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The Insolvency and Bankruptcy Code gives creditors a time-bound process to resolve a company's insolvency before the National Company Law Tribunal (NCLT).
Last reviewed: October 2026 · General information only, not legal advice.
| Applicant | Section | Key points |
|---|---|---|
| Financial creditor | IBC 7 | Banks, lenders, bondholders; homebuyers (at least 100 allottees or 10% of the project) |
| Operational creditor | IBC 9 | Suppliers, service providers, employees; must first serve a demand notice under Section 8 |
| Corporate debtor itself | IBC 10 | The company can initiate its own insolvency |
The minimum default is ₹1 crore. The NCLT bench with jurisdiction over the company's registered office hears the case.
An operational creditor must serve a demand notice under IBC 8. The company has 10 days to pay or point out a pre-existing dispute. If a genuine dispute existed before the notice, the Section 9 petition will be rejected (Mobilox Innovations, 2017). Invoices, ledgers, correspondence and proof of delivery are essential.
The process should be completed within 180 days, extendable by 90 days, with an outer limit of 330 days including litigation (though in practice it often takes longer). An application can be withdrawn with approval of 90% of the CoC IBC 12A.
Insolvency proceedings against personal guarantors of companies are also heard by the NCLT under Part III of the IBC. The Supreme Court upheld these provisions in 2023.
NCLT orders can be appealed to the NCLAT within 30 days (extendable by 15 days) IBC 61, and from there to the Supreme Court on questions of law within 45 days IBC 62.
The minimum amount of default for initiating the corporate insolvency resolution process against a company is ₹1 crore.
Section 7 is used by financial creditors, such as banks and lenders, who have given money against the time value of money. Section 9 is used by operational creditors, such as suppliers and service providers, after serving a demand notice under Section 8.
Yes. Homebuyers are financial creditors, but a Section 7 application must be filed jointly by at least 100 allottees or 10% of the total allottees in the same project, whichever is less.
The law sets 180 days, extendable by 90 days, with an outer limit of 330 days including litigation. Actual timelines often exceed this because of litigation and delays.
Every case turns on its own facts. Speak to Advocate Ajay Mishra for advice specific to your situation — in person at IP Extension (Delhi) or Vaishali (Ghaziabad), by phone, or by video call.