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NCLT

Policy & Regulation · Insolvency & corporate law

What it is

The National Company Law Tribunal is the adjudicating authority under the Insolvency and Bankruptcy Code, 2016. A financial (Sec 7) or operational creditor (Sec 9) can petition on a proven default; on admission the board is suspended, a resolution professional takes over and a Sec 14 moratorium halts recovery

A resolution plan needs 66% CoC approval and tribunal sanction, failing which the company is liquidated

Impact on industries

  • A low bar for admission - Supha Pharmachem on a Rs 7.47 cr default (Mar 2026) and Vivimed Labs on Rs 2.79 cr (Apr 2026) - so modest dues can end promoter control
  • Equity is usually written down to near nil in a resolution, making admission effectively terminal for minority shareholders
  • Bites hardest in sub-scale, leverage-stressed cohorts: small pharma, legacy EPC contractors and single-project developers
  • The moratorium preserves the business as a going concern and can transfer assets to a better-capitalised owner rather than liquidating them

Industries affected

Pharmaceuticals-Small-Regular-Traded Pharmaceuticals-Small-Trade-to-Trade & SME Shells Civil Infra-Heavy & Diversified EPC Realty-Small (Active Developers)-Regular-Traded Realty-Small (Active Developers)-Trade-to-Trade & SME Shells

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