the AA declares a moratorium under Section 54E[34], prohibiting actions such as recovery, foreclosure, or asset seizure; simultaneously, the RP is appointed, and a public announcement is issued. Under Section 54F[35], the RP manages claims, oversees the process, maintains documentation, constitutes and convenes the Committee of Creditors (CoC), and has access to all financial, operational, and statutory records, with support from financial institutions and stakeholders; the CoC determines the RP’s fees, which are included in PPIRP costs. Within two days of commencement, the CD must submit the list of claims and a preliminary information memorandum to the RP under Section 54G[36], and promoters or directors may be held liable for omissions or misleading information unless they prove absence of knowledge or consent. Unlike CIRP, under Section 54H[37], the management of the CD remains with its Board or partners, who must preserve asset value, ensure compliance, and continue business operations as a going concern. The RP must constitute the CoC within seven days of commencement under Section 54I[38], based on verified claims, and must conduct the first CoC meeting within seven days of its constitution; revisions in claims do not invalidate earlier CoC decisions. If there is evidence of fraud or gross mismanagement, the CoC may resolve to transfer the management of the CD to the RP under Section 54J[39], subject to AA’s approval, whereupon specific CIRP provisions apply. Under Section 54K[40], the corporate debtor must submit a base resolution plan within two days, which the CoC evaluates and may allow to be revised; if it either impairs claims or is not approved, the RP invites competing plans, and the CoC must approve a plan by 66% voting share before submitting it to the AA. Under Section 54L[41], the AA must approve the plan within 30 days if it meets statutory requirements and includes provisions for effective implementation; if it does not comply, the AA may reject it and terminate PPIRP, and where the plan does not involve a non-promoter and management remains with the same promoters, the AA may order liquidation.

Any appeal against AA’s approval of a resolution plan under Section 54M[42] may be filed only on the grounds specified in Section 61(3)—including legal contravention, material irregularity by the RP, inadequate provision for operational creditors, or violation of any IBC provision.

Finally, PPIRP may be terminated under Section 54N[43] if the RP applies due to non-submission or non-approval of the plan within the prescribed period, or if the CoC (by 66% vote) resolves to discontinue the process before plan approval; in both cases, the AA must pass a termination order within 30 days.

Know More: Pre-Packaged Insolvency Resolution Process

'Insolvency Resolution Process' as defined in International Instruments

International instruments do not define the exact phrase “insolvency resolution process.” Instead, they define and explain the concept through related terms such as “reorganisation proceedings,” “restructuring proceedings,” or “insolvency proceedings with the objective of preserving a viable business.”

UNCITRAL Legislative Guide on Insolvency Law (2004 – 2013)

This guide[44] is the most authoritative international document on insolvency frameworks. It explains “insolvency resolution” through reorganisation:

“Reorganization is an insolvency proceeding that aims at resolving the financial difficulties of the debtor by restructuring its business to allow it to continue operations.”

It also explains that resolution seeks continuation, not liquidation.

World Bank Principles for Effective Insolvency and Creditor / Debtor Regimes (2015)

The World Bank document[45] does not define “insolvency resolution process,” but defines the concept through: “Reorganization proceedings designed to rehabilitate viable businesses.”. It also mentions "Well-designed legal and regulatory frameworks with respect to insolvency and creditor/debtor rights (ICR) facilitate the extension of credit and enable private sector development".

'Insolvency Resolution Process' as defined in official Government Report(s)

Bankruptcy Law Reforms Committee (BLRC) Report (Nov 2015)

This government-commissioned report[46] lays out the concept of a time-bound insolvency resolution process as a foundational justification for the IBC.

IBBI — “Transforming Insolvency Resolution in India 2025”

A recent document[47] from IBBI describes India’s insolvency regime under the IBC. It consist of various papers which undertake different critic to different topics in the regime of IBC to provide a perspective of viewing such topics in different light.

International Experience

United Kingdom (UK)

In the United Kingdom, corporate insolvency and restructuring are primarily governed by the Insolvency Act 1986[48], the Enterprise Act 2002[49], and the Insolvency (England and Wales) Rules 2016[50], along with the Companies Act 2006 for schemes of arrangement and the newer restructuring plan under Part 26A.

