NCLT sees 43% rise in debt resolution cases: IBBI

Kolkata: Debt resolution using Insolvency and Bankruptcy Act (IBC) surged about 43% in the just-ended financial year while the number of pending cases has fallen as resolution of cases has outnumbered new cases in the National Company Law Tribunal (NCLT).

"2023-24 has been a watershed year because the NCLT on its own has given us 270 resolutions against last year's 189. The speed is appreciable from the NCLT benches," Sudhaker Shukla, whole-time member of Insolvency and Bankruptcy Board of India (IBBC) said on Saturday.

"Also, it's the first time in a normal year, that is, excluding the Covid year, the number of outputs has exceeded the number of inputs, so the pendency of cases is going down," Shukla said at the 7th annual conference on Insolvency & Bankruptcy Code organised by CII.


Shukla noted that since 2016, the law has evolved and in FY24, about a dozen amendments have been made in IBBI with 86 interventions in a single year.

"We are responding to the market needs to bridge gaps according to the requirements where sectoral aspects were also touched...trying to follow the sandbox approach," he said, pointing to recent amendments related to the real estate sector where project wise resolution is allowed to improve outcomes.

P Santhosh, managing director at National Asset Reconstruction Company (NARCL) said any delay in resolution deteriorates asset quality, making debt revival much more difficult. To avoid such delay, coordination with financial creditors is important, he said.

Rohit Kapoor and Bidisha Banerjee, members-judicial at NCLT Kolkata bench, along with Balraj Joshi, member- technical, NCLT Kolkata Bench, who were present at the conference, highlighted the need for strengthening the number of benches or courts for speedy resolution of cases.

State Bank of India (SBI) deputy managing director (stressed assets resolution group) B Sankar said success of insolvency resolution depends on collaboration between creditors, distressed companies--often with suspended directors/promoters, and insolvency professionals.