NCLT Lawyers in Ahmedabad: Insolvency & Bankruptcy (IBC) Representation Across India

On this page

→  Who we represent before NCLT

→  How proceedings are initiated and conducted

→  What the firm does at each stage

→  Issues outside the Code that decide outcomes

→  How CIRP interacts with sector regulation

→  Frequently asked questions

→  Related services

Who does R & D Law Chambers represent before NCLT?

Overview

The Insolvency and Bankruptcy Code, 2016 (IBC) was enacted to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms, and individuals in a time-bound manner. It replaces multiple earlier laws such as the Sick Industrial Companies Act and winding-up provisions under the Companies Act. It also serves as a framework that foreign creditors can access for claims against Indian debtors, subject to procedural compliance.

For corporate entities, including companies and LLPs, the IBC provides a single forum and uniform process for insolvency resolution through the National Company Law Tribunal (NCLT), with appeals lying to the National Company Law Appellate Tribunal (NCLAT).

The Code envisages two primary objectives:

• Maximisation of value of assets of the debtor, and

• Balancing the interests of all stakeholders, including creditors, employees, and shareholders.

Applicability and Forum

• Proceedings for corporate insolvency can be initiated by a financial creditor, operational creditor, or the corporate debtor itself under Sections 7, 9, or 10 of the IBC respectively.

• The minimum default for initiating corporate insolvency is ₹1 crore under Section 4 of the IBC.

• The jurisdiction depends on the registered office of the corporate debtor. For example, matters relating to entities based in Gujarat are heard by NCLT Ahmedabad, while others may fall before benches in Delhi, Mumbai, Chennai, or other notified locations. This means a creditor based anywhere in India, or abroad, proceeds before NCLT Ahmedabad if the corporate debtor’s registered office is in Gujarat.

• The process is pan-India in scope: procedural rules and substantive provisions remain uniform across all benches.

Process Snapshot

The corporate insolvency resolution process (CIRP) under the IBC typically involves:

• Section 7: Financial creditors (banks, NBFCs, bondholders) may initiate proceedings upon proof of default. No prior notice to the debtor is
  required and the application is filed directly before NCLT. Since 26 May 2026, section 7(5) as substituted by the Insolvency and Bankruptcy
  Code (Amendment) Act, 2026 requires the Tribunal to admit or reject the application within fourteen days and to record its reasons in writing
  if it does not. Where a default has occurred and the application is complete, no other ground may be considered for rejecting it. Before
  rejecting an application for a defect, the Tribunal must give the applicant seven days to cure it. A record of default held with an information
  utility is sufficient proof, but only where the debt is owed to a financial institution and the record is filed by that institution.

• Appointment of Interim Resolution Professional (IRP): Oversees management of the corporate debtor and forms the Committee of Creditors (CoC).

• Moratorium Period (Section 14): Suspends all pending suits, enforcement of security interest, and recovery proceedings to allow a standstill
  for resolution.

• Invitation and Evaluation of Resolution Plans: CoC evaluates competing plans to decide on revival through approval of plan or liquidation.

• Liquidation: If no plan is approved within statutory timelines, the debtor goes to liquidation.

Timelines

• The IBC prescribes a statutory period of 180 days, extendable by 90 days, for completion of the CIRP, with a further special extension in certain cases.

• In practice, timelines may vary due to litigation or complex creditor structures, but NCLT closely monitors compliance.

• The gap between statute and practice is real: according to ICRA’s May 2026 analysis of IBBI data, the average time to resolution stood at 744 days as on 31 March 2026, against the statutory outer limit of 330 days, while recoveries in resolved cases averaged approximately 31% of admitted claims compared with roughly 4% in liquidation. For creditors, the data point in one direction: early, well-prepared initiation and active participation in the process protect recovery value. For corporate debtors, the same figures underscore why resisting an ill-founded petition at the admission stage matters.

How are insolvency proceedings initiated and conducted under the IBC?

Legal Framework & Key Provisions

The Insolvency and Bankruptcy Code, 2016 operates as a complete code in itself for corporate insolvency and liquidation, with the following key features that influence how matters are planned and conducted:

Initiation of Proceedings

• Section 7: Financial creditors (banks, NBFCs, bondholders) may initiate proceedings upon proof of default. No prior notice to the debtor is required and the application is filed directly before NCLT. Since 26 May 2026, section 7(5) as substituted by the Insolvency and Bankruptcy Code (Amendment) Act, 2026 requires the Tribunal to admit or reject the application within fourteen days and to record its reasons in writing if it does not. Where a default has occurred and the application is complete, no other ground may be considered for rejecting it. Before rejecting an application for a defect, the Tribunal must give the applicant seven days to cure it. A record of default held with an information utility is sufficient proof, but only where the debt is owed to a financial institution and the record is filed by that institution.

