Beyond the Tribunal: Evaluating the Creditor-Initiated Insolvency Resolution Process (CIIRP) as an Out-of-Court Mechanism under IBC Amendment Act, 2026
Year: 2026
Type: article
Abstract: The Insolvency and Bankruptcy Code (Amendment) Act, 2026 introduces the Creditor-Initiated Insolvency Resolution Process (CIIRP) under the new Chapter IV-A, marking a paradigm shift from the tribunal-centric Corporate Insolvency Resolution Process (CIRP). Designed as a hybrid, out-of-court mechanism, CIIRP empowers notified classes of financial creditors upon 51% approval by value and after serving a 30-day notice to the corporate debtor to initiate resolution with minimal upfront judicial intervention. It adopts a debtor-in possession model with Resolution Professional oversight, a structured 150-day timeline (extendable by 45 days), moratorium provisions, and seamless conversion to CIRP upon failure or necessity. This paper critically evaluates CIIRP's efficacy as an expedited, creditor-led alternative aimed at early intervention, value preservation, and reduced litigation burden on the Adjudicating Authority. Through doctrinal, comparative, and empirical lenses, it assesses key features including creditor thresholds, debtor representations, CoC oversight, and safeguards against misuse. The analysis highlights potential advantages in speed and commercial autonomy alongside challenges relating to power imbalances, implementation risks for mid-sized entities, and interface with existing IBC processes. Findings underscore CIIRP's transformative potential in fostering timely resolutions for genuine business distress while reinforcing creditor discipline. The study offers targeted recommendations for regulatory fine-tuning to optimize outcomes under the evolving Indian insolvency ecosystem.
Authors: Damaraju Pradeep Kumar, Dr. Rajbir Kumar
Institution: Shri Venkateshwara University
Language: English
Subfield: Law
Field: Social Sciences
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W7212374873