Written By: Apoorv Agarwal, Manav Goyal
Every timeline Parliament has aimed at a court has been read down, struck down or quietly ignored. The only deadlines that survive are the ones that fall on the litigant.
Anyone who has waited for a Section 7 petition to be taken up knows the arithmetic. The Code says the tribunal has fourteen days to admit or reject it. The board outside the courtroom says something else. Most of the Insolvency and Bankruptcy Code (Amendment) Act, 2026[1] came into force on 26 May this year, and its answer to that gap is worth reading slowly. The NCLT shall now admit or reject within fourteen days, and if it cannot, it must record its reasons in writing.[2]
I read that twice when the Act was notified, because the fourteen days were already there. They have been in Section 7 since 2016. The Supreme Court held the period directory in Surendra Trading Company[3] in September 2017, less than a year after the Code began to operate. And Section 64 has required the tribunal, from the very first day, to record reasons whenever it misses a period the Code specifies.[4] So the cure for a deadline that was never kept is the same deadline, with the same remedy, printed in bolder ink.
I do not say this to pick on one amendment; the 2026 Act does several things well, and I will come back to one of them. The fourteen days are a symptom of something wider. Across the statutes that govern commercial life in this country, Parliament sets a clock, the courts treat the clock as advice, the arrears grow, and Parliament sets the clock again.
Four clocks that do not run
Start with the Code itself. Section 12 gave the resolution process 180 days, extendable once by 90. That was not enough, so in 2019 Parliament added an outer limit of 330 days, counted to include time lost in litigation, and said the process “shall mandatorily” be completed within it.[5] The word did not last the year. In Essar Steel[6], decided that November, the Supreme Court struck “mandatorily” out of the proviso as manifestly arbitrary and left the rest of the sentence standing. The limit is still in the statute. It is now a norm the tribunal may cross when it thinks the case exceptional, and the tribunal thinks so often. ICRA puts the average time to a resolution plan at 744 days as on 31 March 2026, up from 713 a year before.[7] IBBI’s own newsletters report a figure around 600 days, and that number leaves out whatever time the tribunal has itself chosen to exclude.[8]
Arbitration is the second clock. Section 29A arrived in 2015 with a twelve-month period for the award and a blunt consequence: the tribunal’s mandate “shall terminate” if the award is not made in time or within an extension the court allows.[9] Practitioners disliked it, and the courts have spent a decade taking the edge off. In Rohan Builders[10] (2024), the Supreme Court held that a party can apply to extend the mandate after it has expired. In C. Velusamy v. K. Indhera[11], decided on 3 February this year, it went a step further: a court may extend the mandate even after the arbitrator has gone ahead and delivered an award outside it. Whatever “terminate” was meant to mean in 2015, it now means suspended, pending an application that can be filed at any time. Section 34(6) says a challenge to an award “shall” be decided within a year; the Supreme Court held it directory in 2018 in Bihar Rajya Bhumi Vikas Bank Samiti[12], because the Act attaches no consequence to missing it.
Section 143(3) of the Negotiable Instruments Act, inserted in 2002, says an endeavour shall be made to conclude a cheque trial within six months of the complaint.[13] When the Supreme Court took up the backlog on its own motion in 2021, it was told that 35.16 lakh Section 138 complaints were pending as on 31 December 2019, roughly 15 per cent of every criminal case in the country.[14] Four years later, in Sanjabij Tari[15], the Court issued another round of directions: dasti service, no summons before cognizance, dashboards and monthly reviews in Delhi, Mumbai and Calcutta. We have reached a point where directions from the Supreme Court are doing the work of a statutory deadline that has never once described how long a cheque trial actually takes.
