Live Law
In an important development, the Supreme Court has expressed serious concern over prolonged delays in approval of resolution plans by the National Company Law Tribunal (NCLT), calling out a case where a plan has remained pending for nearly two years.
A bench of Justice JB Pardiwala and Justice KV Viswanathan directed both the NCLT Principal Bench, New Delhi and the Insolvency and Bankruptcy Board of India (IBBI) to furnish comprehensive nationwide data on pending approval applications and reasons for such delays.
The Court ordered the NCLT Principal Bench, New Delhi to provid the following information at the earliest: –
“(i) How many applications for approval of resolution plans are pending?
(ii) For how long are such applications pending?
(iii) Reasons, why the approval applications have not been adjudicated upon till date.”
The bench heard the dispute that arises from insolvency proceedings where IIFL’s ₹85 crore claim was initially rejected by the Resolution Professional in 2020 but later allowed by the National Company Law Tribunal and upheld by the National Company Law Appellate Tribunal in 2023, prompting appeals before the Supreme Court.
Meanwhile, the CoC approved a resolution plan on July 4, 2024, which was filed for approval before the NCLT on July 12, 2024. However, the application has remained pending for nearly two years, stalling the insolvency resolution process.
The delay is further complicated by a July 3, 2024 arbitral award that casts doubt on IIFL’s claim, finding the underlying loan documents to be tainted by fraud. In this backdrop of a disputed claim and prolonged inaction, the Supreme Court flagged the delay as indicative of a broader systemic issue in NCLT approvals.
“We take a very serious note of the matter that the plan as approved by the CoC is awaiting approval of the adjudicating authority past almost two years.”, observed the court, stating that “it is very unfortunate that there is no adjudication on the approval past approximately two year.”
The Court indicated that when the resolution plan was approved, it was incumbent upon the NCLT to approve in timely manner, otherwise the objective of the IBC to complete the timebound CIRP would be frustrated.
“It has come to our notice that many such approval applications are pending with the NCLT Principal Bench, New Delhi and also other Benches past several years.”, the court remarked, directing the Registrar, NCLT Principal Bench, New Delhi, to forward the report as regards the aforesaid queries raised by it.
The Court also directed the IBBI to provide with the necessary figures and statistics across the country, for the queries set out above.
Two weeks was granted to NCLT, New Delhi, and IBBI to file the report, following which the Court will decide as to what further course of action, if any, is to be adopted.
Also, Mr. Gopal Jain and Mr. Navin Pahwa, Senior counsels, were appointed as Amicus Curiae in the case.
The matter is posted on 29.04.2026 at 02:00 P.M.
