Stressing the need to restore speed and certainty to India’s insolvency framework, a Select Committee of Parliament has recommended a three-month upper limit for the National Company Law Appellate Tribunal (NCLAT) to pass its orders.

In a report tabled in the House on Wednesday, the 24-member panel headed by BJP leader Baijayant Panda warned that delays at the appellate stage risk eroding the effectiveness of the Insolvency and Bankruptcy Code (IBC), which is built on a strict, time-bound resolution process.

The proposal, if accepted, will mark an extension of the time limits for insolvency decisions to the appellate body.

The IBC (Amendment) Bill has proposed deadlines for the National Company Law Tribunal (NCLT) such as a 30-day limit for disposal of liquidation orders, and 30 days to dispose of applications for withdrawal of admitted cases. The Bill also proposes a timeline of 14 days for the NCLT to admit or reject an application for the commencement of the resolution process. However, there is no prescribed time limit for NCLT to approve or reject a resolution plan.

The average time to conclude a resolution process under the Insolvency and Bankruptcy Code (IBC) is on a rise. According to official data, it took 603 days to complete 1,300 corporate insolvency resolution processes (CIRP) in the July-September 2025 quarter, which is higher than 582 days in the corresponding quarter last year. This is way above the 330-day limit set to conclude the process. As per the latest report from the Insolvency and Bankruptcy Board of India (IBBI), the 2896 CIRPs, which ended up in orders for liquidation, took an average 518 days to complete, up from 505 days in the same quarter last year.

Official sources said that the final Bill which could incorporate the recommendations of the select committee will likely be presented in the Budget session.

Meanwhile, the panel has also sought to tweak the definition of “resolution plan” to allow for one or more plans for a company undergoing bankruptcy proceedings. This change has been suggested to maximise the value for a company undergoing bankruptcy proceedings.

In addition, the committee has suggested codification of the basic tenets of the cross-border insolvency framework within the IBC law itself to provide clear legislative guidance for the central government and address judicial concerns.