Avoidance Transactions Under IBC: ₹3.90 Lakh Cr Reported

An estimated ₹3.90 lakh crore in avoidance transactions were identified and reported to the Adjudicating Authority under India’s Insolvency and Bankruptcy Code (IBC) as of June 30, 2025. The government’s Ministry of Corporate Affairs does not centrally track recoveries from these transactions, as they often conclude after the insolvency process. The top 10 companies, led by Dewan Housing Finance Corporation Limited (DHFL), accounted for a significant portion of the total value of these transactions. To improve the recovery process, the government has mandated that Resolution Professionals (RPs) identify and report these transactions early on. Additionally, resolution plans must outline how these cases will be pursued even after the Corporate Insolvency Resolution Process (CIRP) is complete. The government has also made it mandatory to disclose identified avoidance transactions in the Information Memorandum to enhance transparency. The government, however, has no plans to amend the IBC to extend the review period for these deals from two years to an even longer duration.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS

RAJYA SABHA
UNSTARRED QUESTION NO. 2940
ANSWERED ON TUESDAY, AUGUST 19, 2025/ SRAVANA 28, 1947 (SAKA)

AVOIDANCE TRANSACTIONS UNDER IBC

2940. SHRI DEREK O’ BRIEN:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

(a) the total value (in ₹) of avoidance transactions identified and recovered under the Insolvency and Bankruptcy Code (IBC) till now;

(b) the top 10 companies responsible for avoidance transactions and their share in total avoidance transactions and the details thereof;

(c) the measures taken by Government to expedite recovery from avoidance transactions, particularly in cases where it is moved through shell companies or abroad; and

(d) whether Government plans on amending the IBC to allow review of deals made two years before the insolvency process and the details thereof?

ANSWER

ATE IN TMINISTER OF STHE MINISTRY OF CORPORATE AFFAIRS AND MINISTER OF STATE IN THE MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

[HARSH MALHOTRA]

(a): As on June 30, 2025, avoidance transactions applications involving an amount of Rs. 3.90 lakh crore have been filed with the Adjudicating Authority. Recovery in such cases is mostly effectuated after the closure of the IBC process and is, therefore, not centrally maintained.

(b): The Details of top 10 companies is attached at Annexure A.

(c): The Insolvency and Bankruptcy Code, 2016 and regulations made thereunder, contain specific provisions for identification and recovery of value lost through avoidance transactions such as preferential, undervalued, fraudulent and extortionate transactions. To strengthen and expedite recovery from such transactions, the following steps have been taken:

(i) Early identification and filing: Under Regulation 35A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) the Resolution Professional (RP) is required to determine the avoidance transactions at the earliest and file application before the Adjudicating Authority (AA) for seeking appropriate relief.

(ii) Enhanced Disclosure Requirements in Information Memorandum (IM): CIRP Regulations provide that the IM must include details of all identified avoidance transactions and subsequent filings with the AA.

(iii) Continuation beyond CIRP: Regulation 38(2) of CIRP Regulations provides that the resolution plan must provide for the manner in which avoidance applications will be pursued after resolution plan.

(d): No Sir.

Annexure-A

[Annexure referred to in part (b) of the Rajya Sabha Unstarred Question No. 2940 for 19.08.2025]