The Insolvency and Bankruptcy Code (IBC) 2016 is a landmark legislation that introduced a a comprehensive framework for resolving insolvency and bankruptcy cases in India. However, since its implementation, there have been several concerns raised about the level of obscurity in the code, particularly about the application of its provisions and the role of various stakeholders in the resolution process.

This research paper critically analyses the concept of obscurity in the IBC 2016 and its impact on the resolution process. The paper begins by defining obscurity and identifying the areas of the code where it is most prevalent. It then delves into the reasons for the obscurity, including the lack of clarity in the code's language, inadequate judicial interpretation, and the conflicting interests of stakeholders.

The paper also highlights the consequences of obscurity, such as delays in the resolution process, increased litigation, and the risk of non-uniformity in decisions. To address these concerns, the paper proposes measures such as improving the drafting of the code, enhancing judicial training, and encouraging stakeholder collaboration.

In conclusion, the research paper emphasizes the need for greater clarity and transparency in the IBC 2016 to ensure a smooth and efficient resolution process. Finally, the paper proposes measures to address the concerns raised and concludes by emphasizing the need for greater clarity and transparency in the IBC 2016.

Introduction:
The Insolvency and Bankruptcy Code (IBC) 2016 was enacted to revolutionize India's insolvency and bankruptcy regime. The code brought about a significant change by streamlining the process for the resolution of insolvency cases, ensuring a time-bound process and maximizing the value of assets. However, despite the code's laudable objectives, there have been several concerns raised about the level of obscurity in its provisions.

The concept of obscurity refers to the lack of clarity or transparency in the application of the code's provisions. There are several reasons for obscurity in the IBC 2016, including the complexity of the insolvency process, the lack of clarity in the language used in the code, the inadequacy of judicial interpretation, and the conflicting interests of various stakeholders involved in the resolution process.

The obscurity in the IBC 2016 has several implications, such as increased litigation, delays in the resolution process, and the risk of non-uniformity in decisions. The lack of clarity in the code's provisions have resulted in a significant number of cases being litigated, leading to a backlog in the resolution process. The time-bound nature of the IBC 2016 has been severely impacted, leading to a delay in the resolution process, which goes against the code's objective of time-bound resolution.

Defining Obscurity in Insolvency and Bankruptcy Code 2016
Obscurity in the context of the Insolvency and Bankruptcy Code (IBC) 2016 refers to the lack of clarity or transparency in the application of its provisions. This can manifest in several ways, such as ambiguity in the language used in the code, conflicting interpretations of its provisions by various stakeholders, and inadequate judicial interpretation.

Obscurity can also arise from the complexity of the insolvency resolution process, which involves several stakeholders with varying interests and responsibilities. The lack of clarity and transparency in the code's provisions can lead to a lack of predictability in the resolution process, resulting in delays and increased litigation.

Obscurity in the IBC 2016 can have significant implications for the insolvency resolution process, such as impeding the efficient and timely resolution of cases, increasing the cost of resolution, and impacting the confidence of investors in the insolvency regime. Therefore, it is essential to address the issue of obscurity in the IBC 2016 to ensure a transparent and predictable resolution process that is in line with the code's objectives.

Areas of Obscurity in Insolvency and Bankruptcy Code 2016
Obscurity in the Insolvency and Bankruptcy Code (IBC) 2016 can be observed in several areas of the code.

The following are some of the areas where obscurity is most prevalent:

1. Eligibility Criteria for Resolution Applicants:
   The code sets out the eligibility criteria for resolution applicants, which are often subject to different interpretations by stakeholders, leading to ambiguity and uncertainty.
    
2. Operational Creditors:
   The IBC 2016 recognizes the rights of operational creditors, but the code's provisions relating to their rights and remedies are unclear, leading to inconsistent treatment by tribunals and courts.3. Liquidation Process: The code provides for a liquidation process as a last resort when no the resolution plan is feasible. However, the code's provisions relating to the liquidation process are ambiguous and lack clarity on several issues, such as the distribution of assets and the priority of creditors.
    
3. Cross-border Insolvency:
   The IBC 2016 includes provisions for cross-border insolvency, but these provisions are not clear, and there is a lack of clarity on the extent of cooperation and coordination between Indian and foreign insolvency authorities.
    
4. Committee of Creditors:
   The Committee of Creditors (CoC) plays a critical role in the resolution process, but the code's provisions relating to the CoC's powers and functions are not clear, leading to confusion and inconsistency in decision-making.
    
