CIRP: More of Liquidation and Less of Resolution

The Insolvency and Bankruptcy Code 2016 has been enacted to ensure healthy credit flow and generation of new capital assets and a procedure known as Corporate Insolvency Resolution Process (CIRP) has been introduced to collect the defaulted loans from the corporate debtors. However the main aim of IBC and the whole process of CIRP being resolution, it is ending in liquidation in most of the cases when it comes to reality. So this article explains what is CIRP process and how it works and statistics showing that liquidation is happening in reality in most of the times than resolution which is the key background for enacting IBC and mainly focuses on the reasons behind failure of resolution process and explained key judicial pronouncements, recommendations and suggestions by various experts to overcome this problem of high liquidation – low resolution. So By identifying all the reasons behind failure of resolution process and by considering all the recommendations and suggestions mentioned in this article, adjudicating authorities and insolvency professionals must try to resolve the cases by way of resolution which is the main aim of CIRP procedure in IBC.