Time to resolve insolvencies in India

• Main Authors: Bhatia, Surbhi, Singh, Manish, Zaveri, Bhargavi
• Other Authors: YSI Asia Convening 2019
• Format: Conference or Workshop Item
• Language: English
• Published: H. : ĐHKT 2020
• Subjects: Bankruptcy regime; Bankruptcy Code; Insolvencies; India
• Online Access: http://repository.vnu.edu.vn/handle/VNU_123/70561
• Institution: Vietnam National University, Hanoi

In this paper, we examine the response of litigating parties to a changing bankruptcy regime in India. We look at the caseload of the National Company Law Tribunal (NCLT) pertain- ing to the Insolvency and Bankruptcy Code (IBC) passed in May 2016. A year into the working of the Code allows us to assess its performance by estimating time taken to resolve insolvencies in India. Using survival models, we estimate the probability of case completion for cases before the NCLT benches with the highest workload. We nd that the probability of seeing an outcome within 180 days from the date of admission is less than 5%. However, it picks up once the 180 day deadline is passed. Within 270 days, the chances of case closure are between 10 to 30% depending on the bench and case characteristics (e.g., creditor type). We observe high closure rate just past the 270 day period. Within 360 days of admission, the probability of seeing an outcome is signi cantly higher (30 to 70%). Quicker outcomes (liquidation or resolution) are observed for resolution proceedings triggered by the debtors themselves. Similarly, proceedings triggered before some benches result in resolutions speed- ier than those before the others.