The Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC) 2016 is India's primary mechanism for corporate debt restructuring and resolution. Understanding the CIRP process is essential for creditors (banks, NBFCs, vendors), corporate debtors facing insolvency, and resolution applicants looking to acquire stressed assets.
What is CIRP Under IBC 2016?
CIRP is a time-bound process initiated at the NCLT that aims to resolve corporate insolvency by finding a new owner/manager who can revive the company and pay creditors. The key principle of IBC is: resolution is preferred over liquidation — preserving going concern value and maximizing creditor recovery.
Who Can Initiate CIRP?
- Financial Creditors (Section 7): Banks, NBFCs, debenture holders, bond holders — with a financial debt of ₹1 crore or more in default
- Operational Creditors (Section 9): Vendors, suppliers, employees, government — with operational debt of ₹1 crore+ unpaid
- Corporate Debtor Itself (Section 10): Company can voluntarily file if it cannot pay its debts
CIRP Process: Stage-by-Stage Guide
Stage 1: Petition Filing at NCLT (Day 0)
The creditor files the petition at the appropriate NCLT Bench with required forms and evidence of default. For operational creditors, a 10-day demand notice must be served first (Section 8).
Stage 2: NCLT Admission (Day 14-90)
NCLT examines the petition. If a valid default is established, the bench passes an admission order and declares moratorium. The moratorium prevents: new suits against the company, enforcement of securities, transfer of assets, and recovery actions.
Stage 3: IRP Appointment (Day 17-30)
An Interim Resolution Professional (IRP) is appointed — either from the applicant's list or by IBBI. The IRP takes control of the company's management.
Stage 4: Public Announcement & Claims (Day 3 from IRP appointment)
The IRP publishes a public announcement in newspapers and on IBBI website, inviting claims from all creditors. Creditors must submit claims within 30 days.
Stage 5: CoC Formation (Day 30 from IRP appointment)
The Committee of Creditors (CoC) is formed — comprising all financial creditors. Operational creditors and government claims are included but have no voting rights. CoC approves/rejects resolution plans by 66% voting share.
Stage 6: Resolution Plan Submission & Approval (Day 90-180)
Resolution Applicants submit plans. CoC evaluates and approves one plan by 66% vote. NCLT then approves the plan, binding all creditors.
Stage 7: Resolution or Liquidation (Day 180-270)
If a plan is approved within 270 days, it's implemented. If not, the company goes into liquidation — assets are sold and proceeds distributed in the waterfall priority (secured financial creditors first, then unsecured, then operational creditors, then equity shareholders).
CIRP Key Statistics (2024)
| Metric | Data |
|---|---|
| Total CIRPs admitted (cumulative) | ~7,000+ |
| Average time for resolution (approved plans) | ~600 days |
| Resolution plans approved | ~950+ |
| Liquidation orders passed | ~2,000+ |
| Average realization for financial creditors (resolution) | ~32-40% of admitted claims |
How Accorg Can Help in CIRP
CA Harshaditya Kabra and the Accorg team provide end-to-end CIRP services: petition drafting, NCLT representation, IRP assistance, CoC representation, resolution plan evaluation, and liquidation supervision. With 100+ CIRP matters handled, we know exactly how to navigate each stage to maximize creditor recovery.
