Kalyani Transco’s case[1] is not just about the judgment on one of the “dirty dozen” corporate defaulters, but is also a mirror to reflect upon the unfinished business of the Insolvency and Bankruptcy Code (IBC 2016). As it shows that even after 9 years of its existence, the IBC 2016 still has various unfinished businesses to tackle with. IBC 2016 is hailed as one of India’s boldest economic reforms, which is designed to give (i) creditors control and (ii) revive the failing companies. But its foundations reveal various cracks, when it is tested by the hard cases such as Kalyani Transco. As the spotlight in this case has been on the Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA), the elusive “phantom profit” generated during the insolvency process, and this ruling has opened up more profound questions, such as who can challenge an insolvency resolution? And what happens to the CoC after the plan is approved? Another question is how IBC 2016 interacts with the money-laundering laws, such as PMLA 2002? And why do the operational creditors continue to face the brunt of the stringent insolvency process?
