India: Insolvency/Bankruptcy/Re-Structuring

The jurisprudence surrounding corporate criminal liability and insider trading in India has undergone considerable doctrinal refinement, particularly in relation to the attribution of knowledge, the evidentiary threshold for establishing regulatory contraventions and the relevance of commercial intention in determining liability.

The Insolvency and Bankruptcy Code, 2016 (IBC) was originally built as a monolithic architecture. Its primary mandate was clear: when a company defaults, the entirety of its corporate entity must be pulled into the Corporate Insolvency Resolution Process (CIRP). While this unified entity approach worked seamlessly for manufacturing units or simple corporate structures, its application to the real estate sector triggered catastrophic systemic failures. In real estate, a single developer frequently manages dozens of independent housing projects across varying stages of lifecycle, funding, and construction.

Diverging creditor timelines are what turn one company’s cash shortfall into several separate fights at once. Once suppliers, lenders and a personal guarantor are each entitled to act on their own schedule, one creditor moving first can reshape what’s left for everyone else which is a worse situation than the funding gap that started it.

The Insolvency and Bankruptcy Code, 2016 (“IBC”) seeks to facilitate the resolution of insolvency, maximise the value of a corporate debtor’s assets and balance the interests of stakeholders. A central aspect of this framework is the identification and preservation of assets available for resolution or liquidation. However, the position becomes more complex when a corporate debtor holds assets acquired using foreign contributions regulated under the Foreign Contribution (Regulation) Act, 2010 (“FCRA”).

Ten years in, the Insolvency and Bankruptcy Code has finally been amended to close gaps that case law had quietly opened up in it. The IBC Amendment Act, 2026, in force from 26 May 2026, does three things that matter to anyone advising creditors: it takes the discretion back out of admission, it widens the window for clawing back value that left a company before insolvency was formally declared, and it hands financial creditors a new route into a distressed company that doesn't need a Section 7 petition at all. This piece walks through each change and the litigation that made it necessary.

The NCLT, New Delhi (Special Bench) vide order dated 25.08.2026 in Indiabulls Housing Finance Limited vs. Dr. Subash Chandra approved the repayment plan of INR 6.50 Crores submitted by the Personal Guarantor as against admitted claims of approximately INR 22,006.57 Crores.