5. Priority of Claims:
   The code sets out the order of priority of claims of various creditors, but the code's provisions on this issue are ambiguous, leading to conflicting interpretations and inconsistent treatment by tribunals and courts.
    
6. The Situation of Home Buyers:
   One of the most prominent issues in the IBC regime is whether home buyers are financial creditors. This was first raised in Nikhil Mehta and Sons v. AMR Infrastructure (2017) 1, where the NCLAT overturned the NCLT's ruling that Home Buyers did not constitute 'Financial Creditors' because, despite the element of TVM, it appears to be a simple agreement of sale and purchase of a piece of property. The NCLAT determined that the NCLT failed to recognise the nature of the transaction in that case, in which the home buyers were promised "monthly committed returns," which have the the commercial effect of borrowing.
   
   The Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, was then passed by the Indian Parliament, which added an explanation to Section 5(8)(f) of the Code, stating that any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of borrowing. The Supreme Court upheld this amendment in Pioneer Urban Land and Infrastructure Limited and Anr. v. Union of India (2019) 2. Addressing the obscurity in these areas is critical to ensure an efficient and effective insolvency resolution process that is in line with the code's objectives.
    
7. Whether a Resolution Plan can propose liquidation of the corporate debtor:
   Under the Code, liquidation is only meant as a last resort for the recovery of debts in cases where the insolvency resolution of the corporate debtor fails for reasons specified in Section 33(1). Liquidation where only one part of the corporate debtor's business is liquidated and not the entire corporate entity may be permitted because the Regulations state that the plan may provide for the sale of the corporate debtor's assets or even a restructuring of the company or an amendment to its constitutional documents. In the case of Industrial Services v. Burn Standard Company and Anr. (2018) 3, the National Company Law Appellate Tribunal distinguished between liquidation and corporate debtor closure. Thus, while closure means the end of the company, the liquidation of a portion of the corporate debtor's business may not.

How do Customer Rights remain in the grey area?
The Insolvency and Bankruptcy Code (IBC) 2016 aims to protect the rights of all stakeholders, including customers of insolvent companies. However, the implementation of customer rights under the IBC remains in a grey area, and case laws have further complicated the matter. The IBC provides for the appointment of an interim resolution professional (IRP) or resolution professional (RP) to manage the affairs of the insolvent company during the insolvency resolution process. However, there is no specific provision in the code that addresses the rights of customers of the insolvent company. This has resulted in uncertainty about how customer rights are protected during the insolvency resolution process.

In the case of Innoventive Industries Ltd. v. ICICI Bank & Anr 4, the National Company Law Appellate Tribunal (NCLAT) held that the interests of operational creditors, including customers, must be considered during the insolvency resolution process. The NCLAT observed that the IBC aimed to protect the interests of all stakeholders, and the IRP/RP must ensure that the interests of operational creditors, including customers, are protected.

However, in the case of State Bank of India v. Videocon Industries Limited 5, the Supreme Court held that the rights of customers under the IBC are limited to the extent of the security interest held by them. The court observed that customers who had paid for goods or services that were yet to be delivered had no right to claim those goods or services as their property, and their claims were limited to the extent of their security interest.

The conflicting decisions in these cases have further added to the confusion regarding customer rights under the IBC. The lack of clarity on this issue has led to delays in the resolution process and has resulted in customers losing their investments or being left with unresolved claims. To address this issue, there is a need for a clear framework that outlines the rights of customers during the insolvency resolution process.

The framework should ensure that customer rights are protected, and their claims are given due consideration in the resolution process. This would promote the confidence of customers in the insolvency resolution process and contribute to the the overall success of the IBC.

Reasons for Obscurity in Insolvency and Bankruptcy Code 2016:
The Insolvency and Bankruptcy Code (IBC) 2016 was enacted to provide a comprehensive legal framework for the timely resolution of insolvency cases in India. However, the code has been criticized for its obscurity and lack of clarity, which has led to delays, increased litigation, and a lack of confidence in the insolvency resolution process.

The following are some of the reasons for obscurity in the IBC 2016:

1. Lack of Clarity in the Code's Provisions:
   The language used in the code's provisions is often vague and ambiguous, leaving room for multiple interpretations and leading to confusion among stakeholders.
    
2. Complex Insolvency Resolution Process:
   The insolvency resolution process involves several stakeholders with varying interests and responsibilities, making it challenging to ensure transparency and consistency in decision-making.
    
