A recent National Company Law Appellate Tribunal (NCLAT) ruling on the Insolvency and Bankruptcy Code (IBC) weakens the mechanism by delaying quick resolution, legal experts said.
The appellate tribunal said that the 14-day timeline for rejecting or admitting a case under the IBC was a directive: that means courts do not have to necessarily adhere to this deadline. It, however, said that once a case is admitted, the 270-day timeline for resolution is mandatory.
Time-bound resolution is a cornerstone of the IBC. It is critical, especially at a time when the government has empowered the Reserve Bank of India to ask banks to invoke the IBC to solve the Rs9.6 trillion stressed assets problem.
To admit or reject a petition is proc…
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