• Section 9: Operational creditors (suppliers of goods and services, employees) must first serve a demand notice and allow 10 days for the debtor
  to pay or raise a dispute. Since 26 May 2026, section 215(3) additionally requires an operational creditor to submit the financial information
  relating to the debt to an information utility before filing under section 9. The corporate debtor must authenticate that information within the
  specified period, failing which it is deemed authenticated. The pre-existing dispute test is unchanged: a genuine dispute raised before the
  demand notice still defeats admission.

• Section 10: Corporate Debtors may voluntarily seek admission into the insolvency process, often as a strategic decision to reorganise debts.

Moratorium (Section 14)

• Upon admission, a moratorium is imposed, prohibiting institution or continuation of suits and proceedings, transfer or disposal of assets,
  enforcement of security interests, and recovery of property by owners or lessors. Since 26 May 2026 it also applies where a surety seeks
  to initiate or continue proceedings against the corporate debtor under a contract of guarantee.

• The moratorium creates breathing space for the debtor and allows creditors to consider revival options without asset-stripping.

Role of Insolvency Professionals

• An Interim Resolution Professional (IRP) takes over the management from the board of directors.

• Within 30 days, the IRP forms the Committee of Creditors (CoC), which assumes decision-making authority over the debtor’s affairs.

• The IRP may be replaced by a Resolution Professional (RP), who runs the CIRP until resolution or liquidation.

Committee of Creditors (CoC)

• Composed solely of financial creditors, the CoC decides on: approval of resolution plans; replacement of IRP/RP; and key commercial decisions.

• Approval requires 66% voting share.

Resolution Plan & Liquidation

• A resolution plan may involve debt restructuring, equity infusion, or sale of assets.

• If no plan is approved within statutory timelines, liquidation is initiated under Chapter III of Part II of the IBC. The 2026 amendments changed
  this stage substantially. The Committee of Creditors now supervises the liquidator, the resolution professional from the CIRP cannot be
  appointed liquidator for the same corporate debtor, and liquidation must be completed within 180 days, extendable by a further 90.
  Before ordering liquidation the Tribunal may, on a 66 per cent vote of the Committee of Creditors, restore the CIRP once for a period
  of up to 120 days. The Committee may alternatively resolve, on a 66 per cent vote, to have the corporate debtor dissolved directly.
  Appeals to the NCLAT must now be disposed of within three months.

   

Special Provisions

• Section 29A: Restricts certain persons (including promoters in default) from submitting resolution plans.

• Section 12A: Allows withdrawal of an admitted insolvency application, on an application made by the resolution professional with
  the approval of 90 per cent of the Committee of Creditors voting share. Since 26 May 2026, withdrawal is not permitted
  before the Committee of Creditors has been constituted, nor after the first invitation for resolution plans has been issued.
  The Tribunal must decide a withdrawal application within thirty days.

• Section 238: Grants IBC overriding effect over other laws, subject to constitutional and public policy limitations.

Cross-Border Elements

• Sections 234 and 235 provide for agreements with foreign countries and for Indian tribunals to issue letters of
  request to foreign courts and authorities. Neither section has been brought into force, and no agreement has been
  concluded under section 234.

  The Insolvency and Bankruptcy Code (Amendment) Act, 2026 inserted section 240C, which empowers the Central
  Government to make rules for recognising and coordinating cross-border insolvency proceedings. Section 240C has
  not been brought into force and no rules have been made under it.

  The practical position for foreign creditors is therefore unchanged. A foreign creditor comes to the NCLT as an ordinary creditor
  under section 7 or section 9, and cross-border matters continue to require case-specific strategies within the existing framework.

What does the firm do at each stage of an NCLT matter?

For Operational Creditors (Section 9 IBC)

• Drafting and issuance of demand notice in statutory Form 3 or Form 4 under Section 8(1) of the IBC.

• Conducting a detailed dispute assessment exercise: recognising that debtors almost invariably raise some form of objection, but evaluating whether such objection qualifies as a “pre-existing dispute” under Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd. or is merely specious. This approach is based on legal reasoning illustrated in our published Law Guide & Articles.

• Preparing the application with documentary proof of debt and default (invoices, delivery challans, bank statements), and structuring pleadings to pre-empt foreseeable debtor defences.
  
  Advising on the new penalty exposure. Since 26 May 2026, section 67C allows the Tribunal to impose a penalty of between one lakh and two crore rupees on an operational creditor who files under section 9 while concealing that the corporate debtor had notified a dispute, or had notified full and final payment of the debt. The dispute assessment is therefore no longer only about whether the petition will succeed.
  
