Resolutions approved by NCLT hit record in FY24
line of 330 days.
At 269, resolution plans approved by the NCLT under the IBC in FY24, were up 42% from FY23
RUCHIKA CHITRAVANSHI
New Delhi, 16 May
A record number of 269 resolution
plans were approved by the National
Company Law Tribunal under the
Insolvency and Bankruptcy Code
(IBC) in FY24, up 42 per cent from
the last year, the Insolvency and
Bankruptcy Board of India (IBBI) said
in its newsletter for January-March
2024.
“FY23-24 has witnessed an
unprecedented surge in the approval
of resolution plans under the IBC,
showcasing the effectiveness of the
legal framework in facilitating the
revival of insolvent businesses,” IBBI
chief Ravi Mittal said in the newslet-
ter. In the financial year 2023, the
NCLT had approved 189 resolution
plans with a realisation of 32 per cent
against the admitted claims.
Prepackaged insolvency resolution
process has resulted in 25 per cent
realisation against the admitted
ILLUSTRATION: BINAY SINHA
TRACK RECORD DELAYS AND RECOVERY
claims, IBBI data revealed.
There is also an improvement in
the ratio of resolution versus liqui-
dation cases from 0.46 in FY23 to 0.61
in FY24.
IBBI said there is a notable shift
in debtor behaviour towards early
settlement, with 308 stressed com-
panies getting rescued through with-
The delays often due to litigations
by multiple stakeholders with com-
peting interests, erode the value of
No. of days 453 already distressed corporate debtors,
Resolution plans
354 and minimises the recovery value to
approved under IBC
the creditors.
2017-18 19 140 “It is important for all the stake-
2018-19 75 holders to expedite decision-making
2019-20 132 during the process in the collective
0-330 330-599 600 or more interest of all,” Mittal added.
2020-21 119 Resolution in (days) Some of the steps taken by the
2021-22 144 IBBI to reduce delays include putting
2022-23 189 49.22 35.98 26.11 a cap on the number of modifications
to the resolution plan, sharing infor-
2023-24 269 mation by creditors with the resolu-
Source: IBBI Recovery (%) tion professional, among others.
“Continued efforts to streamline
the resolution process, enhance
drawal, appeal, or settlement by the tress in the early stages when the transparency, and provide greater
stakeholders. default is imminent, on receipt of a clarity on regulatory requirements
Till March 2024, 28,818 applica- notice for repayment but before the are underway to further bolster the
tions for initiation of corporate insol- application or after filing but before effectiveness of the IBC,” IBBI chair-
vency resolution process with a admission, to avoid consequences of person said. The corporate insolven-
default of ~10.22 lakh crore were with- the resolution process. cy resolution process for four finan-
drawn before admission. However, it is still taking 679 days cial service providers has resulted in
The latest newsletter said thou- on average to conclude the resolution the realisation of 41 per cent of the
sands of debtors are resolving dis- process, as against the standard time- admitted claims, IBBI said.