Directors Duties In The Twilight Zone of Insolvency (a Comparative Analysis of India, The UK, and Australia)

This paper examines the gap in India’s framework dealing with the absence of laws in twilight zone i.e. the pre insolvency period particularly for creditor protective duties on directors of the company. Even though India has Insolvency and Bankruptcy Code 2016 however the twilight zone (Period between foreseeable financial distress and formal insolvency) is substantially unregulated. This paper highlights that the lack of laws in India on twilight zone are not just an oversight by the lawmakers but rather a structural consequence of its promoter dominated corporate architecture. It also reiterates the need for a better creditor protection method, triggered by objective awareness of likely insolvency enforced through institutional mechanisms including the company secretory as the sole insolvency trigger locks and the implementation through IBBI regulation making power without the need of parliament amendment.