The Creditor-Initiated Insolvency Resolution Process is a core concept and provision within the Insolvency and Bankruptcy Code, 2016 (IBC), which governs the Corporate Insolvency Resolution Process (CIRP) in India. The IBC was enacted in May 2016, following the November 2015 report of the Bankruptcy Law Reforms Committee (BLRC), chaired by Dr. T. K. Viswanathan. The Code was created to replace a fragmented legal framework, including the Sick Industrial Companies Act (SICA), and to solve the problem of low debt recovery by shifting the power to resolve a defaulting company from the debtor to the creditors.
The mechanism is triggered when a corporate debtor defaults on a debt of at least ₹1 crore. A Financial Creditor (like a bank) initiates the process by filing an application under Section 7 of the IBC before the National Company Law Tribunal (NCLT), the Adjudicating Authority. An Operational Creditor (like a supplier) must first issue a demand notice under Section 8 and then file under Section 9 if the debt is undisputed. Upon admission by the NCLT, a moratorium is imposed, and the company's management is suspended, with control shifting to an Interim Resolution Professional (IRP). The process is overseen by the Committee of Creditors (CoC), which comprises financial creditors and makes all commercial decisions. The IBC is regulated by the Insolvency and Bankruptcy Board of India (IBBI).
The process has recently changed with the enactment of the IBC (Amendment) Act, 2026 (assented to on April 6, 2026), which introduced a new framework called the Creditor-Initiated Insolvency Resolution Process (CIIRP) in Chapter IV-A (Sections 58A–58K). The CIIRP is a largely out-of-court mechanism that can be initiated by specified financial creditors holding at least 51% of the debt value. Unlike the traditional CIRP, the CIIRP is a debtor-in-possession model, meaning the existing management retains operational control under the supervision of a Resolution Professional. This new process is targeted for completion within 150 days.