New Delhi

Opposition members in the Lok Sabha on Wednesday criticised the implementation of the Insolvency and Bankruptcy Code (IBC), arguing that it has fallen short of its intended objectives due to delays and institutional limitations.

Taking part in a discussion on the Insolvency and Bankruptcy Code (Amendment) Bill, 2025—reintroduced following recommendations by a select committee—several MPs raised concerns over the effectiveness of the current framework.

Trinamool Congress leader Saugata Roy said both the executive and the judiciary have, in effect, weakened the insolvency resolution process. He pointed to the limited capacity of the National Company Law Tribunal (NCLT), which he said has contributed to prolonged case timelines.

Roy also expressed concern over what he described as gaps in the law dealing with fugitive offenders, suggesting that it has not been effective in addressing the issue.

Telugu Desam Party member D. Prasad Rao acknowledged delays in the resolution process but maintained that the proposed amendments could help speed up settlements.

Similarly, DMK MP K. Veeraswamy alleged that the insolvency mechanism is increasingly being used to strip companies of their assets by exploiting weaknesses in the system.

Several members highlighted persistent delays in tribunals as a key concern, noting that prolonged proceedings often lead to erosion in asset value and lower recoveries for creditors.

The government, meanwhile, has been working to address structural challenges within the insolvency framework, including delays in resolution and liquidation, capacity constraints at tribunals, and relatively low recovery rates.

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The select committee’s recommendations aim to tackle these issues by streamlining processes and improving the efficiency of the resolution mechanism.