Supreme Court Upholds Speed and Certainty in Insolvency Code

The Supreme Court recently reaffirmed the principles embedded within the Insolvency and Bankruptcy Code (IBC), 2016, emphasizing its role in fostering speed and certainty through creditor-driven decisions. The judgment highlighted potential misuse by unsuccessful bidders attempting to challenge commercial decisions as procedurally flawed.

The court's bench, comprising Justices B V Nagarathna and R Mahadevan, cautioned against expanding judicial review beyond the IBC's narrow boundaries, citing that undue delay can lead to a loss of economic value for stakeholders. The court underscored the IBC's aim to avoid protracted litigation by maintaining strict compliance and finality.

By instituting a creditor-driven process and curtailing excessive judicial intervention, the IBC marks a shift from a court-centric insolvency resolution model. This framework ensures that insolvency remains a predictable, market-driven process, preserving economic stability and realizing the IBC's core objectives.