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Supreme Court Flags NCLT's Insolvency Plan Delays
21 Apr
Summary
- Supreme Court notes NCLT's lengthy delays in approving insolvency plans.
- Applications for resolution plan approvals pending for up to two years.
- Court seeks nationwide data on pending NCLT approval applications.
The Supreme Court of India has raised alarm over the National Company Law Tribunal's (NCLT) prolonged delays in approving resolution plans under the insolvency framework. A bench of Justices JB Pardiwala and KV Viswanathan deemed it "very unfortunate" that such applications remain undecided for extended durations, with some cases experiencing pendency of up to two years.
The Court's observations, made during a hearing concerning AVJ Developers (India) Pvt Ltd's insolvency proceedings, highlighted that numerous such applications are pending across various NCLT benches. Consequently, the principal bench in New Delhi has been directed to furnish comprehensive data detailing the number of pending resolution plan approvals, the duration of these delays, and their underlying reasons.
Furthermore, the Supreme Court has involved the Insolvency and Bankruptcy Board of India (IBBI), requesting it to submit nationwide statistics on pending approval applications before the NCLT. This action underscores the judiciary's seriousness in addressing the inefficiencies within the insolvency resolution process. The matter has been scheduled for further consideration on April 29, with senior advocates appointed as amici curiae to assist the Court.
