IBC 2016, CIRP & Creditor AdvisoryNCLT & Insolvency in India
Corporate insolvency in India is governed by the Insolvency and Bankruptcy Code 2016 — a framework that gives operational and financial creditors a fast, time-bound route to debt resolution or liquidation through the National Company Law Tribunal. For creditors, the IBC is among the most powerful debt recovery tools available in India. For distressed companies and their shareholders, it presents both risk and restructuring opportunity. ATB Legal advises financial creditors, operational creditors, corporate debtors, and resolution applicants across all stages of IBC proceedings.
The IBC shifted power decisively towards creditors in India. A financial creditor with a default of at least Rs 1 crore can initiate a process that results in the resolution or liquidation of a corporate debtor within 270 days, if the process is managed correctly from the first filing.
NCLT & Insolvency: Our Advisory Services
CIRP — Corporate Insolvency Resolution Process
The Insolvency and Bankruptcy Code 2016 establishes a time-bound Corporate Insolvency Resolution Process (CIRP) for the resolution of corporate debt defaults. A financial creditor may file an application before the National Company Law Tribunal (NCLT) on proof of a default of Rs 1 crore or more. The NCLT must admit the application within 14 days if the debt and default are established. On admission, a moratorium is declared, the management of the corporate debtor is transferred to an Interim Resolution Professional, and the 180-day CIRP timeline begins, extendable to 270 days. The moratorium stays all suits, executions, and recovery proceedings against the debtor during the CIRP, making early engagement by creditors critical. ATB Legal advises operational and financial creditors on the CIRP application, filing strategy, and management of proceedings from initiation through to the Committee of Creditors.
Operational Creditors — Demand Notice and NCLT Application
Operational creditors — suppliers, service providers, and other trade creditors — must first issue a demand notice and allow the corporate debtor 10 days to either pay or dispute the debt before filing before the NCLT. A pre-existing dispute regarding the debt is a ground for rejection of the application, making the demand notice process critical. For GCC-based creditors supplying goods or services to Indian companies, the operational creditor route provides a meaningful lever for debt recovery that bypasses the slower civil court execution route. ATB Legal advises operational creditors on the demand notice process, the admissibility of the NCLT application, and representation where the debtor contests the application.
Committee of Creditors — Rights, Voting and Resolution Plans
Once a CIRP is admitted, the Committee of Creditors — comprising all financial creditors by their verified claim value — governs the insolvency process. The Committee approves or rejects resolution plans (requiring 66% vote), decides on CIRP timeline extensions, and votes on liquidation where no viable plan is received. Financial creditors with larger claims have proportionately greater voting weight and therefore greater influence over the outcome. ATB Legal advises financial creditors on their rights and obligations as members of the Committee of Creditors — claim verification, resolution plan evaluation, and voting strategy. Where a resolution plan is received, ATB Legal reviews it against the IBC’s eligibility requirements and advises on the commercial and legal adequacy of the proposed terms.
Liquidation and Overseas Creditor Representation
Where no resolution plan is approved within the CIRP timeline, the corporate debtor proceeds to liquidation. The resolution professional realises assets and distributes the proceeds in the statutory waterfall — secured creditors rank ahead of unsecured creditors, who rank ahead of equity holders. For GCC-based creditors and shareholders of Indian companies in insolvency proceedings, participation in the CIRP and liquidation requires Indian counsel with working NCLT familiarity. ATB Legal represents overseas creditors and shareholders in NCLT proceedings, manages claim verification and Committee of Creditors voting rights, and advises on cross-border insolvency implications where related proceedings are running in other jurisdictions.
FAQFrequently Asked Questions- NCLT & Insolvency
What is the IBC and how does CIRP work?
The Insolvency and Bankruptcy Code 2016 establishes the Corporate Insolvency Resolution Process — a time-bound proceeding before the NCLT triggered by a default of Rs 1 crore or more. The CIRP runs for 180 days (extendable to 270), during which a Resolution Professional manages the corporate debtor and a Committee of Creditors governs the process. If no viable plan is approved, the debtor proceeds to liquidation.
Who can initiate a CIRP application and what is the threshold?
A financial creditor can file a CIRP application on proof of default of Rs 1 crore or more — no demand notice is required. An operational creditor must first issue a demand notice and allow 10 days for payment or dispute before filing. The corporate debtor itself may also file a voluntary CIRP application. On admission, a moratorium is declared and the Interim Resolution Professional takes over management.
What is the Committee of Creditors and what powers does it have?
The Committee of Creditors comprises all financial creditors by verified claim value. It approves or rejects resolution plans (requiring 66% vote), authorises CIRP timeline extensions, and decides on liquidation. Creditors with larger claims have proportionately greater voting weight. Creditors who fail to verify claims promptly risk exclusion from the Committee or dilution of their voting share.
Can a GCC-based creditor initiate or participate in Indian insolvency proceedings?
