Nearly a decade after the Insolvency and Bankruptcy Code transformed India’s approach to corporate distress, attention is shifting from the law itself to the institutions that implement it. The Code altered creditor behaviour, reshaped lending norms, and promised time-bound resolution. Yet mounting delays now suggest that the problem lies less with statutory design and more with adjudicatory capacity—specifically, with the structure and workload of the National Company Law Tribunal.
How the Tribunal’s Mandate Expanded Too Quickly
The “” was originally envisaged under the Companies Act, 2013 as a specialised forum for corporate law disputes. Within months, however, it was assigned a second and far more demanding role: adjudicating corporate insolvency under the “”. What followed was an institutional stretch. The NCLT today adjudicates insolvency resolution, liquidation, mergers, capital reduction, and oppression and mismanagement—all under one roof.
Why Insolvency Cannot Be Treated as Routine Company Law
Insolvency proceedings are built on speed. The Code assumes that value preservation depends on swift decision-making, predictable timelines, and limited judicial drift. Company law disputes, by contrast, demand careful factual scrutiny—questions of shareholder rights, valuation, governance failures, and fairness cannot be compressed into rigid timelines. Housing both within a single tribunal has created a structural mismatch.
What the Data Says About Delay
Recent figures from the “” underscore the problem. As of Q2 2025–26, the average time taken for approval of a resolution plan stands at 821 days. Even after excluding permitted delays, the process takes nearly 688 days. Of ongoing corporate insolvency resolution processes, nearly four-fifths have crossed the statutory 270-day limit, and over 60 per cent have run beyond two years. These are not marginal overruns; they strike at the Code’s core promise.
Limits of Incremental Fixes
The Parliamentary Standing Committee on Finance has acknowledged these delays, pointing to shortages of members, inadequate benches, and procedural bottlenecks. Its recommendations focus on tighter timelines and capacity augmentation. While necessary, these measures assume that the existing adjudicatory architecture is fundamentally sound. What they leave unexamined is whether a single tribunal can realistically balance two jurisdictions with entirely different tempos and objectives.
The Case for a National Insolvency Tribunal
A dedicated National Insolvency Tribunal would align institutional design with legislative intent. Exclusive insolvency benches would allow specialised expertise to develop, reduce inconsistency, and prioritise time-bound outcomes. Comparative experience supports this approach. The “” demonstrate how a specialised judicial ecosystem enhances predictability and creditor confidence. Insolvency adjudication benefits when judges and members deal with nothing else.
Where Company Law Disputes Should Go
Creating a separate insolvency forum inevitably raises the question of company law matters. These disputes are better suited to forums designed for sustained commercial adjudication. India’s High Courts already possess commercial divisions that handle complex, high-value disputes under structured timelines. Transferring company law cases to these divisions would both improve adjudicatory quality and relieve congestion in the insolvency system.
Legal Pathways for Institutional Recalibration
Such restructuring would require amendments to sections 408 to 434 of the Companies Act, along with corresponding procedural rules. This is not uncharted territory. India successfully transitioned from the Company Law Board and High Courts to the NCLT framework in 2016 through a phased process. A similar, carefully sequenced transition is administratively feasible.
Why the Moment for Reform Is Now
When a tribunal is pulled in opposing directions—speed on one side, deliberation on the other—neither objective is fully met. Persisting with the current arrangement risks undermining an otherwise coherent insolvency framework. The Code’s architecture remains sound; its execution is faltering because institutional design has not kept pace with ambition.
What to Note for Prelims?
- NCLT’s dual role under the Companies Act and the Insolvency and Bankruptcy Code.
- Statutory insolvency timeline of 270 days and current average delays.
- Role of IBBI in monitoring insolvency outcomes.
- Concept of specialised tribunals in economic governance.
What to Note for Mains?
- Critically examine whether a single adjudicatory forum can serve both insolvency and company law effectively.
- Discuss the relationship between institutional design and economic legislation outcomes.
- Evaluate the case for a National Insolvency Tribunal in light of delays under the IBC.
- Analyse how tribunal reform can strengthen creditor confidence and value maximisation.