NCLAT IBC Bill Appeal Timelines | Industry News
- The Insolvency and Bankruptcy Code (IBC) Amendment Bill 2025, as initially proposed, has been criticized by the select committee for failing to address a crucial aspect of the...
- The committee argues that the effectiveness of the IBC hinges on a strict, time-bound framework.
- The committee suggests adding a new clause to the Bill mandating that "The National Company Law Appellate Tribunal shall dispose of an appeal within three months from the...
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IBC Amendment bill 2025: NCLAT Timelines Remain Unaddressed, Committee Report Reveals
Table of Contents
Key Findings of the Select Committee Report
The Insolvency and Bankruptcy Code (IBC) Amendment Bill 2025, as initially proposed, has been criticized by the select committee for failing to address a crucial aspect of the insolvency resolution process: the timely disposal of appeals by the National Company Law Appellate Tribunal (NCLAT). The committee’s report, tabled in Parliament on December 16, 2023, strongly recommends the introduction of a clear statutory timeline for NCLAT to dispose of appeals.
The committee argues that the effectiveness of the IBC hinges on a strict, time-bound framework. Undue delays at the appellate stage risk negating the efficiency and certainty that the IBC aims to provide to creditors and debtors alike.
Proposed Timeline for NCLAT Appeal Disposal
The committee suggests adding a new clause to the Bill mandating that “The National Company Law Appellate Tribunal shall dispose of an appeal within three months from the date of its receipt.” This proposed timeline aims to streamline the appellate process and prevent prolonged delays that can significantly impact the outcome of insolvency cases.
Further Recommendations from the Select Committee
Codification of the Cross-Border Insolvency Framework
The panel has also called for the codification of the basic tenets of the cross-border insolvency framework directly within the IBC. Currently, the framework relies on reciprocal arrangements with other countries. Integrating it into the code itself would provide clear legislative guidance and tailor the framework to India’s specific institutional environment. This is particularly important as more and more Indian companies have international operations and assets.
Decriminalization of Certain IBC Provisions
The committee advocates for the decriminalization of certain provisions within the IBC. This move is intended to foster a more effective and accessible creditor-initiated insolvency resolution process (CIIRP) and potentially lower voting thresholds for key decisions.
Separation of Resolution Professional (RP) and Liquidator Roles
A critically important proposal is to bar a Resolution Professional (RP) from also acting as the Liquidator in the same case. The Bill initially proposed shifting from automatic liquidator appointment to one requiring Committee of Creditors (CoC) approval. This change aimed to address potential perverse incentives for RPs to favor liquidation over resolution to secure higher fees, as liquidator remuneration is often a percentage of the liquidation estate, unlike the RP’s fixed monthly fees.
The committee believes