Insolvency and Bankruptcy Code Conflict with Special Statues

Abstract

The Government of India with its ambition to make doing business in India easier, enacted the Insolvency and Bankruptcy Code, 2016, an Umbrella legislation to deal with the bankruptcy and Insolvency of Companies, Individuals and Partnership. However, since the code tries to seize the laws regarding to insolvency and bankruptcy and the Supreme Court verdict that it's a complete code in itself creates an apparent conflict between IBC and SARFESI and Limitation Act. The author in this paper will deal with the various conflicts between IBC and Limitation Act and SARFESI, the inclination of judiciary while interpreting such conflict in past, challenges while interpreting two special statutes and will summarize the findings by giving a conclusion. I. INTRODUCTION After Independence, the Indian economy emerged as an agrarian economy and its initial Five- year plans were mainly focused upon the development of agriculture. However, in the year 1991, the country decided to liberalized its economy and opens the doors of economy for international organization.3 According to C. Rangarajan, the then Governor of Reserve Bank of India, "The new economic Policy comprises various policy measures and changes introduced since 1991. There is a common thread running through all these measures. The objective is simple and that is to improve the efficiency of the mechanism involving multitudes of controls, fragmented capacity and reduced competition even in the private sector".4 In order to facilitate the investment and make doing business easier, the Govt. brought in the recovery of debts due to banks and Financial Institution Act, 1993 (hereinafter referred as RDBFI) in order to establish tribunals for recovery of debt. Later in the year 2002, the Govt. enacted the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred as SARFESI),5 to provide a remedy to 1 Author is an Advocate at Delhi High Court, India. 2 Author is an Advocate at Delhi High Court, India. 3 One More Push, The Economist, 21/07/2011, https://www.economist.com/node/18988536 4 C. Rangarajan, Governor of RBI (1991), 'Comments on New Economic, Policy'. P.2. 5 Why is the sarfaesi act of critical importance to lenders, Dvara Trust, https://www.dvara.com/blog/20 2023. International Journal of Integrated Law Review