Yes. An overseas financial creditor — including a GCC-based bank, NBFC, or corporate lender — can file a CIRP application before the NCLT on proof of a debt and default meeting the threshold. Overseas operational creditors can use the demand notice and application route. Overseas financial creditor has the right to participate in the Committee of Creditors in proportion to their verified claim. Qualified consultants can represent overseas creditors in NCLT proceedings and manage the practical aspects of remote participation in the CIRP.
What happens to claims if the company goes into liquidation?
In liquidation, proceeds are distributed in a statutory waterfall: insolvency and liquidation costs first; then secured creditors and workmen’s dues for 24 months; then other employee dues; then unsecured financial creditors; then other dues; then preference shareholders; then equity. Unsecured creditors and equity holders frequently recover little or nothing, a fact reinforcing the importance of engaging actively in the resolution phase.
What is pre-packaged insolvency and who can use it?
Pre-packaged insolvency (PPIRP) is available to MSMEs — allowing a debtor to present a pre-negotiated resolution plan to the NCLT with 66% creditor agreement, without a full CIRP. The process runs for 120 days (extendable by 90 more).
Uncompromising Quality Why Clients Choose ATB Legal
- NCLT Practice: Direct representation before the National Company Law Tribunal — CIRP applications, admission hearings, Committee of Creditors participation, and resolution plan approvals managed by India-enrolled advocates with working familiarity with NCLT.
- Creditor Advisory: Financial and operational creditor advisory across the full CIRP lifecycle — from first default notice through claim verification, Committee of Creditors voting, and resolution plan evaluation.
- Overseas Creditor Representation: GCC-based banks, corporate lenders, and shareholders in Indian insolvency proceedings represented by the same dual India-UAE team — without the coordination costs of separate local counsel.
- Resolution Plan Review: Resolution plan analysis for creditors by evaluating commercial adequacy, IBC eligibility compliance, and the waterfall implications of accepting or rejecting a proposed plan.
- Cross-Border Insolvency: Advisory on the Indian insolvency implications of parallel proceedings in other jurisdictions — particularly relevant for GCC creditors of Indian companies with multi-jurisdictional debt structures.
Meet The Core Team
Our Team of
Lawyers and Experts
LLB, LLM, FCIArb
Asha Treesa Bejoy
LLB
Jose Joseph
LLB
Jerome Jose
LLB
Aeron Abraham Thomas
LLB
Mathew Jones
Micro Case Studies
Representative Experience
Financial Creditor — CIRP Application and CoC Representation
Advised a GCC-based financial institution on initiating a CIRP application before the NCLT against an Indian borrower company following a payment default exceeding Rs 5 crore. ATB Legal prepared the application, managed the admission hearing, registered the creditor's claim with the Interim Resolution Professional, and represented the creditor as a voting member of the Committee of Creditors, advising on resolution plan evaluation and voting strategy on competing bids.
Operational Creditor — Demand Notice and NCLT Application
Advised a GCC-based industrial equipment supplier on recovering an unpaid trade debt from an Indian buyer. ATB Legal issued the statutory demand notice, managed the 10-day period, and on the debtor's failure to pay or raise a credible dispute, filed an NCLT application. The application resulted in CIRP admission and the debtor's subsequent settlement of the full outstanding amount.
Corporate Debtor — Defence and Resolution Plan Support
Advised the Indian subsidiary of a GCC manufacturing group facing a CIRP application by a financial creditor. ATB Legal assessed the admissibility of the application, filed a response disputing the claimed default on documentary grounds, and after CIRP admission, advised management on the resolution plan preparation process and the terms on which a viable plan could be presented to the Committee of Creditors.
Advised a GCC-based financial institution on initiating a CIRP application before the NCLT against an Indian borrower company following a payment default exceeding Rs 5 crore. ATB Legal prepared the application, managed the admission hearing, registered the creditor's claim with the Interim Resolution Professional, and represented the creditor as a voting member of the Committee of Creditors, advising on resolution plan evaluation and voting strategy on competing bids.
Operational Creditor — Demand Notice and NCLT Application
Advised a GCC-based industrial equipment supplier on recovering an unpaid trade debt from an Indian buyer. ATB Legal issued the statutory demand notice, managed the 10-day period, and on the debtor's failure to pay or raise a credible dispute, filed an NCLT application. The application resulted in CIRP admission and the debtor's subsequent settlement of the full outstanding amount.
Corporate Debtor — Defence and Resolution Plan Support
Advised the Indian subsidiary of a GCC manufacturing group facing a CIRP application by a financial creditor. ATB Legal assessed the admissibility of the application, filed a response disputing the claimed default on documentary grounds, and after CIRP admission, advised management on the resolution plan preparation process and the terms on which a viable plan could be presented to the Committee of Creditors.
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ATB Legal advises financial creditors, operational creditors, corporate debtors, and resolution applicants in IBC proceedings before the NCLT.