The UK’s principal rescue mechanism is administration, a process designed to rescue the company as a going concern or provide better realisation than liquidation. Upon initiation, either through a court order or by a qualifying floating charge holder, an automatic moratorium takes effect, and an administrator assumes control of the company, replacing the directors. The administrator examines the financial position, prepares proposals within eight weeks, presents them to creditors, and seeks approval. Other important UK processes include the Company Voluntary Arrangement (CVA), which allows a binding compromise with creditors, as well as schemes of arrangement and restructuring plans, both court-driven tools increasingly used for complex restructurings and cross-border cases. Also, there are Scheme of Arrangement, a court-based compromise outside the Insolvency Act and the Restructuring Plan of Part 26A, Companies Act 2006, which was introduced in 2020 with cross-class cram-down, a legal mechanism in corporate restructuring that allows a court to approve a reorganisation plan even if a class of creditors votes against it.

United States of America (USA)

In the United States, insolvency resolution is regulated by the Bankruptcy Code under Title 11 of the United States Code[51], with Chapter 11 being the most important mechanism for corporate reorganisation. The main part of Chapter 11 is the debtor-in-possession (DIP) model, in which existing management continues to run the business under the oversight of the bankruptcy court and the US Trustee. Once a Chapter 11 petition is filed, an automatic stay instantly halts all creditor enforcement action. The debtor must submit a disclosure statement and a reorganisation plan outlining how claims will be addressed. Creditors vote on the plan by class, and the court confirms it if statutory requirements are met; a “cram-down” is possible even if some classes dissent. This highly flexible and court-supervised mechanism is widely used for complex, multi-jurisdictional restructurings.

Singapore

In Singapore, the modern restructuring regime is governed by the Insolvency, Restructuring and Dissolution Act (IRDA) 2020[52], which consolidated earlier laws and strengthened Singapore’s position as a regional restructuring hub. The key rescue mechanisms include schemes of arrangement, judicial management, and various moratorium provisions. Companies can apply for a court-sanctioned moratorium that may extend worldwide, protecting assets while a restructuring proposal is formulated. Under a scheme of arrangement, the company proposes a restructuring plan to creditors, divided into classes for voting. A 75% in value majority in each class is required, and the court may sanction the scheme even if some classes dissent through cross-class cram-down. Judicial management, akin to UK-style administration, involves appointing a judicial manager to run the company for the purpose of achieving a better restructuring outcome.

Technological Transformation and Initiatives

  • Digital case-management and e-filing platforms

Since 2016, India has moved to electronic case management and e-filing for insolvency proceedings. The NCLT operates an e-filing portal for corporate insolvency petitions and case tracking, while the IBBI hosts portals and dashboards for filing required forms and monitoring the performance of insolvency professionals and registered entities. These platforms increase transparency in case status.

  • Integrated technology platform (Policy initiative)[53]

To create an Integrated Technology Platform under IBC to unify case records, filings, registers and analytics across agencies, a move intended to make insolvency administration more efficient and interoperable with other government databases. This was discussed at the policy level and would centralize information flows between the adjudicating bodies, the IBBI and other registries.

  • Public registers, dashboards and data transparency

Publicly accessible case status pages, insolvency professional registries and IBBI dashboards provide structured data on ongoing proceedings, claims and outcomes. Making these data available supports academic research, creditor decision-making and regulatory oversight and is consistent with international best practices.

  • e-Auctions, digital asset sales and payment gateways

Many insolvency administrators have shifted auctions and asset sales online using secure e-auction platforms to widen bidder access and accelerate realisations. Coupling auctions with digital payment[54] and escrow mechanisms reduces friction, broadens buyer pools (including institutional and overseas buyers) and helps realise better recoveries for creditors.

  • Sectoral Initiatives - MSMEs, Startups and Fast-track processes

Sectoral-specific technological initiatives aim to adapt insolvency processes to the needs of micro, small and medium enterprises (MSMEs), startups and small corporates. These include fast-track or simplified electronic workflows, pre-pack mechanisms with standardized digital templates (PPIRP) and portals to submit and verify MSME registration/status. Such measures are intended to reduce cost and time for smaller debtors while preserving creditor protections.

