The Supreme Court of India, in an order dated 16 April 2026 which dominated insolvency news through the week ending 20 April 2026, expressed serious concern over prolonged delays by the National Company Law Tribunal in approving resolution plans under the Insolvency and Bankruptcy Code, 2016. A Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan observed that "it is very unfortunate that there is no adjudication on the approval past approximately two year[s]" and directed the NCLT Principal Bench, New Delhi and the Insolvency and Bankruptcy Board of India to furnish comprehensive nationwide data within two weeks.
Background
The matter arose in proceedings concerning the insolvency resolution of a real estate corporate debtor. The resolution plan had been approved by the Committee of Creditors (CoC) on 4 July 2024 and was filed for approval before the NCLT on 12 July 2024. By the date of the Supreme Court's order, the application had remained unadjudicated for close to 21 months — well beyond the statutory 330-day outer limit in Section 12 of the Insolvency and Bankruptcy Code, 2016.
The Corporate Insolvency Resolution Process (CIRP) under the IBC was conceived as a strictly time-bound mechanism. Delays at the Section 31 approval stage have, in recent years, emerged as the single largest source of slippage, eroding both the commercial value available for distribution and the confidence of resolution applicants in the process.
Key Holdings
The Bench's operative directions include:
Nationwide data to be filed within two weeks: The NCLT Principal Bench, New Delhi, and the Insolvency and Bankruptcy Board of India (IBBI) have been directed to place on record comprehensive pan-India data covering the total number of resolution plans pending approval, the duration for which each has remained pending, and the reasons for non-adjudication.
Amici Curiae appointed: Senior Advocates Gopal Jain and Navin Pahwa have been appointed as Amici Curiae to assist the Court in examining the systemic causes and possible corrective directions.
Next hearing scheduled: The matter will next be heard on 29 April 2026 at 2:00 p.m., when the Court has indicated it will decide the further course of action, including the possibility of structural judicial directions.
Reaffirmation of IBC time discipline: The Bench reiterated that the IBC's time-bound scheme is the cornerstone of the Code's commercial efficacy, and that sustained delays at the approval stage defeat the statutory objective.
Implications for Practitioners
The 16 April 2026 order places insolvency practitioners and their clients in a position to invoke systemic data — once filed by the NCLT and IBBI — in individual applications seeking expedited disposal. For resolution applicants whose plans have been stuck at the approval stage, a fresh interlocutory application flagging the Supreme Court's stated concern is now a viable strategic option.
Counsel should also anticipate that the 29 April 2026 hearing may generate cross-cutting directions — on bench strength, pendency disclosure, or time-bound disposal — that will apply to all pending Section 31 applications across NCLT benches. Monitoring the record of that hearing and the supplementary affidavits filed by IBBI will be essential over the coming fortnight.
For corporate debtors, financial creditors, and homebuyer-creditor associations (as in the present matter), the order underscores the continuing relevance of writ jurisdiction under Article 226 where NCLT delay becomes unconscionable — the precedent set in Ebix Singapore Pvt. Ltd. v. Committee of Creditors of Educomp Solutions Ltd. (2022) 2 SCC 401 remains directly invocable.
Practitioners advising resolution applicants on deal timelines should factor in the renewed possibility that the Supreme Court may impose binding outer limits on the Section 31 approval stage, reshaping negotiation leverage in ongoing CIRPs.
Frequently Asked Questions
What is the statutory timeline for NCLT approval of a resolution plan under the IBC?
Section 12 of the Insolvency and Bankruptcy Code, 2016 prescribes a total outer limit of 330 days for completion of the Corporate Insolvency Resolution Process, including the NCLT's approval of the resolution plan under Section 31. In practice, however, the approval stage alone has been running into years, undermining the statutory architecture.
Can the NCLT modify commercial terms of a resolution plan at the approval stage?
No. Under Section 31 IBC read with Committee of Creditors of Essar Steel India v. Satish Kumar Gupta (2020) 8 SCC 531, the NCLT's role is a limited judicial review confined to the grounds under Section 30(2) IBC. It cannot renegotiate commercial terms but must satisfy itself of statutory compliance before approving the plan.
What remedies exist when a resolution plan remains stuck at the NCLT?
Stakeholders may invoke writ jurisdiction under Article 226, as recognised in Ebix Singapore Pvt. Ltd. (2022) 2 SCC 401, or move an application under Section 60(5) IBC before the NCLT. The Supreme Court's 16 April 2026 order now adds a systemic, data-driven route through ongoing judicial supervision.