Chennai | July 12, 2025
In a candid and sharp critique that reflects his signature judicial clarity, Justice N. Anand Venkatesh of the Madras High Court has offered a powerful reflection on the Insolvency and Bankruptcy Code, 2016 (IBC) — not as a statutory monolith, but as a living framework, currently burdened with procedural bottlenecks and institutional fragility.
Delivering a keynote titled “The Working of the IBC – Some Thoughts and Reflections”, Justice Venkatesh departed from the usual formal praise and instead took the legal fraternity into the trenches of how the Code is functioning on the ground or rather, how it’s often not functioning as intended.
IBC: The Law That Moved, But Got Stuck Midway
When introduced in 2016, the IBC was seen as a bold move to speed up the process of resolving corporate insolvencies and revive distressed assets. However, Justice Venkatesh’s address pointed out that the spirit of the Code is at risk of being choked by its machinery.
He described the IBC not as a broken law, but as one caught in a mismatch between ambition and implementation. According to him, “There is no crisis in the Code. The crisis lies in the system tasked with applying it.”
Key Issues Raised:
1. Tribunal Shortcomings – NCLT & NCLAT Underperforming
Justice Venkatesh observed that National Company Law Tribunals (NCLTs) are structurally weak. Their benches are often composed of individuals lacking either corporate legal background or financial expertise — leading to delays, inconsistent rulings, and poor handling of complex financial matters.
2. Registry Dysfunction – When Listing Becomes Lottery
He critically examined the opaque nature of case listings in the tribunals. In his words, “Urgency is not decided by urgency. It’s decided by access.” A veiled yet sharp jab at how registry-level decisions affect the pace of justice, especially when priority cases get no timely listing due to outdated systems and informal controls.
3. Systemic Fragility – Infrastructure, Vacancies & Burnout
From vacant posts in tribunals to short working hours and overburdened benches, the infrastructure around IBC adjudication is, in his view, “running a marathon with a limp.” He emphasized the need for systemic readiness — not just legislative clarity.
4. Red Tape Over Resolution
Even though the IBC was built to bypass the red tape of older debt laws, in practice, procedural hurdles and bureaucratic interpretation have resurrected the same ghosts the Code tried to bury.
Justice Venkatesh’s Prescription for Reform:
His solutions weren’t just judicial idealism they were grounded in real courtroom experience:
• Specialist Appointments: Members of tribunals should have a proven track record in insolvency law or finance — not just bureaucratic credentials.
• Transparent Digital Listing: Automatic, rule-based case listing using tech can prevent arbitrary prioritization.
• Accountability for Tribunal Performance: Justice delivery institutions should be assessed just like any other — with data, targets, and transparency.
• Public Participation in Reform: He stressed the need for lawyers, professionals, and civil society to remain invested in keeping the IBC alive and evolving.
Case Reference
Justice Venkatesh’s remarks were made in context with recent judicial commentary in State Bank of India v. Consortium of Murari Lal — a case where the Supreme Court itself expressed concern about how NCLTs and NCLATs are often staffed and functioning without the required expertise and efficiency. The apex court had observed:
“We are building skyscrapers on foundations that are not even solidified yet.”
Justice Venkatesh’s intervention comes not just as a critique, but as a judicial call to action. He reminded the legal fraternity that the success of a progressive law like the IBC doesn’t lie in how it’s written, but in how it’s carried forward by those entrusted with its application.
In his words, “A law without a capable system is like a compass without a needle. You’ll have the tool, but never the direction.”
