IBC Insolvency Matters | CIRP & NCLT Support, Mumbai CA

Insolvency & Restructuring

Insolvency and Bankruptcy Matters
The IBC After the 2026 Amendment

CIRP applications, claim filing, resolution plans, liquidation and the 2026 amendment changes — mandatory admission, group and cross-border insolvency, and greater committee control over liquidation.

Part of our insolvency practice: Interim Resolution Professional Resolution Professional Liquidator Services Voluntary Liquidation

Overview

What Does the IBC Actually Do?

Before 2016, an Indian creditor facing a defaulting company had several remedies and no coherent process. Secured lenders enforced security under SARFAESI. Banks pursued recovery before Debt Recovery Tribunals. A sick industrial company went to the BIFR, where the moratorium was widely used to hold creditors at bay for years. Winding up went to the High Court. The remedies competed with one another, and asset value dissipated while they did.

The Insolvency and Bankruptcy Code, 2016 replaced that with a single, time-bound, creditor-driven process. Its central design choice was to shift control from the defaulting management to the creditors on the day proceedings are admitted, and to give the process a deadline. Gross non-performing assets in the public sector banking system fell from around 14.5% in 2016 to roughly 2% by 2025.

      The Code has now been substantially rewritten. The Insolvency and Bankruptcy Code (Amendment) Act, 2026 received assent in April 2026 and most of its provisions took effect on 26 May 2026 — the most substantial revision of the Code since 2016. N D Savla & Associates advises creditors, corporate debtors, promoters and resolution applicants across Mumbai, Navi Mumbai, Thane and Goa on proceedings under the amended Code, and provides resolution professional and liquidator services where appointed.
    

For a company, the process is the corporate insolvency resolution process (CIRP). It can be triggered by a financial creditor under Section 7, an operational creditor under Section 9 after a demand notice, or by the corporate debtor itself under Section 10. On admission, four things happen at once: a moratorium under Section 14 halts all proceedings against the company, the board is suspended, an interim resolution professional takes control, and creditors are invited to submit claims. The Code is not a recovery statute — its object is resolution of the company as a going concern where that produces more value than liquidation.

The 2026 Amendment

What Changed in the 2026 Amendment?

The Insolvency and Bankruptcy Code (Amendment) Bill, 2025 was introduced in the Lok Sabha on 12 August 2025, referred to a Select Committee, passed in early 2026, and received assent in April 2026. Because commencement is staged and supporting regulations continue to be issued, the position applicable to a specific proceeding depends on when it was initiated.

Area	Position Under the Amended Code
Admission of applications	Mandatory admission where debt and default are established and no disciplinary proceeding is pending against the proposed IRP
Creditor-initiated resolution	A creditor-initiated process operating largely out of court, with the debtor remaining in possession
Group insolvency	A statutory framework for connected corporate debtors within a group
Cross-border insolvency	Enabling power for recognition, relief, cooperation and coordination with foreign proceedings
Avoidance transactions	Look-back window expanded to two years
Liquidation control	Committee of creditors empowered to appoint or remove the liquidator; liquidator's claim-admission powers curtailed
Statutory dues	Clarified as not carrying the status of secured creditors
Frivolous proceedings	Monetary penalties introduced for frivolous applications
Electronic administration	Enabling power for a central electronic portal for IBC procedures

By Stakeholder

How Do IBC Matters Differ Across Sectors?

Banks & Financial Creditors

Mandatory admission removes discretion-based delay, committee control over liquidation strengthens oversight, and the extended avoidance look-back widens recovery options.

Operational Creditors & Suppliers

The Rs 1 crore threshold excludes most trade creditors. For a supplier, the Code is generally more useful as leverage before a filing than as a recovery mechanism after one.

Real Estate & Home Buyers

Home buyers are financial creditors with committee representation, but large numbers and divergent interests make voting blocks difficult to organise.

Promoters & Corporate Debtors

Section 29A disqualification is decisive for any promoter hoping to retain the business. MSME promoters have a route through the pre-packaged process.

Our Services

How Does an Insolvency Proceeding Work — Step by Step?

Establish Debt, Default & Threshold

The default must exceed Rs 1 crore. A financial creditor proceeds under Section 7 with evidence of default. An operational creditor must first serve a demand notice under Section 8 and wait ten days — our demand notice consultation addresses the drafting, since a defective notice is the most common ground on which Section 9 applications fail.

File the Application & Secure Admission

Following the 2026 amendment, admission is mandatory where debt and default are established and no disciplinary proceeding is pending against the proposed professional, materially reducing admission-stage uncertainty.

Understand What Admission Triggers

The moratorium under Section 14 suspends all suits, execution, enforcement and recovery. The board stands suspended and the interim resolution professional assumes management. Promoters frequently underestimate how completely control passes.

