Operational Creditors – The ‘Outcast’ of Insolvency and Bankruptcy Code

The purpose of this study is to understand how the recent developments under Insolvency and Bankruptcy Code, 2016 have become a reason of worry for micro, small and medium scale operational creditors. The code was introduced with a primary objective of providing a quick and timely resolution to insolvency crisis. This was meant to ensure the continuous availability of credit in the market. However, the code is slowly shaping up to be an oppressive legislation, discriminating against a vulnerable section of the economy, i.e., Operational Creditors. This paper will critically analyse the legislator’s objectives in introducing this legislation, their thought behind creating a separate class of operational creditors, and the need which has arisen to protect the operational creditors. This paper will also analyse the hon’ble Supreme Court judgements which have upheld the higher pedestal that has been awarded to the financial creditors. The legislators have recognised the need to protect the operational creditors and have taken certain steps to protect them as well. However, the adequacy of protection awarded by these steps is questionable. This paper will also critically analyse how these steps may prove to be fruitless in protecting the operational creditors