3. Limited Judicial Interpretation:
4. The IBC 2016 is a relatively new law, and there is limited judicial interpretation of its provisions, leading to a lack of clarity on several issues.
    
5. Limited Clarity on Cross-border Insolvency:
   The provisions relating to cross-border insolvency in the IBC 2016 is not clear, leading to uncertainty and inconsistency in the treatment of cross-border cases.
    
6. Insufficient Infrastructure:
   The effective implementation of the IBC 2016 requires a robust infrastructure, including specialized tribunals, qualified insolvency professionals, and a database of insolvency cases. However, the infrastructure has been slow to develop, leading to delays and inefficiencies in the resolution process.
    
7. Lack of Standardization:
   The IBC 2016 does not provide for standardized processes or procedures, leading to inconsistent treatment of cases and increased litigation. Addressing these reasons for obscurity in the IBC 2016 is essential to ensure a transparent and predictable insolvency resolution process that is in line with the code's objectives.

The Impact of Obscurity on the Insolvency Resolution Process:
Obscurity in the Insolvency and Bankruptcy Code (IBC) 2016 can have a significant impact on the insolvency resolution process.

The following are some of how obscurity can impact the process:

1. Delay in Resolving Insolvency Cases:
   Obscurity in the code's provisions can lead to increased litigation, delays in decision-making, and a lack of confidence in the insolvency resolution process. This, in turn, can result in delays in resolving insolvency cases, leading to economic losses for all stakeholders
    
2. Inconsistent Treatment of Creditors:
   The lack of clarity in the code's provisions can lead to inconsistent treatment of creditors, leading to dissatisfaction among stakeholders and a lack of confidence in the insolvency resolution process.
    
3. Increased Litigation:
   The obscurity in the IBC 2016 can lead to increased litigation, as stakeholders seek clarification on the code's provisions, leading to delays in the resolution process and increased costs.
    
4. Uncertainty for Resolution Applicants:
   The ambiguity in the code's provisions can lead to uncertainty for resolution applicants, making it challenging for them to assess the risks and benefits of participating in the insolvency resolution process.
    
5. Lack of Predictability:
   Obscurity in the IBC 2016 can lead to a lack of predictability in the insolvency resolution process, making it challenging for stakeholders to plan and allocate resources effectively.
    
6. Loss of Confidence in the Insolvency System:
   The Impact of Obscurity on the Insolvency resolution process can lead to a loss of confidence in the insolvency system, reducing the effectiveness of the code's objectives and undermining the goal of promoting economic growth through efficient insolvency resolution.

Addressing the obscurity in the IBC 2016 is critical to ensure an efficient and effective insolvency resolution process that promotes economic growth and protects the interests of all stakeholders.

Consequences of Obscurity in Insolvency and Bankruptcy Code 2016
The obscurity in the Insolvency and Bankruptcy Code (IBC) 2016 can have several consequences, as it creates confusion and leads to a lack of clarity in the insolvency resolution process.

The following are some of the consequences of obscurity in the IBC, with relevant case laws:

1. Delay in Resolving Insolvency Cases:
   The lack of clarity in the code's provisions can lead to delays in the insolvency resolution process. The case of Lokhandwala Kataria Construction Pvt. Ltd. v. Nisus Finance and Investment Managers LLP 6 highlights how the lack of clarity in the IBC provisions led to prolonged litigation and delayed the resolution process.
    
2. Inconsistent Treatment of Creditors:
   The ambiguity in the code's provisions can lead to inconsistent treatment of creditors, leading to dissatisfaction among stakeholders. The case of Swiss Ribbons Pvt. Ltd. & Anr v. Union of India & Ors 7. emphasizes that the code must ensure the equal treatment of all creditors.
    
3. Increased Litigation:
   Obscurity in the IBC provisions can lead to increased litigation, as stakeholders seek clarification on the code's provisions, leading to delays in the resolution process and increased costs. The case of K. Sashidhar v. Indian Overseas Bank & Ors 8 highlights how the lack of clarity in the IBC provisions led to increased litigation, resulting in further delays in the resolution process.
    
4. Uncertainty for Resolution Applicants:
   The lack of clarity in the IBC provisions can lead to uncertainty for resolution applicants, making it challenging for them to assess the risks and benefits of participating in the insolvency resolution process. The case of the Committee of Creditors of Amtek Auto Ltd. v. Dinkar T. Venkatasubramanian 9 highlights how the lack of clarity in the IBC provisions resulted in uncertainty for resolution applicants.
    
