Parliamentary Committee Calls For More NCLT Benches To Speed Up IBC Cases

New Delhi, Dec 20 (KNN) The Parliamentary Standing Committee on Finance has recommended exploring the creation of dedicated fast-track insolvency benches for fixed periods to ease the mounting workload on existing benches under the Insolvency and Bankruptcy Code (IBC).

The committee has also underlined the urgent need to increase the number of National Company Law Tribunal (NCLT) benches across the country to address growing delays in the disposal of insolvency cases.

Capacity Constraints Affecting Timely Resolution
In its 28th IBC report tabled on December 2, 2025, the committee said capacity constraints at the NCLT and National Company Law Appellate Tribunal (NCLAT) are delaying insolvency resolutions and undermining the Code’s effectiveness.

The panel attributed delays at the admission and resolution stages to a shortage of functional benches, vacancies of judicial and technical members, and heavy caseloads, with repeated adjournments and prolonged hearings pushing cases beyond statutory timelines.

Rising Caseload and Weak Liquidation Outcomes
Citing official data, the committee said that since the IBC’s inception, 8,715 Corporate Insolvency Resolution Processes (CIRPs) had been admitted as of October 31, 2025. Of these, 1,322 were resolved through approved plans, 2,758 ended in liquidation, and 1,926 remained ongoing.

The committee warned that delays deter serious resolution applicants and push stressed firms toward liquidation, noting weak outcomes with recoveries averaging about 6 percent due to asset value erosion over time.

IBC Delivering Value Where Timelines Are Met
Despite systemic challenges, the committee noted that timely IBC resolutions have yielded results, with creditors realising Rs 3.89 lakh crore till March 2025, 32.8 percent of admitted claims and 170.1 percent of liquidation value.

RBI Suggestions and Key Recommendations
The panel noted RBI’s view that admission-stage delays could be cut by making timelines mandatory and introducing a binding creditor code of conduct to avoid disputes over proceeds stalling resolutions.

The committee recommended adding more NCLT benches, filling judicial and technical vacancies, strengthening registry and technical support, and exploring fast-track benches for high-value insolvency cases.

The committee concluded that timely augmentation of adjudicatory capacity is critical for maximising the value of stressed assets and sustaining confidence in India’s insolvency framework under the IBC.

(KNN Bureau)