The fourth clock is the newest. The Commercial Courts Act, 2015 inserted Order XV-A into the Code of Civil Procedure, requiring arguments to be closed within six months of the first case management hearing,[16] and rewrote Order XX Rule 1 so that judgment follows within ninety days of arguments.[17] Section 14 asks the appellate division to “endeavour” to decide appeals in six months.[18]
Why the courts read “shall” as “may”
The doctrine is old. A time limit that carries no stated consequence is treated as directory, however imperative the verb. That is what the Court said in Bihar Rajya Bhumi Vikas: nothing happened if a Section 34 petition ran past a year, so the year was a target and not a bar. What would the alternative have been? A deemed dismissal punishes the party who came to court on time. A deemed decree punishes the party who did nothing wrong except be on the other side.
Essar Steel makes the same point in constitutional language. The 330-day limit was the rare court-facing deadline that did have teeth. If it ran out, the company went into liquidation. But the teeth closed on creditors and debtors for a delay that was, in most cases, the tribunal’s own. The Court called that arbitrary, and it was right to.
So Parliament has been drafting two kinds of deadline for courts. One kind has no consequence and is read as advice. The other kind has a consequence that lands on the parties and is struck down or read down as unfair. Both have been tried, more than once each. The lesson is not that timelines cannot work. It is that a timeline aimed at the bench has to be built differently from one aimed at a litigant.
The clocks that do run
Now look at the deadlines the Supreme Court has enforced without hesitation. Order VIII Rule 1, as amended for commercial suits, gives a defendant 120 days to file a written statement. In SCG Contracts[19] (2019), the Court held the limit mandatory. The right is forfeited on day 121, and no court can revive it, not even under Section 151. Section 12A of the Commercial Courts Act requires a plaintiff to attempt mediation before suing. In Patil Automation[20] (2022), the Court held that mandatory too; a plaint filed without it is rejected at the threshold. Section 13(2) of the Consumer Protection Act, 1986 gave the opposite party thirty days plus fifteen to file its version. A Constitution Bench in Hilli Multipurpose Cold Storage[21] (2020) held that the forum cannot extend that period by a single day.
What do those three have in common? Each binds the party, not the court. Each names a consequence in the statute itself: forfeiture, rejection, closure of the right to reply. And each was upheld. Indian courts do not dislike deadlines. Quite the opposite. It is just that the only deadlines with teeth are the ones that bite the litigant, and the deadlines aimed at the bench have none.
A defendant who loses the right to plead because his written statement was ten days late will then wait three years for a judgment that the same Code says should come in ninety days. The strictness of the first rule borrows its legitimacy from the promise of the second. When the promise is broken, the strict rule stops looking like discipline and starts looking like what it is: a device for shifting the cost of delay from the system onto whoever happens to be standing in front of it.
What a clock is actually for
A statutory timeline can do three things: signal the legislature’s priorities to the bench, give the parties a horizon to plan against, and give Parliament a yardstick. We have used only the first, and used it so often that it no longer signals anything.
Timelines are, after all, how these statutes were sold. The long title of the Code promises resolution “in a time bound manner”.[22] The 2015 arbitration amendments were justified almost entirely by speed. The Commercial Courts Act exists for no other reason. Lenders and foreign counterparties read the statute, not the case law, and price the country on what the statute says. Every year the gap between the printed clock and the real one widens, and the lesson it teaches is that in India a statutory deadline is a statement of hope.
Five things that would help
First, stop legislating a clock for a court without legislating the capacity to keep it. In 2022, the expert committee in the Section 138 matter estimated that clearing the cheque backlog would take 1,826 additional judges.[23] It has not happened. No timeline provision should pass without a statement of the disposal capacity it assumes and how that capacity will be paid for. A deadline with no bench behind it is a press release.
Second, prefer rules that change what a court must decide over rules that tell it how quickly to decide. The part of the 2026 amendment that will actually work is not the fourteen days. It is the word “shall” in the operative clause: once default is shown and the application is complete, the tribunal admits it and considers nothing else. That removes a source of delay. The clock printed next to it merely describes one.
