NCLAT Sets Aside NCLT Order, Allows 87-Day CIRP Exclusion for Senior Builders After RP Change

NCLAT's Principal Bench allowed exclusion of 87 days from the CIRP timeline of Senior Builders Ltd., reversing an NCLT order that had rejected the new Resolution Professional's application under Section 12(2) of the IBC.

The National Company Law Appellate Tribunal's Principal Bench at New Delhi, comprising Justice Yogesh Khanna (Member, Judicial) and Mr. Naresh Salecha (Member, Technical), on 3 June 2026 allowed an appeal filed by Vivek Bansal, the Resolution Professional of Senior Builders Ltd. The Bench set aside an order dated 22 April 2026 passed by the National Company Law Tribunal, New Delhi, Bench-IV, which had rejected an application seeking exclusion of 87 days — from 15 December 2025 to 11 March 2026 — from the Corporate Insolvency Resolution Process timeline. With only 26 days left in the CIRP period when the new RP took charge, the rejection threatened to push the process beyond 330 days and mechanically trigger liquidation.

The Dispute Before the Tribunal

The Corporate Insolvency Resolution Process of Senior Builders Ltd. was initiated under C.P. (IB) No. 457/PB/2022 before the NCLT, New Delhi. During the proceedings, an application was filed on 15 December 2025 for the removal of the erstwhile Resolution Professional. That application was allowed on 11 March 2026, and the new Resolution Professional, Vivek Bansal, took charge on 12 March 2026.

Upon reviewing the record, the incoming RP found that a substantial part of the CIRP work remained pending. Critically, only 26 days were left in the permissible CIRP timeline under Section 12 of the Insolvency and Bankruptcy Code, 2016. The new RP accordingly filed IA No. 1716/ND/2026 under Section 12(2) of the IBC read with Regulation 40 of the CIRP Regulations, 2016, seeking exclusion of the 87-day period during which the removal application was pending before the NCLT.

The NCLT rejected that application by its order dated 22 April 2026. Vivek Bansal then filed Company Appeal (AT) (Ins.) No. 991 of 2026 before the NCLAT.

Positions of the Parties

Counsel for the appellant, Mr. Anup Kumar and Mr. Amit Prakash, argued that unless the 87-day period was excluded from the CIRP timeline, the process would exceed 330 days, mechanically triggering liquidation of the Corporate Debtor. They submitted that the Supreme Court, in a series of judgments, has consistently held that liquidation is a measure of last resort and that every possible step must be taken to ensure resolution and preserve the Corporate Debtor as a going concern.

The authorised representative of the Committee of Creditors, Mr. Sumit Shukla, appeared and supported the appeal. The counsel for the Resolution Professional, who appeared on advance notice, also stated he had no objection to the exclusion of the 87-day period.

The Statutory Question

Section 12(2) of the IBC permits the CIRP period to be extended beyond 180 days, subject to a maximum of 330 days including any extension, where the resolution process cannot be completed within the original timeline. Regulation 40 of the CIRP Regulations, 2016 provides for exclusion of certain periods from the CIRP timeline. The question before the NCLAT was whether the 87-day period during which the removal application against the erstwhile RP was pending — a period during which the incoming RP could not meaningfully advance the process — ought to have been excluded.

How the Tribunal Reasoned

The Bench noted that the application for removal of the erstwhile Resolution Professional was filed on 15 December 2025 and was allowed only on 11 March 2026. The new RP took charge on 12 March 2026 and found substantial work still pending, with only 26 days remaining in the CIRP period. In these circumstances, the Bench accepted the submission that refusing exclusion would mechanically push the CIRP beyond 330 days and force liquidation, contrary to the object of the Code.

All parties before the Tribunal — the appellant RP, the CoC's authorised representative, and the respondent's counsel — were aligned in supporting the exclusion. The Bench found no basis to sustain the NCLT's rejection of the application.

Order

The NCLAT allowed the appeal. The impugned order of NCLT New Delhi, Bench-IV dated 22 April 2026, in so far as it dismissed the application for excluding the period of 87 days from the CIRP timeline of Senior Builders Ltd., was set aside. The pending I.A. No. 3941 of 2026 was also disposed of.