IBC resolutions exceed new time limit of 330 days prescribed by Govt

The average time taken for completion of 156 CIRPs that have yielded resolution plans has overshot the government's revised deadline of 330 days for completion of the process.

According to the Insolvency and Bankruptcy Board of India (IBBI) data, till September 2019, 156 CIRPs have yielded resolutions and the average time taken for resolution, including the time excluded by the adjudicating authority (AA) is 374 days; if the time excluded by the AA is considered then the average time taken would stand at 347 days. Either way, the time taken for resolution is more than the government's revised deadline of 330 days.

In July, in a bid to expedite the resolution process, the government made amendments to the Insolvency and Bankruptcy Code (IBC) that included revising the time limit to 330 days. The amendments though passed by the Parliament are facing a legal challenge in the Supreme Court by operational creditors to Essar Steel.

The outside time limit for resolutions earlier was 270 days. In many cases however that timeline had been breached largely due to litigation from different stakeholders. In most cases, insolvency courts had excluded the time period of litigation.

As on September 30, 2019, 535 of the 1,497 onging CIRPs had exceeded the 270-day timeline; 324 had exceeded 180 days but were within 270-day timeframe. The total number of cases admitted were 2,542. #casansaar (Source - Business Standard)