Third, publish compliance. Section 64 reasons, the new admission-delay reasons, the Section 34 disposal times of every High Court, and the Section 138 dashboards the Supreme Court has ordered for three cities should all be national, public and quarterly. What is measured in the open tends to move.
Fourth, put the consequence where the fault lies. If a Section 34 petition is not decided in a year, the answer is neither dismissal nor deemed allowance. It is administrative: mandatory reallocation to another bench, a report to the Chief Justice, priority listing. Those are consequences the system can carry without punishing the parties.
Fifth, draft honestly. Parliament should stop writing “shall” where it knows the courts will read “may”, and should stop writing “endeavour” altogether. A deadline that everyone in the room understands will not bind is not a rule. It is an ornament on the statute, and the ornament is starting to cost the credibility of the rules around it.
[1]Insolvency and Bankruptcy Code (Amendment) Act, 2026 (Act No. 6 of 2026), assented to on 6 April 2026. Ministry of Corporate Affairs Notification S.O. 2625(E) dated 22 May 2026 appointed 26 May 2026 as the date of commencement of most of its provisions, including sections 2 to 6, 8 to 33, 35 to 39, 41, 43 to 44, 46, 48 to 59, 61 to 66 and 68.
[2]Section 7 of the Code as amended by section 8 of the Amendment Act. The Adjudicating Authority shall, within fourteen days of receipt, admit the application where a default has occurred, the application is complete and no disciplinary proceeding is pending against the proposed resolution professional, and shall record reasons in writing for any order passed beyond that period. Corresponding amendments have been made to sections 9 and 10.
[3]M/s Surendra Trading Company v. M/s Juggilal Kamlapat Jute Mills Company Limited and Others, Civil Appeal No. 8400 of 2017, decided on 19 September 2017 (Sikri and Bhushan JJ). The Court held the fourteen-day period under the proviso to sections 7(5), 9(5) and 10(4) to be directory, and also held the seven-day period for removal of defects to be directory.
[4]Section 64(1) of the Code: where an application is not disposed of or an order is not passed within the period specified in the Code, the National Company Law Tribunal or the Appellate Tribunal shall record the reasons for not doing so within the period so specified, and the President or Chairperson may, after taking those reasons into account, extend the period by not more than ten days.
[5]Second proviso to section 12(3), inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2019.
[6]Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Others, (2020) 8 SCC 531, decided on 15 November 2019 (Nariman, Surya Kant and Ramasubramanian JJ). The Court struck down the word “mandatorily” as manifestly arbitrary under Article 14 and as an unreasonable restriction under Article 19(1)(g), leaving the provision otherwise intact, with the result that the process must ordinarily be completed within the outer limit of 330 days.
[7]ICRA Limited, press release dated 27 May 2026. The same release records that the average time to closure of liquidation processes worsened to 531 days as on 31 March 2026 from 508 days a year earlier.
[8]Insolvency and Bankruptcy Board of India, Quarterly Newsletter, April to June 2026. Figures reported in these newsletters exclude the time excluded by the Adjudicating Authority. The Board’s newsletter for the quarter ending September 2025 recorded an average of 603 days for corporate insolvency resolution processes yielding resolution plans.
[9]Section 29A, inserted by the Arbitration and Conciliation (Amendment) Act, 2015 and amended in 2019 to run the twelve-month period from the date of completion of pleadings under section 23(4). Sub-section (4) provides that the mandate of the arbitrator shall terminate if the award is not made within the period specified or the extended period, unless the court has extended the period either prior to or after the expiry of that period.
[10]Rohan Builders (India) Private Limited v. Berger Paints India Limited, 2024 INSC 686, decided on 12 September 2024 (Khanna and Mahadevan JJ).
