IBC amendments may make resolution faster but raise inter-govt conflicts

The recent Insolvency and Bankruptcy Code (IBC) amendment, proposing a plan that would be binding upon Centre, state and local authorities, could pave the way for faster resolution in sectors such as telecom, mining, while opening doors for inter-government conflict. 

Several government bodies have questioned the validity of resolution plans that reduces their claims. At present, the IBC has a provision that holds that once the Resolution Plan is approved, it shall be binding upon all stakeholders, including corporate debtor, its employees, members, creditors, guarantors, and other stakeholders involved in the resolution plan. 

The proposal to sell RCom’s assets to