Fast Track CIRP under IBC, 2016 | Supreme Court Interpretation & Procedure

• 05 Feb 2026

Fast Track CIRP under IBC, 2016 — A Complete Legal & Practical Guide

Blog By: Jayprakash B. Somani
Advocate, Supreme Court of India & IP
Cell: PA 9322188701
www.jayprakashsomani.com

1. Introduction to Fast Track CIRP

The Fast Track Corporate Insolvency Resolution Process (Fast Track CIRP) is a speedier insolvency resolution mechanism introduced under the IBC to deal with small, less complex corporate debtors, primarily MSMEs and start-ups, where prolonged insolvency proceedings would destroy value rather than preserve it.

Objectives:

• Resolve insolvency quickly

• Reduce procedural costs

• Preserve enterprise value

• Improve ease of doing business for small entities

Fast Track CIRP is governed by Sections 55 to 58 of the IBC and corresponding IBBI Regulations.

2. Statutory Framework

Governing Provisions:

• IBC Sections: 55, 56, 57, 58

• Applicable CIRP Sections (mutatis mutandis): 6–32A

• Regulations: IBBI (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017

• Adjudicating Authority: NCLT

• Appellate Authorities: NCLAT ? Supreme Court

3. Applicability & Eligibility (Section 55)

Fast Track CIRP is available to the following categories of corporate persons as notified by the Central Government:

Eligible Entities:

1. Small Companies (as per Companies Act, 2013)

2. Start-ups (as per DPIIT notification)

3. Unlisted companies with:

   • Assets ? ?1 crore, and

   • Such other criteria as may be notified

Rationale:
These entities usually have:

• Limited creditors

• Simple debt structures

• Lower asset base

4. Initiation of Fast Track CIRP

Who Can Initiate? (Section 55 read with Section 6)
Same as normal CIRP:

• Financial Creditor – Section 7

• Operational Creditor – Section 9

• Corporate Debtor – Section 10

Important:
The applicant must specifically pray for Fast Track CIRP and demonstrate eligibility under Section 55.

5. Commencement & Admission

Once the NCLT is satisfied that:

• Default has occurred, and

• Corporate debtor is eligible for fast track process

It admits the application and declares commencement of Fast Track CIRP.

Consequences of Admission:

• Moratorium under Section 14 applies

• Interim Resolution Professional (IRP) appointed

• Public announcement issued

6. Time Limit – Key Distinction (Section 56)

Statutory Timeline:

Purpose:
Speed and cost efficiency.

7. Role of IRP / RP in Fast Track CIRP

Appointment:

• IRP appointed at admission

• CoC may confirm or replace IRP as RP

Duties:

• Manage affairs of corporate debtor

• Collect and verify claims

• Constitute Committee of Creditors (CoC)

• Invite resolution plans

• Ensure compliance with compressed timelines

8. Committee of Creditors (CoC)

• Composed of financial creditors only (Section 21 applies)

• Voting share proportional to debt

• Operational creditors may attend meetings (without voting rights)

Commercial wisdom of CoC remains supreme, even in Fast Track CIRP.

Relevant Principle:
Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17

• Supreme Court affirmed that creditor-driven insolvency is the backbone of IBC.

9. Resolution Plan in Fast Track CIRP

Eligibility – Section 29A:
All disqualifications apply:

• Wilful defaulters

• Promoters of NPAs

• Persons convicted of specified offences

Key Case Law:
ArcelorMittal India Pvt. Ltd. v. Satish Kumar Gupta (2019) 2 SCC 1

• Section 29A applies strictly to all resolution processes, including fast track.

Requirements – Section 30(2):
Resolution plan must:

• Provide for insolvency costs

• Protect operational creditors

• Be legally compliant

• Be feasible and viable

10. Approval of Resolution Plan

• Resolution plan approved by CoC with 66% voting share

• Submitted to NCLT

• NCLT ensures compliance, not commercial merits

Landmark Case:
Committee of Creditors of Essar Steel v. Satish Kumar Gupta (2019) 16 SCC 479

• Courts cannot interfere with commercial wisdom of CoC

11. Failure of Fast Track CIRP (Section 58)

Fast Track CIRP fails if:

• No resolution plan is received within 90/135 days

• CoC rejects all plans

• Approved plan violates law

Consequences:

• Liquidation proceedings commence automatically under Section 33.

12. Fast Track CIRP vs Normal CIRP

13. Judicial Approach & Case Law

While Supreme Court has not laid down many separate rulings exclusively on Fast Track CIRP, its general IBC jurisprudence applies equally, including:

• Innoventive Industries Ltd. v. ICICI Bank (2018): Once default is proved, admission is mandatory

• Swiss Ribbons Case: Resolution preferred over liquidation; speed is fundamental to IBC

• Essar Steel Case: CoC’s commercial wisdom is non-justiciable

These principles are even more strictly enforced in Fast Track CIRP due to compressed timelines.

14. Practical Challenges in Fast Track CIRP

• Difficulty in completing process within 90 days

• Delays in claim verification

• Limited pool of resolution applicants

• Operational creditors often dominate debt structure

Courts have cautioned against misuse but support fast track objectives.

15. Important Practical Tips

• Eligibility must be clearly pleaded at filing stage

• Pre-packaged settlements improve success

• Promoters of MSMEs may benefit from relaxed Section 29A norms (Section 240A)

• Fast Track CIRP is ideal for early-stage insolvency, not deeply stressed companies

16. Conclusion

Fast Track CIRP under the IBC, 2016 is a specialised, expedited insolvency mechanism designed for small and emerging businesses. While procedural framework mirrors normal CIRP, its compressed timelines, limited scope, and emphasis on speed make it a powerful tool for early resolution.

Supreme Court jurisprudence consistently reinforces that time-bound resolution and creditor control are the heart of IBC—principles that apply with even greater force to Fast Track CIRP.