The Supreme Court has expressed concern over the National Company Law Tribunal (NCLT) in a pending case where approval of resolution plans has been stalled for over two years.
The bench of Justice JB Pardiwala and Justice KV Viswanathan issued direction to the Principal Bench of NCLT, New Delhi and the Insolvency and Bankruptcy Board of India (IBBI) to furnish the details of pending approval applications with their reasons for delay and state the underlying factors leading to the non-disposal of these applications.
The matter originated from the insolvency proceedings where the Resolution Professional rejected a IIFL Rs 85 crore claim in 2020 which was later allowed by the NCLT in 2023, leading to the preferred appeals currently before the Apex Court.
Allegations of fraud have further stalled the process, with a July 3, 2024 arbitral award casting a doubt over the validity of IIFL’s financial claims. Further, even after the resolution plan was approved by Code of Conduct (CoC) on July 4 2024, and filed before the NCLT on the July 12, 2024, still the said application was pending for nearly two years.
The Court observed that it is very unfortunate to see that matter has not been adjudicated for nearly two years even though the resolution has been passed by the CoC.
It was further noted that the NCLT must act expeditiously, as any delay compromises the fundamental purpose of the Insolvency and Bankruptcy Code (IBC), to provide a time-efficient CIRP (Corporate Insolvency Resolution Process), the court said.
The Court also directed the Registrar, NCLT, New Delhi and, to forward the data of all the pending approval applications including the other benches and to forward the report addressing the stated queries.
The Court also issued direction to IBBI to provide quantitative data, across the country, in relation to the aforementioned inquiries.
The Supreme Court has scheduled the next hearing on April 29, 2026, where it will likely review the preliminary findings and decide if broader judicial directions are needed to fix the systemic issues in the NCLT.