Defaulter’s Paradise Lost – Demystifying the Insolvency and Bankruptcy Code, 2016” by Anant Merathia covers one of the most important economic legislations, The Insolvency and Bankruptcy Code, 2016 (IBC). The enactment is earmarked to be a gamechanger having impact in various spheres, be it for the country’s ease of doing business, promoting entrepreneurship, ensuring credit availability, legal professionals, industry, bankers, etc.
The six plus years of the said legislation has in fact changed the ground level in the adjudication and justice delivery system in so far as various stakeholders of the Corporate Insolvency Resolution Process are concerned. The other part of the legislation concerning personal insolvency is yet to see the light of day in entirety. The author of Defaulter’s Paradise Lost has undertaken painstaking efforts in bringing out the fundamentals of the law, its implementation, its functionality / operation and the manner in which Corporate Insolvency Resolution Process is carried out.
The book brings out the ances of the key stakeholders in the entire process. Defaulter’s Paradise Lost uses apt sub-titles in chapters such as “The Epitome of Austerity”, “The Lords of the Fortress”, “The Deputy Beneficiaries”, “The Nerve Centres of the Corporate Debtor”, “The Power Centre”, “The Anchors”, “The Unintended Creditors”, “The Common Sharers of Liability” and “The Saviours?” in order to highlight the different parameters, roles and the stakes which concern the stakeholders.
It places before the reader the various pros and cons in the actions, responsibilities, and obligations in respect of each of such stakeholder. A pre-emptive advisory is also provided to the promoters and personnel in management of the Corporate Debtor as to how to mitigate insolvency as well as the importance of extending their co-operation to facilitate a smooth corporate insolvency resolution. There are chapters which exclusively deal with Insolvency Professionals and Resolution Applicants. The necessity of these two key players in upholding the integrity of the corporate insolvency resolution process is highlighted by referring to the numerous judgements of the Adjudicating Authority, Appellate Authority as well as by relying on principles derived by the Hon’ble Supreme Court including that of the ‘Clean Slate Theory’. A debate is further ensued as to whether the legislation inclines towards resolution or liquidation in the processes set out by it.
Defaulter’s Paradise Lost further seeks to address the emerging trends in insolvency resolution, including the pre-packaged insolvency resolution and issues concerning the same. A much-anticipated insight has been given to the process relating to personal guarantors, which as on date is yet to take a complete shape. In the concluding chapters of the Book, the author and his team bring to the fore the evolution of the Code from its inception till date as well as the path to be paved ahead.
Defaulter’s Paradise Lost is an all-rounded, excellent reference guide on the subject loaded with various statistical data, illustrative diagrams and facts relating to corporates which have undergone the corporate insolvency resolution process. It makes it a point to be critical in areas which require to be set out, such as the unfortunate situation of the operational creditors, the big-brotherly conduct and attitude of financial creditors, and the roles which need to be played by independent stakeholders with credibility and accountability.
Pivotal case laws on the IBC have been referred and elucidated in brief and apt manner and such references are of immense help to the readers to better understand the various concepts that are covered. Every person who seeks to understand the IBC or looks forward to having a role in the same, be it legal professionals, insolvency professionals, bankers, other creditors, etc. ought to read Defaulter’s Paradise Lost. It will serve as a personal guide in understanding of IBC.
The author is a Senior Advocate at Madras High Court.