Legal Article

Single Window Clearance under the IBC 2016: A Paradigm Shift

Shivendra Pratap Singh


High Court Lucknow

Article | Insolvency Law

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Published on: 2 Aug, 2023

Single Window Clearance under the IBC. The Insolvency and Bankruptcy Code (IBC) 2016 is a landmark legislation in India’s financial and corporate landscape, aiming to streamline the insolvency process for corporates, individuals, and partnership firms in a time-bound manner. One of its salient features is the ‘single window clearance’ mechanism, a transformative change aiming to cut red tape, remove multiple jurisdictional overlaps, and simplify the insolvency resolution process.

Understanding the Premise

Before diving deep, it’s crucial to recognize the scenario prior to the IBC. Insolvency proceedings were scattered under multiple laws – the Companies Act, SARFAESI Act, and the Sick Industrial Companies Act, among others. This fragmentation led to numerous legal tussles, jurisdictional overlaps, delays, and inconsistencies in the resolution process.

Single Window Clearance: The IBC’s Game-Changer

1. Centralized Adjudication:

  • The IBC introduced the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) as the central adjudicating authorities for companies and LLPs. For individuals and partnership firms, it’s the Debt Recovery Tribunal (DRT).
  1. Unified Code:
    • The IBC consolidates India’s bankruptcy and insolvency laws, ensuring a single comprehensive law governs the process.
  2. No Overlapping Jurisdictions:
    • By bringing all cases under a single umbrella, the IBC eliminated the problem of multiple forums hearing different aspects of the same case.
  3. Clarity on Priority:
    • The IBC clearly defines the order of priority for debt clearance, ensuring transparency and minimizing disputes among various creditors.
  4. Operational and Financial Creditors:
    • For the first time, operational creditors, like vendors and suppliers, got a voice in the insolvency resolution process, making the mechanism inclusive.

Impact and Benefits

  1. Swift Resolutions:
    • By providing a clear framework and cutting through the bureaucratic maze, the IBC accelerates the resolution process.
  2. Boost to Foreign Investment:
    • The clarity and transparency of a single window clearance system can boost investor confidence, leading to increased foreign direct investments.
  3. Asset Maximization:
    • With a more streamlined process, there’s a higher likelihood of preserving the debtor’s asset value, ensuring creditors get a fair share.
  4. Promotion of Entrepreneurship:
    • By reducing the stigma associated with business failures and providing a clear path for resolutions, the IBC promotes risk-taking and entrepreneurship.

Challenges Ahead

While the single window system has been lauded, it has faced challenges:

  1. Overburdened Tribunals:
    • The sheer volume of cases has put a strain on the NCLT and DRT, sometimes causing delays.
  2. Legal Ambiguities:
    • Certain provisions of the IBC have been challenged in courts, leading to uncertainties.
  3. Coordination with Other Laws:
    • While the IBC aims to be comprehensive, there’s a need for better coordination with other laws like the SARFAESI Act.


The introduction of a single window clearance system under the IBC 2016 showcases India’s commitment to streamline its insolvency resolution process, making it more efficient, transparent, and business-friendly. While challenges persist, the centralized approach is undoubtedly a leap in the right direction, fostering a more robust economic ecosystem.

Tags: #IBC2016 #SingleWindowClearance #Insolvency #Bankruptcy #IndianEconomicReforms #NCLT


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