National Company Law Tribunal: Corporate insolvency cases under IBC rising


The Indian Express
Sunny Verma
December 26, 2017
New Delhi 
Even as the rate of recovery of bad loans has shrunk, the number of cases being filed for corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC), enacted in May 2016, has been rising. As on November 2017, over 4,300 applications under

CIRP were filed in the various benches of the National Company Law Tribunal (NCLT), according to data from the Reserve Bank of India (RBI).

While resolution plans have been approved in 6 cases so far, a total of 19 cases have been closed by liquidation. In 25 cases, the admission of the cases to the National Company Law Tribunal have been set aside by the orders of appellate authorities, including the National Company Law Appellate Tribunal and the Supreme Court. The IBC also allows the operational creditors such as trade suppliers, employees, or workmen, to initiate insolvency resolution against companies. The data show that the operational creditors have been the most aggressive in initiating corporate insolvency proceedings, followed by financial creditors.

“The success of the IBC hinges on the development of a supportive environment consisting of trained insolvency professionals. The registration of trained insolvency professionals has gathered pace in the recent period, with the highest registrations being accounted for by the northern region,” the the Reserve Bank of India said. As on September 30, a total of 1,107 insolvency professionals have been registered with the Insolvency and Bankruptcy Board of India, with Delhi topping with a total of 263 professionals, followed by 202 in Mumbai.

Out of these, more than 500 applications for admission have been rejected, dismissed or withdrawn, while 470 cases admitted by National Company Law Tribunal are at various stages of the insolvency process.


As the majority of these are the cases where the insolvent firm has been previously admitted under the then prevalent laws such as the Companies Act and the Sick Industrial Companies Act, many cases were not pursued and became time-barred, the central bank said.

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