Pre-Packaged Insolvency (PPIRP)

Pre-Packaged Insolvency Resolution Process (PPIRP) — Regulatory Basis

The Pre-Packaged Insolvency Resolution Process (PPIRP) was introduced into the Insolvency and Bankruptcy Code, 2016 by the Insolvency and Bankruptcy Code (Amendment) Act, 2021, which inserted Sections 54A to 54P (Chapter III-A), effective 4 April 2021.

Eligibility: PPIRP is available only to corporate debtors classified as micro, small, or medium enterprises (MSMEs) under the applicable MSME classification. Under Section 54C, the process can be initiated only where the minimum default value does not exceed ₹1 crore.

Key distinguishing features from ordinary CIRP:

• Timeline: PPIRP is to be completed within 120 days, including a 30-day window built in for NCLT approval of the resolution plan — materially shorter than the 180-330 day CIRP timeline under Section 12.


• Management continuity: unlike CIRP, where control passes to a resolution professional, the existing management of the corporate debtor retains control of operations during PPIRP as a "debtor-in-possession" process, subject to oversight.


• Initiation: PPIRP is initiated by the corporate debtor itself, following a base resolution plan pre-negotiated with unrelated financial creditors, before formal application to the NCLT.

Our engagement covers eligibility assessment against the MSME and ₹1 crore default-value criteria under Section 54C, preparation of the base resolution plan and related filings under Chapter III-A, and representation before the NCLT within the 120-day statutory timeline.

The pre-packaged insolvency resolution process (PPIRP) is the resolution route for the micro, small and medium enterprises under Section 54A of the Insolvency and Bankruptcy Code 2016 — the process in which the corporate debtor and its financial creditors agree on the base resolution plan before the filing, and then pursue the approval through the time-bound process with the resolution professional, the committee of creditors and the adjudicating authority. The PPIRP is the IBC's rescue route for the MSMEs, designed to be faster and less disruptive than the full CIRP.

The pre-pack is the resolution that is agreed before it is filed — the debtor negotiates the base plan with its financial creditors, and the process then formalises and approves it within the timelines the Code provides. The PPIRP preserves the management during the resolution where the CIRP displaces it, and it is available only to the MSMEs as defined under the Code. The eligibility, the base plan and the compliance are the discipline of the route.

The cost of an unmanaged distress for the MSME is the fall into the full CIRP: the management displaced, the timelines and the costs of the longer process, and the resolution that is decided without the debtor's plan. The pre-pack is the route that keeps the resolution in the debtor's hands.

This service is for MSMEs in financial distress and their creditors. We assess the eligibility under the Code and the feasibility of the pre-pack, structure the base resolution plan with the financial creditors, prepare and file the application under Section 54A, manage the process — the resolution professional, the committee, the approval — and support the implementation so the MSME's resolution follows the plan it negotiated.