House Panel Recommends 90-Day Limit for NCLAT Orders to Strengthen IBC Framework

A parliamentary select committee has proposed a mandatory 90-day cap for the National Company Law Appellate Tribunal (NCLAT) to pass orders in insolvency appeals, aiming to restore the IBC’s time-bound character and reduce uncertainty for creditors and distressed companies. The recommendation was tabled in a report led by BJP MP Baijayant Panda.

The committee also urged measures to curb liquidation bias, including preventing resolution professionals from becoming liquidators in the same case to mitigate conflicts of interest—part of wider reforms accompanying the IBC (Amendment) Bill, 2025. Timely appellate decisions are positioned as critical to maintaining resolution momentum after NCLT admission and first-instance hearings.

Key highlights

- 90-day appellate cap: NCLAT should pass orders within three months to contain delays and preserve IBC’s time-bound framework.

- Efficiency focus: Undue appellate delays risk undermining certainty in insolvency resolution and creditor recoveries.

- Curbing liquidation bias: Resolution professionals should be barred from becoming liquidators in the same matter.

- Complementary reforms: Builds on admission timelines at NCLT and seeks stronger guardrails for market discipline and process integrity.

Sources: The Financial Express; Mint