File & Prove Claims

Creditors submit claims in the prescribed form with supporting evidence within the period stated in the public announcement. Claims filed late or without adequate evidence are the most common reason a creditor recovers less than expected.

Participate in the Committee of Creditors

The committee approves the resolution professional, information memorandum, and ultimately the resolution plan by a 66% vote. Two registered valuers determine fair value and liquidation value.

Examine Avoidance Transactions

Preferential, undervalued, extortionate and fraudulent transactions are reviewed with a look-back window now extended to two years. Recoveries here frequently exceed what the resolution plan delivers to unsecured creditors.
2-year look-back

Evaluate or Prepare Resolution Plans

Applicants must be eligible under Section 29A, which disqualifies defaulting promoters and connected persons. The committee must now record its reasons for selecting the successful applicant.

Obtain Sanction or Move to Liquidation

The approved plan goes to the Tribunal under Section 31 and, once sanctioned, binds all stakeholders on a clean-slate basis. Where no plan is approved, liquidation follows under Section 33. A solvent company seeking to close should use voluntary liquidation under Section 59 instead.

Why N D Savla & Associates

Why Choose N D Savla & Associates for IBC Matters?

We work under the amended Code

The 2026 amendment changed admission, liquidation control, avoidance windows and statutory dues treatment. We check which provisions applied when a given proceeding began.

Insolvency professional capability in-house

We act as interim resolution professional and liquidator where appointed, so advice comes from people who have run the process rather than only advised on it.

Forensic & valuation work in the same practice

Avoidance transactions and valuation are where recovery is actually generated. Our forensic accounting capability sits alongside the insolvency practice.

We tell operational creditors when the Code is the wrong tool

For many suppliers, an insolvency application is expensive and slow. Where that is the position, we say so and pursue the alternative that will actually work.

Six offices across Maharashtra and Goa

Andheri, Charni Road, Vashi, Thane, New Panvel and Panaji, with the Mumbai bench of the Tribunal covering Maharashtra and Goa.

Broader Practice

Our Broader Insolvency & Restructuring Services

Interim Resolution ProfessionalIRP appointment and management upon admission.

Resolution ProfessionalRunning the CIRP through to plan approval or liquidation.

Liquidator ServicesLiquidation under Section 33 where no plan is approved.

Voluntary LiquidationThe correct route for a solvent company seeking to close.

Demand Notice ConsultationSection 8 notice drafting for operational creditors.

NCLT Company Law MattersThe Tribunal's wider company law jurisdiction.

Corporate Litigation & RepresentationAdmission challenges, claim rejections and appeals.

Forensic Accounting & InvestigationAvoidance transaction review and recovery work.

Frequently Asked Questions

Common Questions on IBC Matters

What changed under the IBC (Amendment) Act, 2026?

The amending Act received Presidential assent in early April 2026 and most of its provisions came into force on 26 May 2026 — the most substantial revision of the Code since 2016. The principal changes are a creditor-initiated resolution process operating largely out of court, a statutory framework for group insolvency, an enabling power for cross-border insolvency, mandatory admission where default is established, an expanded avoidance look-back window, greater committee control over liquidation, and penalties for frivolous proceedings.

Does the NCLT have discretion to refuse admission where default is proved?

Substantially less than it did. The 2026 amendment requires the Tribunal to admit an application by a financial creditor where debt and default are established and no disciplinary proceeding is pending against the proposed IRP. This reverses the broader discretion read into the provision following the Vidarbha Industries decision and restores the mandatory-admission approach recognised earlier in Innoventive Industries.

What is the minimum default amount to trigger insolvency proceedings?

The threshold was raised from Rs 1 lakh to Rs 1 crore by notification in March 2020, and that higher figure remains the position for corporate insolvency. A creditor below the threshold must pursue recovery through other routes rather than through the Code.

How long does a corporate insolvency resolution process take?

The Code prescribes one hundred and eighty days, extendable by ninety days, with an outer limit of three hundred and thirty days including litigation time. In practice many processes have exceeded that limit, which is a principal reason the 2026 amendment reinforced timelines and introduced penalties for frivolous proceedings.

What happens to operational creditors in a resolution plan?

Operational creditors are entitled to receive at least the amount they would have received in a liquidation under the waterfall in Section 53, or the amount that would have been paid had the resolution plan amount been distributed under that waterfall, whichever is higher. Beyond that minimum, the commercial wisdom of the committee of creditors is not ordinarily open to judicial review — a principle established in the Essar Steel decision.

Facing or considering an IBC proceeding?

Talk to our insolvency team — CIRP applications, claim filing, resolution plan evaluation, and resolution professional or liquidator appointments under the amended Code.

Get in Touch

Insolvency and Bankruptcy MattersThe IBC After the 2026 Amendment