The Insolvency and Bankruptcy Code (IBC) 2016 underwent significant amendments in 2020-2021, introducing pre-packaged insolvency for MSMEs and clarifying homebuyer rights. Supreme Court's Swiss Ribbons judgment established operational creditor standing, while Essar Steel case defined distribution waterfall priorities. Recent amendments expanded NCLT jurisdiction, introduced alternative dispute resolution mechanisms, and strengthened resolution professional framework. The Code now covers 270-day resolution timeline for corporate debtors, with specific provisions for real estate and financial service providers under different timelines.

The IBC framework operates through a creditor-in-control model, replacing the earlier debtor-in-possession system under SICA. Recent amendments address practical challenges: pre-packaged insolvency allows MSME debtors to negotiate with creditors before formal proceedings, reducing resolution time from 270 to 120 days. Supreme Court interpretations have been crucial - Swiss Ribbons established that operational creditors can initiate proceedings despite not being part of Committee of Creditors, while Essar Steel clarified that successful resolution applicants cannot modify approved plans unilaterally. The Court also ruled in Jaypee Infratech that homebuyers rank as financial creditors, not operational creditors, giving them voting rights. These judicial pronouncements balance creditor rights with debtor rehabilitation. The 2021 amendments introduced pre-pack for companies with defaults up to ₹1 crore, electronic voting for CoC decisions, and alternative dispute resolution as mandatory pre-litigation step. This evolution reflects the Code's maturation from a pure liquidation-focused law to a genuine resolution mechanism, though recovery rates remain around 43% compared to 26% under previous regimes.