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ANALYSIS OF GROUP INSOLVENCY IN INDIA

By Deepak Tiwari


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Abstract
In Salomon v. Salomon, for the first time the juristic personality of a company as a separate entity was recognised. Weighing upon that, the ruling also drew the corporate veil for determining the legal personality of the company. On lifting the corporate veil, it is to be understood in the present scenario that identification of group companies has become pragmatic in light of the rise of transnationalism.
The meaning of group insolvency pertains to the fact that corporate groups may involve associate, holding and subsidiary organizations to effectuate their conduct business; it is due to wider emancipation of the corporate groups in light of globalization led transnationalism, the need for determining the framework which may initiate and substantiate the insolvency proceedings of the corporate groups.
Various foreign instruments such as EU Regulations on Insolvency Proceedings and UNCITRAL Guide on Insolvency provides for framework of group insolvency in a global perspective. However various jurisdictions are yet in the process of realising the nuances attached to group insolvency. In that light, India with its codification of Insolvency and Bankruptcy Code, 2016 did not reflect on group insolvency. But with the emerging trends, the necessity to enact on the same has been realised. In 2019, a working group was established on Group Insolvency. This working group in its report has reflected upon the various contours of the group insolvency and have put efforts to provide a working mechanism pertaining to group insolvency in light of the rise of transnationalism.
This research article at first place delves deeper into exploring the meaning of group insolvency, as it is the evolving concept in a global spatial aspect. Secondly, it reflects on the comparative analysis of the group insolvency in light of the emerging efforts to recognise the same by different jurisdictions. Thirdly, it tries to understand the group insolvency in the context of India and explains the necessity to develop the jurisprudence on group insolvency. Fourthly, it analyses the working group report to understand the framework being provided in the report. Fifthly, it also reflects upon the judicial activism by undertaking case studies and the recent case laws decided by the courts in India. Lastly, it discusses the issues and challenges pertaining to the same.
Keywords
Group Insolvency, CIRP, Cross Border Insolvency, IBC, UNCITRAL.

TypeResearch Paper
InformationLex Humanitariae: Journal for a Change, Volume II issue IV, Pages 76-89
ISSN 2582-5216
Creative CommonsThis work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
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