Abstract:

The Insolvency and Bankruptcy Code, 2016 (IBC) has transformed India's insolvency regime by establishing a comprehensive framework for time-bound insolvency resolution, value maximisation and protection of stakeholder interests. Among its most significant provisions are the avoidance transaction mechanisms contained in Sections 43–51 and Section 66 of the Code, which seek to prevent preferential, undervalued, extortionate credit and fraudulent transactions that diminish the value of the corporate debtor prior to the commencement of insolvency proceedings. These provisions are intended to preserve the debtor's assets, ensure equitable distribution among creditors and maintain the integrity of the Corporate Insolvency Resolution Process (CIRP).

This paper comparatively analyses India's avoidance transaction framework with the insolvency laws of the United States, the United Kingdom, Singapore and Germany. It evaluates the strengths and limitations of each jurisdiction in terms of legislative design, institutional efficiency, investigative powers and judicial implementation. The study argues that although India's statutory framework is comprehensive, practical challenges such as delays in adjudication, limited forensic capacity, inconsistent judicial interpretation and prolonged litigation reduce its effectiveness in maximising creditor recoveries.

Based on comparative analysis, the paper recommends reforms including specialised insolvency benches, time-bound adjudication of avoidance applications, enhanced investigative powers for Resolution Professionals, AI-assisted forensic analysis and greater harmonisation with international best practices. It concludes that strengthening avoidance transaction provisions is essential for improving creditor confidence, promoting responsible corporate governance and supporting the broader vision of Viksit Bharat 2047, which envisages a resilient, transparent and globally competitive economy.

Keywords:

Insolvency and Bankruptcy Code, Avoidance Transactions, Creditor Recoveries, Comparative Insolvency Law, Corporate Insolvency Resolution Process, Viksit Bharat 2047.

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