Crisis for IBC

Secured creditors' rights must not be diluted

Two recent judgments relating to the rights of creditors are shaking the financial markets in India. They have the potential to not just stall the working of the Insolvency and Bankruptcy Code (IBC), but also to dry up the pool of potential investors in stressed assets in India —and, indeed, to clog up the working of the credit markets altogether if they go down as a precedent to be followed. These decisions are by the National Company Law Tribunal (NCLT) in relation to the dues to creditors of the troubled Infrastructure Leasing and Financial Services (IL&FS); and by the National