Process of liquidating a company
Occasionally, a doubt is expressed as to whether developing countries should consider incorporation of such legal frameworks.
There is no need of a separate Insolvency Law for the present.
This will provide opportunity to businesses in liquidation to turnaround wherever possible.
Similarly, conversion to liquidation might be appropriate even after a rehabilitation plan has been approved if such a plan was procured by fraud or the plan can no longer be implemented.
The Committee is of the view that a review of the system for addressing corporate insolvency in the Indian context is urgently called for and recommends the following to the policy planners in India.
Insolvency Law 6.1 An effective insolvency system is an important element of financial system stability.