In India, many acts were enacted to deal with the issue of debt defaults. The recovery actions of creditors, such as the Contract Act and many special laws such as Recovery of Debts Institutions Act, 1993 and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 came into force without bringing desired outcomes. However, the Companies Act, 2013 have not been able to aid the recovery of debts from the debtors.

Finally, the Insolvency and Bankruptcy Code (IBC), was enacted on the year 2016 which is one of the biggest economic reform to tackle Non-Performing Assets (NPA), a problem that has been pulling the Indian economy down for years. The mounting NPAs in banking sector and other financial institutions has severely damaged the lending activities of financial institutions in India, more so by public sector banks. 

The main objective of the law was to promote availability of credit, balance the interests of all stakeholders and the code is basically for the reorganization and insolvency resolution of any corporate company, partnership firms and other entities for the maximization of the value of assets of such person in a specific time bound manner. The code consists of a new institutional framework consisting of a regulator, insolvency professionals and adjudicatory mechanisms which helps in facilitating the Insolvency Resolution Process (IRP) and liquidation.

The Insolvency Resolution Process (IRP) is a process under the IBC, where the National Company Law Tribunal (NCLT) initiates a Corporate Insolvency Resolution Process (CIRP) when a company or a corporate debtor defaults to pay the creditors. An IRP can be initiated if there will be a minimum default of Rs. 1,00,000/- of creditors debt by the debtor. The Financial creditor can file an application under Section 7 of the IBC and the operational creditor can file an application under Section 9 of IBC before the NCLT of their relevant jurisdiction.

Liquidation takes place basically, when the company or corporates become insolvent and cannot pay of the debts to their respective claimants. The process of liquidation is enabled by distributing the assets or inventory of a corporate firm or enterprise at a low or discounted price to generate cash and payoff the creditors. The assets during the period of liquidation are distributed in many orders:

1. Creditors can receive the full debt rather than the collateral value
2. government dues will be repaid after unsecured creditors
3. unsecured creditors have priority over trade creditors. 

The procedure of liquidation generates when the IRP fails or the financial creditors decide to wind down and sale the assets of the debtor in the order of liquidation preference prescribed under IBC.

The advantage of this Code, provides a uniform platform overseeing all the issues of debt recovery by the process of IRP and liquidation. It empowers the creditors by reaching a resolution and getting them paid easily, the Code is meant to make sure that the creditor gets paid-either through liquidation or resolution. The main reason for the enactment of the Code was to speed-up the process of long insolvency in a specific time provided in the Code which is 180 days and extension of 90 days.

However, the Code is providing an immense strategy of investing in India as because it hopes for faster recovery and lesser defaults which are nevertheless, faced by the investor. Many foreign investor are seeking India as a legible place of investing the basic reasons are that the foreign investor can now employ a flexible exist strategy and attention can be drawn to the start-ups that are likely to succeed.

Thus, the new Code could curb substantially the number of long-pending cases and also ensure quicker resolution of NPA problems of banks. On the other hand, the IBC is too business minded and thus compromise the morality with the natural justice.

The time period for the resolution of insolvency which is to be praised within a small stipulated time, it might not be enough for the valuation of the insolvent assets. Most of the time liquidation generally deemed to be unsuccessful where the welfare of the debtor is to be considered whereas the liquidation is often only the course of action.

The IBC seems to be backed by a strong structure and framework in the Indian Economy resolution. Overall the enactment of this Code made a huge step for a country like India towards the ease of doing business and creates a potential for the foreign investors to bring business practices within the boundaries for a long period of time. Moreover, the code provides a separate authority and jurisdiction for the corporates or the companies to resolve the matters.

The Code is being continuously evolved by the government for its betterment. The scenario of resolution is now being changed completely by removing the distress of finance in the country. IBC also sets methods for working with defaulting borrowers in order to better enable the borrower to meet their financial obligation. Thus, the IBC in all together proves to be boon for the country.