The Court noted that 383 resolution plan approval applications are pending before NCLT benches, with delays ranging from 48 days to 738 days and, in some cases, up to four years.
Supreme Court Takes Suo Motu Cognizance Of NCLT Delays
The Supreme Court on Wednesday, April 29, took suo motu cognizance of delays in the approval of resolution plans by National Company Law Tribunals.
The Court focused particularly on the NCLT Principal Bench in New Delhi.
A Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan examined a report submitted by the Registrar of the NCLT Principal Bench. The Court had earlier directed the Registrar to submit the report.
After considering the material, the Bench described the situation as “grim and dismal”.
383 Resolution Plan Applications Pending Before NCLT Benches
The Court recorded that 383 applications seeking approval of resolution plans remain pending before NCLT benches across the country.
According to the Bench, the delay ranges from 48 days to 738 days. Some matters have remained pending for nearly four years.
The Court observed that such delay defeats the purpose of the Insolvency and Bankruptcy Code. It noted that the Code aims to ensure time-bound resolution, preserve asset value, and promote economic efficiency.
Shortage Of Judicial And Technical Members Affects NCLT Functioning
The Bench also took note of the shortage of judicial and technical members in NCLT benches.
Against the sanctioned strength of 63 members, only 28 judicial members and 26 technical members currently hold office.
The Court noted that this shortage has led to frequent changes in bench composition. It has also resulted in half-day sittings and delays in adjudication.
Stakeholder Objections Add To Pendency
The Court further noted that stakeholders have filed several objections against resolution plans. These objections have added to the pendency before NCLT benches.
The Bench also recorded that tribunals grant interim relief only in limited cases. However, the larger delay continues to affect the insolvency resolution process.
Court Questions Contractual Registrar Post
During the hearing, the Court was informed that the post of Registrar is contractual in nature.
The Bench reacted strongly to this submission and called the arrangement “unheard of”.
The Court indicated that such a structure does not suit a tribunal that handles high-value commercial adjudication.
Matter To Be Placed Before Chief Justice Of India
The Supreme Court took suo motu cognizance of the issue in larger public interest.
The Bench directed that the matter be placed before the Chief Justice of India for appropriate orders.
The Court said the issues require urgent attention. It also observed that authorities must address them on a “war footing”. Otherwise, the purpose of the Insolvency and Bankruptcy Code would stand frustrated.
Insolvency Dispute Involved IIFL’s ₹85 Crore Claim
The proceedings arose from an insolvency dispute involving IIFL’s ₹85 crore claim.
The Resolution Professional had rejected the claim in 2020. Later, the National Company Law Tribunal allowed it.
The National Company Law Appellate Tribunal upheld the NCLT decision in 2023. The parties then approached the Supreme Court in appeal.
Resolution Plan Pending Since July 2024
Meanwhile, the Committee of Creditors approved a resolution plan on July 4, 2024.
The plan was filed before the NCLT for approval on July 12, 2024. However, the application has remained pending for nearly two years.
As a result, the insolvency resolution process has come to a halt.
Arbitral Award Raised Doubts Over IIFL Claim
The delay became more significant because of an arbitral award dated July 3, 2024.
The award raised doubts over IIFL’s claim. It found that the underlying loan documents suffered from fraud.
Against this background, the Supreme Court observed that the delay reflected a wider systemic issue. The Court said the problem concerns resolution plan approvals pending before NCLTs across the country.
Earlier Direction For Nationwide Data
On April 16, 2026, the Supreme Court had directed the NCLT Principal Bench, New Delhi, and the Insolvency and Bankruptcy Board of India to submit nationwide data.
The Court sought details of pending applications for resolution plan approval. It also asked for reasons behind the delay.
The matter came up again on April 29. On that date, the Court took suo motu cognizance of delays in resolution plan approvals before NCLTs.
