The President of the National Company Law Tribunal, Justice Anupinder Singh Grewal, has formally proposed a significant revision to the initiation criteria for corporate insolvency proceedings, suggesting that the current threshold of ₹1 crore is frequently exploited as a shortcut for debt collection rather than a mechanism for genuine corporate resolution. Speaking at the 'IBC Turns 10' conference held at the Chandigarh Judicial Academy, the President argued that the threshold should be adjusted to ₹2 crore, ₹5 crore, or potentially as high as ₹10 crore to ensure that only substantial insolvency cases occupy the Tribunal's time and judicial resources.

This proposed shift in policy reflects a growing recognition within the judiciary that the Insolvency and Bankruptcy Code (IBC) has, in some instances, drifted from its primary objective of reviving distressed businesses. Justice Grewal pointedly observed that "many cases that they file for the sake to recover their dues and not meant for resolution. So, they are just crossing the threshold of ₹1 crore... so I suggest that needs to be increased to ₹2 crores, ₹5 crores or ₹10 crores." By recalibrating this entry barrier, the leadership of the National Company Law Tribunal aims to filter out predatory recovery litigation and refocus the legislative intent on the structural rehabilitation of viable companies.

Reframing the Threshold for Sustainability The historical evolution of the insolvency threshold illustrates a dynamic regulatory environment. When the code was first enacted in 2016, the threshold for initiating insolvency proceedings was set at a modest ₹1 lakh. However, the legal and economic landscape shifted drastically, necessitating an upward revision to ₹1 crore in 2020. Justice Grewal’s latest call for a further increase signals that the current limit may no longer serve as an effective deterrent against the misuse of the IBC framework.

For the legal and corporate community, the proposition of a ₹5 crore or ₹10 crore threshold represents a significant pivot. Such a change would likely compel creditors to rely on traditional debt recovery channels—such as the recovery tribunals or civil suits—for smaller dues, thereby preserving the specialized NCLT mechanism for complex cases where business continuity is at stake. The tribunal has already demonstrated its capacity to manage such complex matters, having approved 1,748 resolution plans involving approximately ₹4.90 lakh crore since the inception of the IBC. During the current financial year alone, the value of plans approved has reached approximately ₹17,000 crore, underscoring the vital role the tribunal plays in maintaining the stability of the broader financial sector.

Bridging Disputes Through Mediation Beyond the structural adjustments to thresholds, the President emphasized the necessity of integrating alternative dispute resolution mechanisms to alleviate the burden on the formal court process. Recognizing the inherent challenges posed by the strict timelines mandated by the Supreme Court of India for the Corporate Insolvency Resolution Process (CIRP), Justice Grewal noted that the tribunal has begun encouraging parties to engage in direct discussions during court proceedings.

“Mediation can play wonders,” the President remarked, highlighting that the tribunal has successfully resolved 25 matters at the pre-CIRP stage. This shift toward mediation aligns with a broader push for efficiency in the legal system. While the statutory timelines for insolvency are designed to ensure speed, they often preclude the flexibility required for nuanced negotiations. By promoting mediation, the tribunal is seeking to cultivate a culture where parties prioritize settlement over the protracted and often value-erosive process of liquidation. This evolution in judicial practice is expected to reduce the caseload of the NCLT while providing creditors and debtors with a commercially viable exit strategy that preserves value for all stakeholders.

Leveraging Data for Preventive Oversight A significant theme of the conference was the potential for the systemic use of default data to predict and prevent corporate distress. Former Supreme Court judge Justice Rajesh Bansal, who delivered the keynote address, called for a more proactive utilization of the data collected by National E-Governance Services Limited (NeSL). He argued that mere data collection is insufficient if it is not paired with analytical measures to identify industry-specific trends in defaults.

Justice Bansal pointedly questioned why this data is not being used to diagnose the health of specific sectors, noting, “Why can't we use this data for quality purposes? We should also see which kind of industry is going in default. What measures can be taken for that?” By analyzing recurring defaults, regulators and lenders could implement preventative measures—such as restructuring or debt-relief programs—long before a company reaches the point of insolvency.

The keynote also brought to light a critical critique of lending practices, with Justice Bansal noting that the insolvency crisis is sometimes exacerbated by lenders who extend credit without adequate security or comprehensive assessment of project viability. By fostering a more disciplined approach to credit assessment, supported by the data repositories managed by entities like NeSL, the insolvency framework could evolve from a reactive tool of last resort into a proactive instrument of economic management.

Empowering the Insolvency Professional Throughout the deliberations, the role of insolvency professionals remained a central focus. Justice Grewal characterized these practitioners as the "foundation of the resolution process," emphasizing that their contribution goes beyond legal compliance. As the Indian economy continues to grow at a rapid pace, the duty of an insolvency professional to act with integrity and diligence is viewed as a form of "nation building."

The conference, which drew participation from the Society of Indian Lawyers, INSOL India, and IWIRC India, reinforced the consensus that the IBC is an essential component of the country’s modern economic architecture. As the proceedings conclude, the discourse has firmly shifted toward the next decade of the code, with an emphasis on balancing judicial efficiency with commercial pragmatism. For now, the focus rests on whether these proposed threshold adjustments will gain legislative traction and how quickly the integration of mediation and data analytics can be standardized across all benches of the tribunal. The current procedural trajectory points toward a more selective, resolution-oriented, and digitally-informed framework for the coming years.