Focused on enforcement over fresh ideas, the IBC amendment Bill seeks to cut delays, curb conflicts of interest and bring greater certainty to insolvency resolutions
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The recent report of the parliamentary select committee on the Insolvency and Bankruptcy Code (IBC) Amendment Bill, dated December 16, 2025, has taken several steps forward to address issues that have plagued the implementation of the Code so far. The most important suggestion is to address delays at the level of the adjudicating authority more proactively, while also recommending stricter guardrails for resolution professionals to avoid any loss of integrity. Experts feel that the real focus of the Bill, as well as the committee’s report, is not on new principles but on better and faster enforcement, so that the resolved company gets a clean, fresh start.
“The Ministry of Corporate Affairs (MCA) is trying to reduce the scope for obstruction through stricter timelines, penalties and a structured process so that resolution becomes predictable, and the resolved company is able to move forward without old claims and lingering government actions. The implication is that insolvency will be like a disciplined process, not prolonged litigation,” said Vijay K Singh, senior partner at S&A Law Offices.
While the Ministry of Corporate Affairs has provided several clarifications on interpretational issues in the proposed Bill, industry stakeholders feel that certain provisions require greater clarity.
“The select committee’s examination of the IBC Amendment Bill has brought some much-needed clarity from the MCA on long-debated issues, particularly around strengthening the role and accountability of insolvency professionals, refining the framework for avoidance transactions, and providing greater procedural certainty in group insolvencies and fast-track processes,” Aditya Bhattacharya, partner, King Stubb & Kasiva, Advocates and Attorneys, said.
Bhattacharya, however, added that the proposed amendments run the risk of over-regulation of insolvency professionals, which could potentially impact efficiency.
The parliamentary panel has suggested that the Bill be revised to include a provision that would bar a resolution professional (RP) from becoming the liquidator.
The Bill had proposed a change in the process of appointing a liquidator from the existing automatic appointment to one based on the proposal and approval of the committee of creditors. This was done to address a potential “perverse incentive” for the RP to favour liquidation over resolution to secure additional fees, as the liquidator’s remuneration is often a percentage of the liquidation estate, unlike the RP’s fixed monthly salary.
An explanation added to Section 18(b) by the Amendment Bill also states that the resolution professional, while collating claims, shall verify them and, if required, determine the value of “such verified claims”.
“The RP presently admits claims based on information received by him. He cannot reject or accept any claim based on his own determination. The amendment, in its present form, indicates otherwise. Accordingly, clarification is required on whether the intent of the legislature is to actually provide him with such adjudicatory powers,” Siddharth Srivastava, partner at Khaitan & Co, said.
Experts feel that the treatment of statutory and government dues requires more clarity. The Bill has proposed an amendment to clarify the original legislative intent of giving government dues a lower order of priority and not creating a new hierarchy for them.
The MCA has assured the committee that the revenue loss to the government on account of tax that has been collected or deducted at source by the corporate debtor but has not been deposited with the Central Government will be taken care of while formulating the regulations.
The committee suggested further amendments after noting that there could be an interpretational conflict in cases where government dues are to be treated as secured interest due to an agreement between parties.
IBC experts also said that the transfer of assets of the corporate guarantor or personal guarantor under Section 28A requires more procedural clarity on valuation and eligibility.
“The envisaged provision stipulates the transfer of assets of one entity into the CIRP of another entity but provides no clarity on how such transfer will happen, in what way resolution of such assets will take place, how this will impact realisation for secured creditors of the corporate or personal guarantor, or whether this could jeopardise the CIRP or personal insolvency process of the respective guarantor,” Srivastava added.
In the report tabled in Parliament on December 16, 2025, the Baijayant Panda-led committee noted that the Amendment Bill had failed to introduce any specific statutory timelines for the National Company Law Appellate Tribunal (NCLAT), while suggesting the introduction of a clear statutory timeline for the appellate tribunal.
The panel has said that the Bill be revised to include a new clause stipulating that the NCLAT shall dispose of an appeal within three months from the date of its receipt.
While some IBC experts felt that the report stops short of fully addressing systemic delays arising from judicial capacity constraints, which continue to affect the efficacy of the IBC in practice, others noted that the committee has brought these matters to the attention of the government.
“The report flags unresolved issues such as the lack of timelines for NCLAT appeals, limited scope for early settlements, and shortages of benches and heavy pendency at the National Company Law Tribunal (NCLT) and the NCLAT, which could still delay resolution despite tighter timelines,” Yash Vardhan, associate partner, IndiaLaw LLP, said.m
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