  

• Example: A supplier of industrial machinery to a manufacturing unit in Ahmedabad issues a demand notice for ₹1.2 crore in unpaid invoices. The debtor responds with generic “quality issues” without contemporaneous records, assessed as illusory and petition pursued under Section 9.

For Financial Creditors (Section 7 IBC)

• Advising on statutory prerequisites and preparing the application in Form 1 with supporting records from the Information Utility (where available) to strengthen the claim.

• Assessing borrower defences based on limitation, debt restructuring agreements, or partial settlements.

• Representation in complex cases involving multiple tranches of lending, inter-creditor disputes, or parallel recovery proceedings under SARFAESI or before DRT (see also related work under Our Services in debt recovery).

• Example: A bank seeks initiation of CIRP for loan default. The borrower claims a debt restructuring MoU extended repayment timelines; however, no formal novation is found. Application proceeds under Section 7 with reliance on IU records.

For Corporate Debtors (Respondents in Section 7 or Section 9 Petitions)

• Strategic defence assessment to determine if the petition can be resisted at the admission stage.

Common grounds include:

• Pre-existing dispute, supported by contemporaneous correspondence, inspection reports, or ongoing litigation/arbitration (see related Arbitration Services for dispute-handling context).

• Limitation defence, showing the debt is time-barred and no valid acknowledgment revived it.

• Absence of locus standi, e.g., where the petitioner is not the lawful creditor or lacks due authorisation, whether application is preferred by a ‘person’ as defined under IBC etc.

• Statutory deficiencies, such as defective demand notice or missing annexures.

• Voluntary CIRP under Section 10 is generally avoided unless statutorily unavoidable due to long-term consequences.
  
  Penalty for a frivolous or vexatious petition. Section 64A, in force from 26 May 2026, allows the Tribunal to impose a penalty of between one lakh and two crore rupees on a person who initiates frivolous or vexatious proceedings under Part II of the Code.
  
  

• Example: A software development company produces arbitration pleadings filed months prior to demand notice, demonstrating genuine pre-existing dispute, leading to rejection at admission.

For Insolvency Professionals (IRPs and RPs)

• Advising IRPs/RPs on compliance with IBC, CIRP Regulations, and judicial directions.

• Drafting and defending applications relating to claims, extension of CIRP period, or replacement of RP.

• Representation in challenges to CoC decisions and resolution plan approval.

• Example: An RP faces objections regarding claim classification; representation shows adherence to regulations and precedent, resulting in dismissal of objections.

For Resolution Applicants

• Advising on eligibility under Section 29A and conducting due diligence on the debtor’s financial, contractual, and litigation status.

• Drafting resolution plans compliant with Section 30(2) and CIRP Regulations.

• Representation before CoC during plan negotiation and before NCLT for plan approval.

• Example: A resolution applicant proposes revival of a distressed steel manufacturing company via equity infusion and debt restructuring, securing 66% CoC approval and NCLT sanction.

Committee of Creditors (CoC) Interactions

• Advising on voting thresholds (Sections 28, 30, 33) and procedural compliance.

• Drafting/reviewing agendas, minutes, and resolutions to ensure enforceability.

• Assisting in negotiations with resolution applicants to maximise recovery within statutory timelines.

• Example: CoC faces competing resolution plans for an infrastructure company; evaluation is based on Section 30(2) compliance and commercial considerations before voting.

Which issues outside the Code decide insolvency outcomes?

Environmental Clearances and Labour/Employee Claims

This position changed on 26 May 2026. Section 31(5), inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2026, provides that a licence, permit, registration, quota, concession or clearance associated with an approved resolution plan is not to be suspended or terminated for the remainder of its term, provided the obligations attaching to it are complied with. Section 31(6) extinguishes claims against the corporate debtor and its assets arising before approval, unless the plan provides otherwise, and bars proceedings on those claims, including assessment proceedings. Both apply to plans approved from the commencement of the Code, except where a matter has already attained finality. During the CIRP itself, the resolution professional continues to maintain compliance and to apply for renewals in the ordinary way.

Preservation and Treatment of Intellectual Property (IP)

Intellectual property, such as trademarks, patents, and proprietary technology, often forms a substantial portion of a distressed company’s value. Under CIRP, the resolution professional (RP) is tasked with preserving the company as a “going concern” under Section 20 of the Code. This includes ensuring that IP registrations are maintained, renewal fees are paid, and enforcement actions for infringement continue where necessary. For resolution applicants, this may involve incorporating IP protection strategies into the resolution plan to maintain competitive advantage post-acquisition.

