The Insolvency and Bankruptcy Code, 2016 was built around a defining promise: time-bound resolution, with the corporate insolvency resolution process meant to conclude within 330 days including litigation, on the theory that a company's asset value bleeds out the longer it sits in limbo. A Bench of Justice J. B. Pardiwala and Justice K. V. Viswanathan has now taken the unusual step of registering a suo motu case squarely on the ground that this promise is, in the Court's own words, 'impossible to achieve' under present conditions — not because the statute is flawed, but because the tribunals meant to enforce it cannot keep pace.
The numbers the Bench cited are stark: 383 applications seeking approval of resolution plans were found pending across various benches of the National Company Law Tribunal, with delays ranging from 48 days at the shorter end to as much as 738 days — nearly four years — at the longer end. These are not disputes about the merits of a resolution plan; they are cases where a Committee of Creditors has already approved a plan and the only remaining step is judicial approval, meaning the delay itself, rather than any substantive contest, is what is eroding the value the resolution process was supposed to preserve.
The Court's own diagnosis points to institutional capacity rather than any single bad actor — inadequate infrastructure and a shortage of trained personnel across NCLT benches, a structural problem that has been building for years as the volume of insolvency filings has grown faster than the tribunal system's capacity to process them. A resolution plan sitting unapproved for two or three years defeats the Code's core objectives on every front: asset values continue to deteriorate, resolution applicants who priced their bids assuming a swift handover face carrying costs they did not budget for, and creditors recover less than the plan originally promised simply because of the passage of time.
For resolution applicants and creditors currently navigating live CIRPs, the suo motu proceeding is worth tracking closely — any systemic directions the Court eventually issues on tribunal case-management or bench strength could materially affect how long a pending resolution plan approval is realistically expected to take. In the interim, resolution applicants bidding for stressed assets should build a more conservative timeline assumption into their financial models and legal documentation, including explicit provisions addressing what happens to the deal economics if NCLT approval is delayed well beyond the statutory 330-day outer limit.