References

  1. ↑ Insolvency and Bankruptcy Code, 2016, Part II, Chapter II, ss 6-32. Available at: https://www.indiacode.nic.in/bitstream/123456789/15479/1/the_insolvency_and_bankruptcy_code%2C_2016.pdf
  2. ↑ Insolvency and Bankruptcy Code, 2016, s 6. Available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&sectionId=785&sectionno=6&orderno=6&orgactid=AC_CEN_2_11_00055_201631_1517807328273
  3. ↑ Insolvency and Bankruptcy Code, 2016, ss 7-10, Available at: https://www.indiacode.nic.in/bitstream/123456789/15479/1/the_insolvency_and_bankruptcy_code%2C_2016.pdf
  4. ↑ Insolvency and Bankruptcy Code, 2016, s 12. Available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&sectionId=791&sectionno=12&orderno=14&orgactid=AC_CEN_2_11_00055_201631_1517807328273
  5. ↑ Insolvency and Bankruptcy Code, 2016, ss 13-14, Available at: https://www.indiacode.nic.in/bitstream/123456789/15479/1/the_insolvency_and_bankruptcy_code%2C_2016.pdf
  6. ↑ Insolvency and Bankruptcy Code, 2016, ss 16-21, pg 28-30. Available at: https://www.indiacode.nic.in/bitstream/123456789/15479/1/the_insolvency_and_bankruptcy_code%2C_2016.pdf
  7. ↑ Insolvency and Bankruptcy Code, 2016, ss 30-31 ,Available at:https://www.indiacode.nic.in/bitstream/123456789/15479/1/the_insolvency_and_bankruptcy_code%2C_2016.pdf
  8. ↑ Insolvency and Bankruptcy Code, 2016, s 55. Available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&sectionId=834&sectionno=55&orderno=77&orgactid=AC_CEN_2_11_00055_201631_1517807328273
  9. ↑ Insolvency and Bankruptcy Code, 2016, s 55. Available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&sectionId=834&sectionno=55&orderno=77&orgactid=AC_CEN_2_11_00055_201631_1517807328273
  10. ↑ Insolvency and Bankruptcy Code, 2016, s 56. Available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=78&orgactid=AC_CEN_2_11_00055_201631_1517807328273
  11. ↑ Insolvency and Bankruptcy Code, 2016, s 57. Available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=79&orgactid=AC_CEN_2_11_00055_201631_1517807328273
  12. ↑ Insolvency and Bankruptcy Code, 2016, s 58. Available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=80&orgactid=AC_CEN_2_11_00055_201631_1517807328273
  13. ↑ Insolvency and Bankruptcy Code, 2016, s 54A. Available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&sectionId=57216&sectionno=54A&orderno=61&orgactid=AC_CEN_2_11_00055_201631_1517807328273
  14. ↑ Insolvency and Bankruptcy Code, 2016, s 54D. Available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&sectionId=57219&sectionno=54D&orderno=64&orgactid=AC_CEN_2_11_00055_201631_1517807328273
  15. ↑ Insolvency and Bankruptcy Code, 2016, s 54K. Available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&sectionId=57226&sectionno=54K&orderno=71&orgactid=AC_CEN_2_11_00055_201631_1517807328273
  16. ↑ Insolvency and Bankruptcy Code, 2016, ss 78-97. Available at: https://www.indiacode.nic.in/bitstream/123456789/15479/1/the_insolvency_and_bankruptcy_code%2C_2016.pdf
  17. ↑ Insolvency and Bankruptcy Code, 2016, ss 94-120. Available at: https://www.indiacode.nic.in/bitstream/123456789/15479/1/the_insolvency_and_bankruptcy_code%2C_2016.pdf
  18. ↑ Insolvency and Bankruptcy Code, 2016, ss 121-178. Available at: https://www.indiacode.nic.in/bitstream/123456789/15479/1/the_insolvency_and_bankruptcy_code%2C_2016.pdf
  19. ↑ Insolvency and Bankruptcy Code, 2016, Part III, Available at: https://www.ibbi.gov.in/uploads/law/IBC%20Part%20III.pdf?
  20. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter II, ss. 6-32A, available at, https://www.indiacode.nic.in/handle/123456789/2154
  21. ↑ PART II - INSOLVENCY RESOLUTION AND LIQUIDATION FOR CORPORATE PERSONS https://www.ibbi.gov.in/uploads/law/IBC%20Part%20II.pdf
  22. ↑ Insolvency and Bankruptcy Code, 2016, Part II, Chapter II, s. 7. https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&sectionId=786&sectionno=7&orderno=7&orgactid=undefined
  23. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter II, s. 9, available at, https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=9&orgactid=undefined
  24. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter II, s. 10, available at, https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=10&orgactid=undefined
  25. ↑ The Insolvency and Bankruptcy Board of India (Insolvency Resolution For Corporate Persons) Regulations, 2016, Chapter V, Reg. 16, Pg No. 10, available at, https://ibbi.gov.in/webadmin/pdf/legalframwork/2018/Apr/word%20copy%20updated%20upto%2001.04.2018%20CIRP%20Regulations%202018_2018-04-11%2016:12:10.pdf
  26. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter IV, ss. 55-58, available at, https://www.indiacode.nic.in/handle/123456789/2154
