The government on Friday notified provisions for fast-track resolution of insolvency proceedings. Under this code, insolvency proceedings will be completed in 90 days.
The adjudicating authority, which is the National Company Law Tribunal (NCLT), may extend the period of 90 days by a further period of up to 45 days for completion of the process. Unlisted companies with total assets up to Rs 1 crore can use this section of the code for faster exits and resolution. This move will benefit the start-up community in a big way.
A creditor or a corporate debtor may file an application, along with the proof of the existence of default, to the NCLT for initiating the fast-track resolution process. After the application is admitted and the interim resolution professional (IRP) is appointed, if the IRP is of the opinion, based on the records of the corporate debtor, that the fast-track process is not applicable to the corporate debtor, he shall file an application before expiry of 21 days from the date of his appointment before the adjudicating authority to pass an order to convert the fast-track process into a normal corporate insolvency resolution process.