INTRODUCTION
The Insolvency and Bankruptcy Code was created to facilitate the faster and more organised resolution of stressed companies.[1] Before the Code, insolvency cases often moved slowly and lost value along the way. The IBC changed this by fixing strict timelines and giving each stage a clear purpose.[2] One of the first steps in the Corporate Insolvency Resolution Process is the Expression of Interest. It tells the Resolution Professional that a person wants to take part in the process and may submit a plan.[3]
The EOI stage looks simple, but it is very important.[4] It decides who enters the process and who gets access to information about the company. This is why the law sets strict timelines for submitting EOIs. Everyone gets the same window to apply and the same rules to follow. These timelines help keep the process fair and predictable.
But real cases often bring difficult questions. Sometimes someone sends an EOI after the deadline. Sometimes a late applicant offers a much better plan than those who came on time. This creates a conflict.[5] Should the rules be followed strictly? Or should the process allow some flexibility when it may help in saving the company?
This blog looks at this conflict closely. It explains the legal framework for EOIs, the arguments for strict timelines, the concerns about value loss and the limited situations where flexibility may be justified.
WHY DEADLINES MATTER IN THE EOI STAGE
An EOI gives the first signal that someone wants to submit a plan. After EOIs are received, the Resolution Professional prepares a final list of applicants. Only these applicants can get information about the company and submit a resolution plan. This makes the EOI timeline very important. It keeps the process fair and gives every applicant an equal chance to enter.
Regulation 36A is the first safeguard.[6] It says that any EOI that comes after the last date in Form G must be rejected. There is no room for exception here.[7] The aim is to keep the entry stage clean and predictable. Courts have also supported this view and have said that even a short delay cannot be accepted because it weakens the time bound nature of the CIRP.[8]
Regulation 36B adds the next layer of discipline.[9] It allows the RP to invite plans again if the earlier set of plans is not good enough. But this second invitation can go only to those who are already in the final list of applicants. No new person can enter at this point. This rule shows that once the EOI window closes, the door stays closed for those who did not apply on time.[10]
Regulation 39 completes the framework.[11] It tells the CoC that they cannot consider a resolution plan that is late or comes from someone who is not in the final list. This protects the integrity of the earlier steps. It ensures that only those who followed the process from the beginning can reach the final stage. Tribunals have stressed that allowing outsiders at this point would make the process uncertain and endless.[12]
Courts have supported this strict approach many times.[13] Even a delay of one day has been rejected. Tribunals have said that accepting late EOIs harms fairness and breaks the discipline that the Code depends on. There have been cases where the CoC wanted to accept a late EOI for value reasons. The courts refused and said that commercial wisdom cannot override clear and mandatory rules.[14]
All these decisions show that deadlines in the CIRP are not small technical details. They are the backbone of the entire process. Without them, the process becomes slow, unfair and open to misuse.
WHEN STRICT RULES AFFECT THE MAIN GOAL
Even though the rules are strict, the IBC is not only about timelines. It is also about saving the business and getting the best possible value. This creates a real question. What if a late applicant brings a plan that can actually save the company. Should it be rejected only because of a missed date.
Many argue that the CoC should have some space to make practical decisions. Creditors know the financial reality better than anyone else. Courts have also said that the commercial wisdom of the CoC should not be disturbed unless there is a very strong reason.[15]
There are a few cases where such flexibility was allowed. In one case, there was no plan at all and the CIRP period was about to end. The CoC accepted a plan even though a fresh Form G was not issued. The Tribunal said that in such rare situations a small procedural issue should not destroy the chance of resolution.[16]
Judgments like Videocon also support this idea.[17] They say that the purpose of the IBC is to protect value. If the process becomes so rigid that a company goes into liquidation even though a good plan exists, then the purpose is lost. Other major cases like Essar Steel and Sashidhar stress that the decision of the CoC plays a central role in the process.[18]
These views show the other side of the debate. Total strictness may sometimes harm the main object of the Code. The Code is meant to revive companies, not to close doors too soon.
FINDING THE RIGHT BALANCE
Both views have truth in them. If late EOIs are freely accepted, the process can become endless. Applicants who came on time will feel cheated. The RP will struggle to run an orderly process. Creditors will face more delays.
But if we close the doors too tightly, some genuine chances of resolution may be lost. A company may go into liquidation even when a workable plan is available. Jobs may be lost. Value may fall. And the main purpose of the IBC would remain unfulfilled.
A balanced way is possible.[19] Late EOIs should normally be rejected. That should remain the rule. But in rare cases, when there is a real danger of liquidation or when there is no other plan, the CoC may look at a late proposal. The delay should be small. It should not harm those who followed the rules. And the decision should be explained clearly.
This way, the process stays fair and predictable. At the same time, it keeps room for practical judgment. This balance protects both discipline and value.
CONCLUSION
The question of unsolicited EOIs shows a deep tension in the IBC. On one side stands the need for fairness and strict timelines. On the other stands the goal of saving the company and protecting value. The law and many judgments support strict timelines. But a few situations show that flexibility can help when the stakes are high.
A balanced view respects both ideas.[20] Deadlines should guide the process. But exceptional cases may allow limited relaxation when it truly helps the purpose of the Code.
In the end, the IBC works best when procedure and purpose support each other. The aim is not only to finish the process on time but to do so in a way that gives the company a real chance to survive.
Author(s) Name: Siddhi Gupta (National Law Institute University Bhopal)
References:
[1] Insolvency and Bankruptcy Code 2016.
[2] Report of the Bankruptcy Law Reforms Committee Volume I: Rationale and Design (Ministry of Finance 2015) 10–13.
[3] Insolvency and Bankruptcy Code 2016, s 5(27).
[4] ArcelorMittal India Pvt. Ltd. v. Satish Kumar Gupta (2019) 2 SCC 1.
[5] Quinn Logistics India Pvt Ltd v Mack Soft Tech Pvt Ltd (2018) SCC OnLine NCLAT 243.
[6] Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016, reg 36A.
[7] Kotak Investment Advisors Ltd v Krishna Chamadia (2020) NCLAT 344.
[8] Vikram Venkatrao Gaikwad v Jitendra Palande (2024) SCC OnLine NCLT 3106.
[9] Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016, reg 36B(7).
[10] Ashdan Properties Pvt Ltd v Mamta Binani (2020) SCC OnLine NCLAT 262.
[11] Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016, reg 39.
[12] Jindal Power Ltd v Dhiren Shantilal Shah (2024) SCC OnLine NCLAT 1166.
[13] Dwarkadhish Sakhar Karkhana Ltd v Pankaj Joshi & Anr (2021) SCC OnLine NCLAT 233.
[14] M.K. Rajagopalan v Dr Periasamy Palani Gounder (2024) 1 SCC 42.
[15] K. Sashidhar v Indian Overseas Bank & Ors (2019) 12 SCC 150.
[16] Anil Kumar v Jayesh Sanghrajaka (2024) SCC OnLine NCLT 60.
[17] Bank of Maharashtra v Videocon Industries Ltd & Ors (2022) SCC OnLine NCLAT 6.
[18] Committee of Creditors of Essar Steel India Ltd v Satish Kumar Gupta (2020) 8 SCC 531.
[19] Venkateshwara Perumal, ‘Time vs. Value: A Tug of War in IBC With Reference To Reliance Capital’ (2023) 147.
[20] Kalpraj Dharamshi v Kotak Investment Advisors Ltd (2021) 10 SCC 401.