Fast Track Insolvency- Is It Really Fast?

The very purpose of introducing Fast Track Regulation (hereinafter referred as "regulation") is to lower the burden on small companies from following the cumbersome procedure of Resolution Process as specified under the Insolvency and Bankruptcy Code (hereinafter referred as "code") for larger companies. The regulation came in force on June 14, 2017 and applies to small companies¹⁴ , start-ups ¹⁵(which should be a private company, partnership or LLP and its turnover since incorporation shouldn't exceed 25cr.) and to unlisted company with total assets, as reported in the financial statement of the immediately preceding financial year, not exceeding Rs.1 cr.¹⁶.

The regulation stipulates a period of 90 days for the resolution process¹⁷, in case of small companies, though if 75% of the creditors apply to the adjudicating authority through the resolution professional, the adjudicating authority may extend the duration for a maximum period of forty-five days.¹⁸ Whereas