Q: What is the time period for the completion of insolvency resolution process ?

Ans: As per Section 12 of IBC, the insolvency resolution process will have to be completed within the time period of 180 days counted from the date of admission of the application under the Code. However, the NCLT can extend the time period of the insolvency resolution process by 90 days in addition to the 180 days. This extension of a maximum of 90 days can be granted by NCLT on the filing of an application by the resolution professional. The resolution professional can file an application to NCLT for extension only if a resolution is passed at a meeting of the committee of creditors by a vote of 66% of the voting shares

Section 12 was further amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2019. Now, Section 12 of the Code mandates that the CIRP of a Corporate Debtor must conclude within 330 days from the insolvency commencement date. This period of 330 days includes: (a) normal CIRP period of 180 days; (b) one-time extension, if any, up to 90 days of such CIRP period granted by the Adjudicating Authority; and (c) the time taken in legal proceedings in relation to the CIRP of the Corporate Debtor.

In Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta & Ors., the Supreme Court struck down the word 'mandatorily and held that Section 12 is rather required to be read to state that the corporate insolvency resolution process should "ordinarily be completed within 330 days, including the extensions and time taken in legal proceedings. It further observed that any further extension may be granted only if it can be shown that only a short period is left for completion of the insolvency resolution process beyond 330 days. The Supreme Court also noted that such extension should be given only when the time taken in legal proceedings is largely due to factors that cannot be ascribed to the litigants, and where the delay or a large part thereof is attributable to the tardiness of the NCLT or NCLAT itself.

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