NCLT Backlogs in India: How the Jet Airways Insolvency Case Exposes the Need for More NCLT Benches?
India’s insolvency framework has transformed corporate resolution through the Insolvency and Bankruptcy Code (IBC). However, NCLT backlogs in India now threaten the efficiency and credibility of this system. The prolonged insolvency proceedings of Jet Airways highlight the serious challenges caused by delays in the National Company Law Tribunal (NCLT).
Jet Airways entered the Corporate Insolvency Resolution Process (CIRP) in 2019 under Section 7 with debt exceeding ₹8,300 crore. Ideally, the IBC framework requires resolution within 330 days. However, the process stretched beyond 1,000 days before liquidation became inevitable in 2025. Consequently, creditors recovered only about 27% of their dues compared to the national average recovery of around 45%.
This case illustrates how NCLT case backlogs and structural limitations can weaken the insolvency resolution framework.
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Jet Airways Insolvency Timeline Highlighting NCLT Backlogs in India
The Jet Airways insolvency process clearly demonstrates how delays accumulate in complex cases.
Initially, the Mumbai NCLT admitted the case in 2019 and imposed a moratorium. Soon after, the resolution process began under the supervision of the Resolution Professional (RP) and the Committee of Creditors (CoC).
However, several challenges emerged.
T+0 (2019): NCLT Mumbai admitted the insolvency petition and imposed a moratorium.
T+330: Extensions began as the resolution process failed to finalize a viable plan.
T+900: Delays intensified due to litigation, creditor disagreements, and operational hurdles.
2025: Ultimately, the tribunal ordered liquidation after no sustainable revival plan emerged.
As a result, the airline collapsed permanently, leaving over 1,000 employees unemployed. Additionally, the aviation ecosystem suffered losses estimated at ₹1,500 crore.
Therefore, the case strongly highlights the consequences of prolonged insolvency resolution timelines.
NCLT Bench Shortage: A Major Cause of NCLT Backlogs in India
The Economic Survey 2025 has raised serious concerns about the growing NCLT backlog in India. According to recent data, more than 25,000 cases remain pending across NCLT benches nationwide.
Currently, India operates only 16 NCLT benches to manage corporate disputes, insolvency matters, and company law cases.
While Mumbai and Delhi each operate six court halls, the situation differs drastically in other regions. For instance, Bengaluru has only one functional bench despite handling a large volume of corporate filings.
This imbalance creates severe pressure on certain tribunals.
For example, Karnataka hosts more than 5,000 startups and significant manufacturing investments exceeding ₹2 lakh crore in private equity funding. Consequently, the single Bengaluru bench receives more than 1,200 filings annually, which far exceeds its processing capacity.
As a result, insolvency cases often remain pending for extended periods.
Impact of NCLT Backlogs in India on Insolvency Resolution
Delays in insolvency resolution significantly reduce recovery value. According to the Economic Survey, nearly 48% of Corporate Insolvency Resolution Processes exceed the prescribed 330-day limit.
Furthermore, data show that recovery value declines by approximately 1% for every 100-day delay in resolution.
Therefore, prolonged proceedings weaken creditor confidence and discourage investors.
In contrast, NCLT benches in Mumbai and Delhi process nearly 80% of cases within reasonable timelines because they have better infrastructure and multiple court halls.
However, cities like Bengaluru continue to face severe bottlenecks.
Structural Challenges Driving NCLT Backlogs in India
Several systemic factors contribute to NCLT case backlogs.
First, the limited number of benches cannot handle the rising volume of corporate disputes. Second, large insolvency cases such as Jet Airways consume substantial judicial time.
Consequently, smaller insolvency matters and SME cases receive delayed hearings.
Moreover, procedural complexities and litigation between stakeholders often extend resolution timelines. In the Jet Airways case, conflicts within the Committee of Creditors and regulatory barriers further slowed progress.
Additionally, promoter participation restrictions under Section 29A complicated potential revival efforts.
Economic Survey Recommendations for NCLT Reforms
Recognising these challenges, the Economic Survey 2025 proposes several reforms to strengthen the insolvency ecosystem.
First, it recommends doubling the number of NCLT benches from 16 to 32 across the country. This expansion would significantly reduce case congestion.
Second, the Survey suggests dedicated insolvency court halls to ensure faster hearings for CIRP matters.
Third, the government has begun exploring AI-based case triage systems and mandatory electronic filing. Early pilots in Bengaluru have already improved listing efficiency by nearly 20%.
Finally, the Survey encourages the adoption of pre-packaged insolvency processes (PPI) for sectors such as aviation and real estate. These mechanisms allow faster restructuring while minimizing litigation.
Economic Consequences of NCLT Backlogs in India
The Jet Airways case illustrates the broader economic cost of prolonged insolvency proceedings.
When large companies remain unresolved for years, employees lose jobs, suppliers suffer unpaid dues, and investors lose confidence.
Additionally, delayed vendor payments often create liquidity stress for small businesses.
In Bengaluru, many Section 9 operational creditor petitions face dismissal or delayed hearings, which restricts working capital for vendors and suppliers.
Therefore, addressing NCLT backlog issues is essential not only for creditors but also for the broader business ecosystem.
The Way Forward: Urgent Need for Structural Reforms
India’s insolvency framework remains one of the most significant economic reforms in recent years. However, its effectiveness depends on timely resolution.
To address the backlog crisis, policymakers must prioritise the following reforms:
- Increase the number of NCLT benches nationwide
- Establish multiple court halls in high-filing jurisdictions such as Bengaluru
- Introduce AI-assisted case allocation systems
- Ensure 14-day timelines for key procedural decisions
Until systemic reforms fully materialise, legal practitioners and stakeholders must adopt strategic filing approaches with NCLT Lawyer and proactive case management to mitigate delays.
Addressing NCLT Backlogs in India: The Way Forward
The Jet Airways insolvency case stands as a powerful example of the consequences of NCLT backlogs in India. While the Insolvency and Bankruptcy Code provides a strong legal framework, delays in tribunal proceedings weaken its intended impact.
Therefore, expanding tribunal capacity and modernising judicial infrastructure remain essential.
The Economic Survey 2025 offers a clear blueprint for reform. If implemented effectively, these measures can restore confidence in India’s insolvency ecosystem and ensure faster corporate resolutions.
