NCLT to admit insolvency cases only on proof of debt, default under amended IBC

Legal experts said the amended Insolvency and Bankruptcy Act, 2026 requires proof of both debt and default before the NCLT admits insolvency cases. The amendments also introduce changes to resolution processes, liquidation rules and Competition Commission approval requirements

New Delhi: The National Company Law Tribunal (NCLT) will admit a case only if the twin major requirements of ‘debt’ and ‘default’ are established under the Insolvency and Bankruptcy (Amendment) Act 2026, legal experts said on Friday.

The new features of the amended act, along with the competition law, were discussed at a media roundtable on Insolvency and Bankruptcy Code and Competition Law in India organised by law firm Khaitan and Co.

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Prateek Kumar and Siddharth Srivastava, both partners in the firm, said according to the amended provisions, a security interest can only be created by an agreement or arrangement by the act of two or more parties and that “Debt and Default are major determinants for admission of a case into the NCLT.” Srivastava said the stakeholder consultation committee had been abolished, a resolution plan may be approved by the NCLT in two phases of implementation and distribution, and that the Corporate Insolvency Resolution Process (CIRP) restoration had been introduced before initiation of liquidation.

He also said the amended provisions had barred the resolution professional from acting as the liquidator of the same corporate debtor, that Competition Commission of India (CCI) approval had to be obtained before the resolution plan was submitted to the adjudicating authority, and the committee of creditors had to record the reasons while approving a resolution plan.

Kumar said certain provisions of the amended act had not yet come into force. These included the conceptualisation of the cross-border insolvency framework and the concept of Creditor Initiated Insolvency Resolution Process (CIIRP), involving out-of-court insolvency initiation and absence of automatic moratorium.

Pranjal Prateek, also a partner, discussed the competition law, saying 2025 was the most active year in “merger control” to date, and the approval timelines by the CCI continued to shrink.

He said the Supreme Court in the present year set aside a Rs 202-crore penalty by CCI on Amazon in connection with the 2019 Future Coupons deal.

The apex court held that mischaracterisation of a transaction is not the same as non-notification; the CCI cannot ask to refile after expiry of one year; CCI cannot ask for fresh notification after providing an unconditional approval, and where a notice has been filed and approved, the CCI cannot state there has been a failure to notify, he said. “The CCI disposed of 59 cases in 2024-25. It found contravention only in four cases; 39 cases were dismissed at the prima facie stage,” he said.