IBC cases piling up largely due to lack of NCLT Benches, DFS tells MCA

With nearly 15,000 cases pending, the shortage of NCLT benches has raised concerns over prolonged insolvency processes, asset erosion, and delayed resolutions under the IBC framework

The Department of Financial Services has written to the Corporate Affairs Ministry raising concerns around the limited number of Benches of the National Company Law Tribunal (NCLT), which it said was leading to piling up of Insolvency and Bankruptcy Code (IBC) cases, a senior official said. 

“More Benches of the tribunal are necessary. This is one of the things that the proposed IBC Bill has not been able to address,” the senior official said.  On its part, the ministry of corporate affairs in a parliamentary response had said that the pendency of cases in NCLT depends on circumstances and complexity of each case, nature of evidence, number of Interlocutory Applications, stay by the higher courts in many cases and cooperation of stakeholders. 

NCLT is a quasi-judicial body. Its original mandate was to deal with cases under the Companies Act. However, the adjudicating authority is mostly dealing with cases related to the IBC now. 

As of March 2025, 14,961 cases were pending at NCLT. Of these 6,988 were IBC cases while the remaining were related to Companies Act and Mergers & Acquisitions. 

“To facilitate expeditious disposal, government is taking necessary steps on an ongoing basis, which include implementation of e-court and hybrid court project, regular colloquiums for capacity building of members, provisions of infrastructure, filling up of vacancies, etc,” Harsh Malhotra, minister of state for corporate affairs had told the Lok Sabha.   According to the data by the Insolvency and Bankruptcy Board of India, 78 per cent of ongoing corporate insolvency resolution processes (CIRPs) have crossed the 270-day threshold. 

A report by Kotak Institutional Equities said, “The motive of the IBC to conclude processes at the earliest is yet to materialise, with the 1,258 CIRPs that yielded resolution plans taking 724 days on average.” 

One of the biggest criticisms of the IBC in its current avatar has been the delay in resolutions, which leads to steep erosion in the value of assets and the subsequent chances of a company continuing as a going concern. 

 

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