[11]C. Velusamy v. K. Indhera, 2026 INSC 112, Civil Appeal No. 696 of 2026, decided on 3 February 2026 (Narasimha and Chandurkar JJ), setting aside the order of the Madras High Court dated 24 January 2025 which had held such an award to be a nullity. The Court held that termination under section 29A(4) is conditional rather than absolute and remains subject to the court’s supervisory power. Commentary is divided on whether an extension validates the late award or whether the tribunal must resume and deliver a fresh one.
[12]The State of Bihar and Others v. Bihar Rajya Bhumi Vikas Bank Samiti, (2018) 9 SCC 472, Civil Appeal No. 7314 of 2018, decided on 30 July 2018 (Nariman and Indu Malhotra JJ). The Court held sections 34(5) and 34(6) to be directory notwithstanding the mandatory language used, no consequence having been provided for non-adherence.
[13]Section 143(3) of the Negotiable Instruments Act, 1881, inserted by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 with effect from 6 February 2003: every trial under the section shall be conducted as expeditiously as possible and an endeavour shall be made to conclude the trial within six months from the date of filing of the complaint.
[14]In Re: Expeditious Trial of Cases under Section 138 of N.I. Act, 1881, Suo Motu Writ Petition (Criminal) No. 2 of 2020, judgment of the Constitution Bench dated 16 April 2021. The figure of 35,16,000 cases as on 31 December 2019, out of a total criminal pendency of 2.31 crore, is taken from the preliminary report of the amici curiae as recorded in the judgment.
[15]Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158, decided on 26 September 2025. The directions were to be implemented by the High Courts and District Courts not later than 1 November 2025. The Delhi High Court issued Practice Direction No. 157/Rules/DHC in November 2025 pursuant to them.
[16]Rule 3 of Order XV-A of the Code of Civil Procedure, 1908, as inserted by the Schedule to the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015: in fixing dates or setting time limits, the Court shall ensure that the arguments are closed not later than six months from the date of the first Case Management Hearing. Rule 1 requires the first Case Management Hearing to be held not later than four weeks from the filing of the affidavit of admission or denial of documents.
[17]Rule 1 of Order XX of the Code of Civil Procedure, 1908, as amended by the Schedule to the 2015 Act, substituting ninety days from the conclusion of arguments for the period otherwise applicable.
[18]Section 14 of the Commercial Courts Act, 2015: the Commercial Appellate Division shall endeavour to dispose of appeals filed before it within a period of six months from the date of filing of such appeal.
[19]M/s SCG Contracts India Private Limited v. K.S. Chamankar Infrastructure Private Limited and Others, (2019) 12 SCC 210, Civil Appeal No. 1638 of 2019, decided on 12 February 2019. The Court held that the proviso to Order VIII Rule 1 read with Order VIII Rule 10, as applicable to commercial suits, is mandatory, and that the Court has no power to extend time beyond 120 days from service of summons.
[20]M/s Patil Automation Private Limited and Others v. Rakheja Engineers Private Limited, (2022) 10 SCC 1, decided on 17 August 2022, holding section 12A mandatory with prospective effect from 20 August 2022 and requiring rejection of a non-compliant plaint under Order VII Rule 11. Reaffirmed in Dhanbad Fuels Private Limited v. Union of India (2025) on the question of prospectivity.
[21]New India Assurance Company Limited v. Hilli Multipurpose Cold Storage Private Limited, (2020) 5 SCC 757, decided by a Constitution Bench on 4 March 2020. The corresponding provision in the Consumer Protection Act, 2019 is section 38(3), which prescribes the same period.
[22]Long title of the Insolvency and Bankruptcy Code, 2016 (Act 31 of 2016): an Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons.
[23]Order of the Supreme Court dated 19 May 2022 in In Re: Expeditious Trial of Cases under Section 138 of N.I. Act, 1881 (Bhat J), recording the recommendation of the expert committee constituted on 16 April 2021 for the creation of Special Courts under Article 247 of the Constitution staffed by 1,826 judges at an estimated cost of Rs 126.59 crore, and the reservations expressed by the amici curiae as to its feasibility.
