Legislation: Intent and interpretation

Interpreting the margins at the cost of core legislation could be costly for the economy

The Insolvency and Bankruptcy Code (IBC), 2016, is founded on the basic principles of economics. Default is an outcome of market forces and it must be resolved by the market. The IBC, therefore, provides for a corporate insolvency resolution process (CIRP) to rescue a corporate debtor (CD) in default, or close it, as the market considers expedient. This includes initiating the CIRP. It is the market that takes the call whether to initiate the CIRP in case a CD defaults, considering the reasons for its default, the options available to deal with the default, the feasibility and viability of the