An insolvency or IBC lawyer is often brought in late, after the demand notice or even after admission, when the Insolvency and Bankruptcy Code, 2016 (IBC) is already moving. The decisions that shape the outcome come early. The firm's restructuring and insolvency practice, like its litigation group's work for bankruptcy creditors and debtors, acts on both sides: for financial and operational creditors, and for companies, promoters and guarantors facing an application.
Starting a corporate insolvency case
A corporate insolvency resolution process (CIRP) can be started against a corporate debtor that has defaulted on at least ₹1 crore, the threshold since 2020. A financial creditor applies under Section 7, an operational creditor under Section 9 after serving a demand notice under Section 8, and the company itself under Section 10. For an operational creditor, a genuine dispute that existed before the demand notice defeats the application, so the correspondence before the notice matters as much as the invoices.
For a company or promoter facing an application, the options before admission include paying or settling, showing a pre-existing dispute and contesting the debt or the default. After admission, the application can still be withdrawn under Section 12A with the approval of 90 per cent of the committee of creditors by voting share.
From admission to a resolution plan
- On admission, a moratorium under Section 14 bars suits, execution and the enforcement of security against the corporate debtor, including action under the SARFAESI Act, and an interim resolution professional takes over management.
- Creditors file their claims, and a committee of creditors, made up of financial creditors, takes the commercial decisions.
- Resolution applicants submit plans. Section 29A bars certain persons, among them many promoters of defaulting companies, from submitting one, with relaxations for MSMEs.
- A plan needs the approval of at least 66 per cent of the committee by voting share and then of the NCLT under Section 31. Once approved, it binds the company, its employees, members and creditors, including government authorities owed statutory dues, and claims left out of it are extinguished.
- The process should be completed within 180 days, extendable by 90 days, and ordinarily within an outer limit of 330 days including litigation. If no plan is approved, the company goes into liquidation.
Liquidation, pre-packs and personal guarantors
In liquidation, the liquidator realises the assets, including by selling the business as a going concern, and distributes the proceeds in the order set by Section 53. A secured creditor may relinquish its security to the liquidation estate or realise it outside the liquidation, with consequences under Section 53 for any shortfall.
Pre-packaged insolvency, added to the Code in 2021, is open only to corporate debtors that are MSMEs, for defaults of at least ₹10 lakh, and only the debtor can start it, with the prior approval of its unrelated financial creditors. Management stays in control, a base resolution plan is put to the committee of creditors, and the process is designed to finish within 120 days.
Personal guarantors to corporate debtors are dealt with under Part III of the Code, before the NCLT that hears the company's case, and the Supreme Court upheld those provisions in 2023. Approval of the company's resolution plan does not by itself discharge a personal guarantor, so guarantors need advice from the start.
Chhattisgarh cases and the NCLT Cuttack Bench
The Cuttack Bench of the NCLT has jurisdiction over Chhattisgarh and Odisha, and jurisdiction follows the company's registered office, so a company registered in Raipur or Bilaspur is dealt with at Cuttack wherever its creditors are. Appeals go to the National Company Law Appellate Tribunal within thirty days, extendable by fifteen days for sufficient cause, and from there to the Supreme Court on a question of law. In a State whose economy leans on steel, power, coal and minerals, resolution plans can turn on land, mining rights and environmental consents as much as on price.
Creditors, companies and guarantors dealing with an insolvency application can reach the firm at its Raipur office.
What the practice handles
- Applications by financial creditors under Section 7
- Demand notices and applications by operational creditors under Sections 8 and 9
- Defence of insolvency applications for companies and promoters
- Claims, and representation before the committee of creditors
- Resolution plans, and their approval or challenge
- Settlement and withdrawal under Section 12A
- Liquidation, including sales as a going concern and realisation by secured creditors
- Pre-packaged insolvency for MSMEs
- Insolvency of personal guarantors under Part III
- Appeals to the NCLAT and the Supreme Court
Where these matters are heard
- National Company Law Tribunal, Cuttack Bench, for Chhattisgarh and Odisha
- National Company Law Appellate Tribunal
- Supreme Court of India
- Committees of creditors, where the commercial decisions in a resolution are taken
Questions about Insolvency & Restructuring
What is the minimum default for starting corporate insolvency?
₹1 crore, since 2020. Below that, a creditor cannot start a corporate insolvency resolution process, though it can use a civil suit, a summary suit, arbitration or, for banks and financial institutions, the Debt Recovery Tribunal and the SARFAESI Act. Pre-packaged insolvency for MSMEs has a lower minimum default of ₹10 lakh, but only the corporate debtor itself can start it.
Which NCLT bench hears insolvency cases from Chhattisgarh?
The Cuttack Bench of the National Company Law Tribunal, which has jurisdiction over Chhattisgarh and Odisha. Jurisdiction depends on where the corporate debtor's registered office is, so a company registered in Chhattisgarh is dealt with at Cuttack even if its creditors are elsewhere. Applications concerning its personal guarantors are filed before the same Bench, and appeals from the Bench go to the NCLAT.
Can an operational creditor use the IBC to recover an unpaid invoice?
Only where the default is at least ₹1 crore and there is no genuine pre-existing dispute. The creditor first serves a demand notice under Section 8, and the company has ten days to pay or point to a dispute. The Code is a resolution process rather than a recovery tool: once a case is admitted, all creditors are dealt with together, and a smaller creditor may recover more through a suit or arbitration.
Does a personal guarantor remain liable after the company's plan is approved?
Generally, yes. The Supreme Court has held that approval of a resolution plan does not by itself discharge a personal guarantor, so creditors may pursue the guarantor for the unpaid balance, including through an insolvency process under Part III of the Code before the NCLT. The Court upheld those Part III provisions in 2023. The terms of the plan and of the guarantee must be read together.
What happens to SARFAESI action once a company is admitted into insolvency?
It stops. The moratorium under Section 14 bars the enforcement of security interests against the corporate debtor's assets, including action under the SARFAESI Act, 2002, while the process lasts. The moratorium does not protect personal guarantors, whose assets can still be pursued. Secured creditors take part through the committee of creditors and, in liquidation, may choose to realise their security.
Can promoters bid for their own company?
Often not. Section 29A bars certain persons from submitting a resolution plan, including a person whose account has been a non-performing asset for a year or more (unless the overdue amounts are paid before the plan is submitted), wilful defaulters and persons connected with them. The bar is relaxed for MSMEs in some respects, and in pre-packaged insolvency the debtor's own base plan is the starting point.
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This page describes the law in general terms as of 24 September 2026. It is not legal advice. The outcome of any matter depends on its facts, and the firm does not guarantee results.