5. Loss of Confidence in the Insolvency System:
   The Impact of Obscurity on the Insolvency resolution process can lead to a loss of confidence in the insolvency system, reducing the effectiveness of the code's objectives and undermining the goal of promoting economic growth through efficient insolvency resolution. The case of Swiss Ribbons Pvt. Ltd. & Anr v. Union of India & Ors emphasizes the importance of a clear and predictable insolvency resolution process to promote economic growth.

In conclusion, the consequences of obscurity in the IBC can have far-reaching impacts on the insolvency resolution process, leading to delays, inconsistent treatment of creditors, increased litigation, uncertainty for resolution applicants, and a loss of confidence in the insolvency system. The case laws discussed above highlight the need for a clear and predictable framework that ensures the equal treatment of all stakeholders and promotes economic growth through efficient insolvency resolution.

Measures to be taken:
To address the issue of obscurity in the Insolvency and Bankruptcy Code (IBC) 2016, several measures can be taken, including:

1. Regular Review and Amendment:
   The IBC must undergo regular review and amendment to ensure that the provisions remain relevant and effective in addressing the challenges of the insolvency resolution process. The government can establish a committee to review the IBC's provisions and make recommendations for necessary amendments
    
2. Clear Definition of Key Terms:
   The IBC must provide a clear definition of key terms used in the code to avoid ambiguity and ensure uniform interpretation. For example, the term "financial creditor" should be defined clearly to avoid confusion.
    
3. Consistent Interpretation of Provisions:
   The Insolvency and Bankruptcy Board of India (IBBI) should provide consistent interpretation of the IBC provisions through guidelines and clarifications. This will ensure that stakeholders have a clear understanding of the code's provisions and avoid any misinterpretation.
    
4. Increased Awareness and Training:
   The government and the IBBI can conduct training and awareness programs for stakeholders, including insolvency professionals, resolution applicants, and creditors, to increase their understanding of the IBC provisions and their role in the insolvency resolution process.
    
5. Fast-Track Mechanism for Resolving Ambiguity:
   The IBC can establish a fast-track the mechanism for resolving ambiguity in the code's provisions to avoid delays in the resolution process. This can be done through the establishment of a committee comprising experts from various fields to resolve disputes quickly.

Conclusion:
The Insolvency and Bankruptcy Code (IBC) 2016 is a significant step towards streamlining the insolvency resolution process in India. However, the issue of obscurity in the code's provisions has raised concerns among stakeholders, creating ambiguity and leading to delays in the resolution process.

The consequences of obscurity in the IBC can be severe, leading to adverse effects on the economy and the interests of the stakeholders involved. The lack of clarity in the code's provisions can also result in legal disputes, further delaying the resolution process.

To address this issue, measures such as regular review and amendment, clear definitions of key terms, consistent interpretation of provisions, increased awareness and training, fast-track mechanisms for resolving ambiguity and reliance on judicial precedents can be implemented. By ensuring clarity and transparency in the IBC's provisions, stakeholders can have confidence in the insolvency resolution process.

This will result in efficient and timely resolution of insolvency cases, promoting economic growth, and protecting the interests of all stakeholders involved. Therefore, the government and the Insolvency and Bankruptcy Board of India must take necessary steps to address the issue of obscurity in the IBC 2016, ensuring that the code remains relevant and effective in addressing the challenges of the insolvency resolution process.

References:

1. Nikhil Mehta and Sons v. AMR Infrastructure CA-811(PB)/2018 in CP No. (IB)-02(PB)/2017
2. Pioneer Urban Land and Infrastructure Limited and Anr. v. Union of India WRIT PETITION (CIVIL) NO. 43 OF 2019
3. Industrial Services v. Burn Standard Company and Anr. CA. No. 170/KB/2018 in C.P. (IB) No. 244/KB/2017
4. Innoventive Industries Ltd. v. ICICI Bank & Anr C.P. No. 1/I&BP/NCLT/MB/MAH/2016)
5. State Bank of India v. Videocon Industries Limited MA 1306/2018 in CP No. 02/2018
6. Lokhandwala Kataria Construction Pvt. Ltd. v. Nisus Finance and Investment Managers LLP Civil Appeal No. 9279 of 2017
7. Swiss Ribbons Pvt. Ltd. & Anr v. Union of India & Ors (2015) 8 SCC 583
8. K. Sashidhar v. Indian Overseas Bank & Ors [2019] ibclaw.in 08 SC
9. Amtek Auto Ltd. v. Dinkar T. Venkatasubramanian [2019] ibclaw.in 12 NCLAT