Government to create 'admission benches' in NCLT to expedite CIRP applications
The Union government aims to streamline the insolvency resolution process by introducing "admission benches" in the National Company Law Tribunal (NCLT). Delays in adhering to the mandated timeline of the Insolvency and Bankruptcy Code (IBC) prompted this move. The proposed amendment intends to ensure that the acceptance or rejection of applications for initiating the Corporate Insolvency Resolution Process (CIRP) against a debtor occurs within 14 days. This initiative aligns with the IBC's stipulation for the NCLT to admit or reject CIRP applications promptly. Coordination between the government and NCLT is underway to implement this measure efficiently.
Presently, the National Company Law Tribunal (NCLT) comprises 63 members, a number deemed insufficient by experts to meet the stipulated 330-day timeline for completing the Corporate Insolvency Resolution Process (CIRP). Mrs. Saloni Kothari, Group General Counsel of BDO India, emphasized that establishing separate admission benches at the NCLT would enable tribunal members to singularly focus on admission matters. This approach ensures the timely commencement of Insolvency and Bankruptcy Code (IBC) processes, aligning with IBC objectives currently hindered by time constraints.
Mrs. Saloni Kothari further highlighted the added advantages of timely admission, including reduced asset depreciation between initiation and admission of the resolution plan. This, in turn, serves as a deterrent for borrowers relying on court delays, promoting overall timeliness in the IBC ecosystem. Mr. Abhishek Rastogi, the founder of Rastogi Chambers, supported the initiative, stating that expediting litigation at the stage of forming additional benches would benefit all stakeholders involved in the process, including financial creditors and operational creditors.
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