House panel moots 3-month deadline for NCLAT decisions

Warns against potential misuse of "clean state" norm by promoters

- MANU KAUSHIK

STRESSING THE NEED for a strict time-bound framework to improve the efficiency and utility of insolvency resolution, a Select Committee of Parliament has proposed a 3month upper limit for the National Company Law Appellate Tribunal (NCLAT) to pass its orders.

In a report tabled in the House on Wednesday, the 24member panel, headed by BJP leader Baijayant Panda, noted:“ ... given that the effectiveness of the IBC rests on a strict time-bound framework, we emphasise that undue appellate delays risk undermining the efficiency and certainty of the insolvency resolution process."

The proposal, if accepted, will mark an extension of the time limits for insolvency decisions to the appellate body.

The IBC (Amendment) Bill has proposed deadlines for the National Company Law Tribunal (NCLT) such as a 30-day limit for disposal of liquidation orders, and 30 days to dispose of applications for withdrawal of admitted cases.