  27. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter IV, s. 55(2), available at, https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=77&orgactid=undefined
  28. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter III, ss. 33-54, available at, https://www.indiacode.nic.in/handle/123456789/2154
  29. ↑ The Micro, Small and Medium Enterprises Development Act, 2006, Chapter III, s. 7, available at: https://www.indiacode.nic.in/bitstream/123456789/2013/3/A2006-27.pdf
  30. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter II, s. 29A, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&sectionId=49377&sectionno=29A&orderno=34&orgactid=undefined
  31. ↑ Ministry of Micro, Small and Medium Enterprises, "What is MSME?" (Government of India), available at:https://msme.gov.in/know-about-msme (last visited on November 25, 2025).
  32. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter III-A, s. 54C, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&sectionId=57218&sectionno=54C&orderno=63&orgactid=undefined
  33. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter III-A, s. 54D, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=64&orgactid=undefined
  34. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter III-A, s. 54E, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=65&orgactid=undefined
  35. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter III-A, s. 54F, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=66&orgactid=undefined
  36. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter III-A, s. 54G, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=67&orgactid=undefined
  37. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter III-A, s. 54H, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=68&orgactid=undefined
  38. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter III-A, s. 54-I, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=69&orgactid=undefined
  39. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter III-A, s. 54J, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=70&orgactid=undefined
  40. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter III-A, s. 54K, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=71&orgactid=undefined
  41. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter III-A, s. 54L, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=72&orgactid=undefined
  42. ↑ Insolvency and Bankruptcy Code, 2016, Part II, Chapter III-A, s. 54M, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=73&orgactid=undefined
  43. ↑ The Insolvency and Bankruptcy Code, 2016, Part II, Chapter III-A, s. 54N, available at: https://www.indiacode.nic.in/show-data?abv=CEN&statehandle=123456789/1362&actid=AC_CEN_2_11_00055_201631_1517807328273&orderno=74&orgactid=undefined
  44. ↑ United Nations Commission On International Trade Law, UNCITRAL Legislative Guide on Insolvency Law, Adoption Parts one and two, 25 June 2004; part three, 1 July 2010; part four, 18 July 2013, July 2019 (2nd. ed.); part five, 2021.https://uncitral.un.org/en/texts/insolvency/legislativeguides/insolvency_law
  45. ↑ The World Bank, PRINCIPLES FOR EFFECTIVE INSOLVENCY AND CREDITOR/DEBTOR REGIMES- Report of the Secretary General.https://documents1.worldbank.org/curated/en/518861467086038847/pdf/106399-WP-REVISED-PUBLIC-ICR-Principle-Final-Hyperlinks-revised-Latest.pdf
  46. ↑ Insolvency and Bankruptcy Board of India, “The report of the Bankruptcy Law Reforms Committee Volume I: Rationale and Design” (Nov, 2015). https://ibbi.gov.in/BLRCReportVol1_04112015.pdf?utm
  47. ↑ Insolvency and Bankruptcy Board of India, “Transforming Insolvency Resolution in India” (2025).https://ibbi.gov.in/uploads/whatsnew/9f9dc60d2f3d49b5ab5aed5dfad2ba1a.pdf?utm
  48. ↑ Insolvency Act 1986, https://www.legislation.gov.uk/ukpga/1986/45/contents
  49. ↑ The Enterprise Act 2002, https://www.legislation.gov.uk/ukpga/2002/40/contents
  50. ↑ The Insolvency (England and Wales) Rules 2016, https://www.legislation.gov.uk/uksi/2016/1024/contents
  51. ↑ Chapter 11 - Bankruptcy Basics US, https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics
  52. ↑ Insolvency, Restructuring and Dissolution Act (IRDA) 2020, https://sso.agc.gov.sg/Acts-Supp/39-2020/Published/20201207170000?DocDate=20201207170000
  53. ↑ Ministry of Corporate Affairs,“Year End Review-2024: Ministry of Corporate Affairs.”Available at: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2088711Accessed 25 Nov. 2025.
  54. ↑ Ravi Mital, “Digitalisation of IBC",https://ibbi.gov.in/uploads/resources/ffa2fc846853f7a25eaaa754dc305de9.pdf
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