In liquidation, IP may be sold as part of the asset pool under Regulation 32 of the Liquidation Process Regulations, provided it is transferable and not inextricably tied to personal skill or restricted by contract. Buyers of such IP may include industry competitors or investors looking for technology-driven assets. We advise stakeholders, whether RP, RA, or purchaser, on the legal, contractual, and regulatory considerations involved in such transactions.

Foreign Creditors and Cross-Border Insolvency Considerations

While India has yet to adopt a comprehensive cross-border insolvency framework (such as the UNCITRAL Model Law), the IBC does permit foreign creditors, financial or operational, to initiate proceedings against Indian corporate debtors, provided their claims are supported by the documentary evidence prescribed under the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Such documents may include invoices, contracts, or other proof of default; they need not necessarily be based on a court decree or arbitral award.

However, where a foreign creditor seeks to rely on a decree from a non-reciprocating territory (as defined under Section 44A of the CPC), that decree cannot be executed directly in India. It can only form the basis of a fresh suit, which may not be efficient in the insolvency context. In such cases, unless the underlying contract or payment default can be evidenced through documents meeting IBC Rule requirements, the creditor may face limitations in directly filing under Sections 7 or 9.

Foreign creditors must also comply with procedural requirements, such as providing a local address for service and, where necessary, executing powers of attorney or authorisations in accordance with Indian law. This is an area where close coordination between international counsel and Indian insolvency lawyers is critical.

How does CIRP interact with sector-specific regulation?

Industries and Transactions Covered

Insolvency and restructuring matters under the IBC cut across sectors, and each industry presents its own legal and commercial challenges. The following illustrations reflect scenarios where CIRP or liquidation may interact with sector-specific regulations or contractual frameworks. Where legal positions are not entirely settled, it is indicated accordingly.

Manufacturing and Supply Contracts. Where the corporate debtor has pending supply obligations, especially under government or strategic procurement contracts, the Resolution Professional (RP) may, during CIRP, seek interim directions from the NCLT to preserve the contract and prevent termination due to insolvency. Ultimately, the Resolution Applicant (RA) may include continuation or assignment of such contracts as a relief sought in the resolution plan. Unlike certain statutory licences, such contracts may be continued if NCLT deems it essential for value maximisation.

Infrastructure and Highway Development. For highway or large infrastructure projects, continuity of concession agreements and maintenance obligations is critical. Interim applications are typically moved by the RP to maintain project viability; final reliefs for continuation or restructuring of such agreements are addressed by the RA in the resolution plan. The law is still evolving on the scope of NCLT’s powers to grant such reliefs vis-à-vis government or statutory contracts.

Environmental Clearances and Regulatory Licences. Regulatory approvals, environmental, pollution control, mining licences, often cannot be unilaterally extended or revived by NCLT orders. The RP may maintain compliance and apply for renewals during CIRP, but long-term continuity will generally depend on whether the RA satisfies regulatory criteria. In some instances, NCLT has granted interim protection; however, the scope of such jurisdiction remains debatable.

Financial Service Providers (FSPs). Under current IBC provisions, corporate insolvency proceedings against notified FSPs are subject to a special framework prescribed by the Central Government. This does not restrict FSPs themselves, such as NBFCs or housing finance companies, from initiating proceedings as creditors under section 7 of the IBC. However, proceedings against FSPs require adherence to the specific FSP Rules.

Intellectual Property (IP) in CIRP. IP assets, patents, trademarks, copyrights, can be preserved during CIRP and transferred under the resolution plan. The RP may take interim measures to safeguard IP from lapse (such as renewing registrations), while the RA may propose acquisition, licensing, or monetisation strategies. In liquidation, IP can be sold as part of the asset sale process if it is transferable under applicable IP law.

Public-Private Partnership (PPP) and Concession Projects.
For PPP models such as metro rail, port development or special economic zones, continuity of the concession agreement is the central commercial question. During the CIRP the resolution professional may seek interim relief to maintain the status quo. On approval of a resolution plan, section 31(5) now provides statutory protection, in that a concession or similar grant associated with the plan is not to be suspended or terminated for the remainder of its term where the obligations attaching to it are complied with. Whether that protection reaches a concession which the public authority had already validly terminated before the plan was approved remains open.

Cross-Border Creditors and International Aspects. Foreign creditors can initiate insolvency proceedings in India if they meet the definition of “financial” or “operational” creditor under the IBC and hold evidence of debt in the prescribed form (such as contracts, invoices, or awards). A foreign decree from a non-reciprocating territory under the CPC is not directly enforceable in India; it can only serve as a cause of action for a fresh suit and does not by itself satisfy the IBC’s evidentiary requirements. In such cases, the creditor would need alternative documentary proof as specified under the IBC and its rules. Cross-border insolvency recognition in India is still at a developing stage, as the UNCITRAL Model Law has not yet been formally adopted.