New Delhi: Creditors to nearly 7,000 companies are waiting for the National Company Law Tribunal (NCLT) to decide on whether to admit these companies for bankruptcy resolution, LiveMint quoted an authority in the know of things.

At present, there are 2,001 cases which are being heard by various benches of the tribunal. Between 2016 and September 2023, the tribunal closed 5,057 cases. Of the 5,057 cases, the tribunal approved resolutions in 15.9% of cases; in 39.5% of cases, the resolution was either settled or withdrawn, and liquidation was ordered in the case of 44.4% cases.

Besides staff crunch, a Supreme Court's ruling of July 2022 is also making it difficult for the creditors for a bankruptcy rescue, another source told the newspaper.

Most of the companies (about two-thirds) waiting for NCLT's decision concerning the admission of bankruptcy petitions fall in the manufacturing, real estate, and trading businesses sectors, indicating the prevailing stress in the economy.

In an earlier case concerning Vidarbha Industries Power Ltd and Axis Bank Ltd, the Supreme Court had ruled that the existence of debt and its default does not automatically mean the case has to be admitted for bankruptcy resolution.

The top court had said that it was wrong on the part of NCLT and its appellate tribunal to hold a view that if a corporate debtor was in default of payment, there would be no option for the tribunal but to admit it for a bankruptcy resolution. This, the above-cited source, said it prompted the NCLT to admit more bankruptcy resolution cases.

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