Part II, Chapter II — Corporate Insolvency Resolution Process (CIRP)

How CIRP is triggered, the moratorium, the Committee of Creditors, and the 330-day resolution timeline.

Triggering CIRP

A financial creditor (Section 7), operational creditor (Section 9, after a 10-day demand notice under Section 8 goes unanswered/undisputed) or the corporate debtor itself (Section 10) may file an application before the NCLT once a default of at least the threshold amount (currently ₹1 crore, raised from ₹1 lakh by a 2020 notification) has occurred.

Admission and moratorium

On admission, NCLT declares a moratorium under Section 14 — suspending suits, execution of decrees, and enforcement of security interests against the corporate debtor for the CIRP period — and appoints an Interim Resolution Professional (IRP) who takes over management from the existing board.

Committee of Creditors (CoC)

The IRP collates claims and constitutes the CoC, composed of financial creditors voting in proportion to their debt (operational creditors participate only if they meet specified thresholds and generally without voting rights unless no financial creditors exist). The CoC appoints the Resolution Professional (RP), who may confirm or replace the IRP, and every material CIRP decision (resolution plan approval, extension of timeline, related-party dealings) requires the CoC's specified voting-share majority (66% for major decisions, 51% for routine ones).

Timeline

CIRP must complete within 330 days from the insolvency commencement date, including any extension and litigation time (Section 12, as read with the Essar Steel Supreme Court ruling) — a hard outer limit meant to prevent value erosion from indefinite process delay, though courts have permitted narrow exceptions in genuinely exceptional circumstances.

Resolution plan approval

A resolution plan approved by the CoC (66% voting share) is submitted to NCLT for approval under Section 31 — once approved, it binds the corporate debtor, all creditors, guarantors and other stakeholders, including those who dissented or did not participate, subject to the plan meeting the mandatory content requirements under Section 30(2) (priority of payment to operational creditors, statutory dues, etc.).

Educational summary of the Insolvency and Bankruptcy Code, 2016, its Regulations and case law as understood at review date 2026-07-18. Not a substitute for the official Code/Regulations text, current NCLT/NCLAT/Supreme Court rulings, or professional advice on a specific matter.

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