NCLT Insolvency Resolutions Fall To 13-Quarter Low In Q4 FY26

New Delhi, May 21 (KNN) Corporate insolvency resolutions through the National Company Law Tribunal (NCLT) slumped to a 13-quarter low in the January–March 2026 period, with only 36 cases resolved — a sharp decline from 70 in the same quarter a year ago. 

The figure marks the worst March quarter for insolvency resolution since January–March 2022, when just 29 cases were approved, according to data from the Insolvency and Bankruptcy Board of India (IBBI).

Leadership Vacuum at the Root of the Slowdown

Experts and officials tracking the process have attributed the steep drop primarily to the absence of a full-time NCLT President since the end of January 2026, compounded by several existing vacancies across benches. The monthly tally fell to as low as eight approved plans in February and seven in March, according to TOI.

Authorities are hopeful that the pace of resolutions will now recover following the appointment of Justice Anupinder Singh Grewal as the new NCLT President in May 2026.

Resolution Timelines Now Nearly Three Times the Legal Limit

The prolonged institutional disruption has taken a measurable toll on resolution timelines. 

The average time taken for closure of corporate insolvency cases has climbed to 744 days, up from 713 days a year ago — nearly three times the extended deadline of 270 days stipulated under the Insolvency and Bankruptcy Code (IBC). 

Enacted in 2016 to fast-track debt resolution, the IBC framework is now under significant strain from systemic delays. Last month, the Supreme Court also flagged its concern over the pace of resolution plan approvals.

Reforms in the Pipeline

IBBI Chairman Ravi Mittal, writing in the board's monthly newsletter, pointed to recent IBC amendments as a step towards addressing a key bottleneck — the prolonged litigation over establishing proof of default at the admission stage. 

Under the revised provisions, a record of default issued by an Information Utility (IU) will now be treated as sufficient proof, making the admission of Corporate Insolvency Resolution Process (CIRP) cases faster and more objective.

Additionally, the Ministry of Corporate Affairs (MCA) and IBBI have proposed the creation of more NCLT benches to ease the caseload. The proposal has received backing from the Parliamentary Committee overseeing IBC amendments, though it remains pending with the government.

Despite the current delays, IBC continues to be the preferred mechanism for creditors seeking resolution of outstanding dues.

(KNN Bureau)