Corporate Insolvency Resolution Process (CIRP)

Corporate Insolvency Resolution Process (CIRP) is governed by the Insolvency and Bankruptcy Code, 2016 ("IBC"), and is initiated and adjudicated before the National Company Law Tribunal (NCLT).

Minimum default threshold: Under Section 4(1) of the IBC, read with Ministry of Corporate Affairs notification S.O. 1205(E) dated 24 March 2020, CIRP can be triggered only where the minimum amount of default is ₹1 crore or more (raised from the original ₹1 lakh threshold).

Who may initiate CIRP:

• Section 7 — a financial creditor may file an application with the NCLT on occurrence of a default.


• Section 9 — an operational creditor may apply after serving a demand notice and the expiry of the statutory notice period, where the debt remains unpaid and undisputed.


• Section 10 — the corporate debtor itself may apply for initiation of its own insolvency resolution.

Statutory timelines:

• Section 12(1) requires CIRP to be completed within 180 days of admission.


• Section 12(2) permits a one-time extension of up to 90 days on approval of the Committee of Creditors, taking the maximum duration to 270 days.


• The proviso to Section 12(3), inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2019 (effective 16 August 2019), fixes a mandatory outer limit of 330 days — inclusive of any extension and time spent in legal proceedings — for completion of the CIRP.

Our engagement covers drafting and filing the application under Sections 7, 9 or 10 as applicable, representation at the admission stage before the NCLT, and coordination through the resolution process within these statutory timelines.

The Corporate Insolvency Resolution Process (CIRP) is the time-bound insolvency framework of the Insolvency and Bankruptcy Code 2016. A CIRP begins when a financial creditor files under Section 7, an operational creditor under Section 9, or the corporate debtor itself under Section 10, and the National Company Law Tribunal (NCLT) admits the application. Once admitted, a resolution professional takes over, a committee of creditors is constituted, and the process must be completed within the timeline set by Section 12 — the Code prescribes 180 days extendable up to 330 days in aggregate, and the NCLT's counting of the period is strict.

The purpose of CIRP is rescue, not punishment: the committee of creditors evaluates resolution plans to keep the company alive, with a plan approved under Section 30 and sanctioned by the NCLT under Section 31. Only where no plan is approved does the company slide into liquidation. Every party in the process — the debtor, the creditors, the resolution professional — is working against the clock, and the quality of the resolution plan decides whether the company survives.

The cost of a badly run CIRP is borne by everyone. A process that misses the Section 12 timeline ends in liquidation by default; a resolution plan that fails the Section 30 conditions gets rejected; and stakeholders who do not participate properly lose their voice in the committee. The stakes are the company itself — and for directors, the shadow of the personal liability and disqualification provisions of the Code.

This service supports companies facing CIRP and creditors participating in one. We advise financial and operational creditors on Section 7 and Section 9 applications, support corporate debtors through the Section 10 route and the moratorium, assist resolution professionals with the process documentation, and work with stakeholders on resolution plans under Section 30 and their approval under Section 31.